Reddit, known as the “front page of the internet," or, alternatively, a "giant black hole," has acquired its most popular third party mobile app. After receiving $50 million in funding, Reddit purchased Alien Blue to enhance its brand. For those who don't know, Reddit maintains a very strong following of roughly 175 million dedicated monthly users. However, it never developed a native iPhone application... until now. From a business standpoint, the main reason Reddit withheld from building a mobile app was because it lacked the required capital.
Reddit generates revenue by selling premium subscriptions, called “Reddit Gold,” to dedicated users. Uniquely, it can only be gifted to other Reddit fanatics. If this occurs, Reddit Gold members are granted access to features that are withheld from others; furthermore, you can't gift Reddit Gold to other people until you first receive the service. Reddit also generates revenues via online advertising, but most of its cash flow is generated by the solicitation, sale, and gifting of Reddit Gold subscriptions.
In order to stay relevant, Reddit must adapt to increased mobile usage. The shift from desktop to mobile surfing is more prevalent than ever before. More people now use their phones to receive updates and read breaking news; consumers demand simple mobile platforms with eloquent UIs, hence Reddit's acquisition of Alien Blue.
Reddit's engineers will undoubtedly revamp the Alien Blue app and subsequently release it on Apple's (AAPL) App Store. Reddit also retained Alien Blue’s lead developer to help enhance mobile app growth. Although a Reddit app release is long overdue, the company has finally addressed this issue.