Why is option one bad for investors? If you have 100 million pre-ban users you can’t invest in and 20 million of them leaves because of the porn ban that still gives you 80 million users you can invest in.
It’s the same thing with requiring user accounts. Hosting a billion images for random people for free is less interesting from an investment perspective than hosting 200 million images for registered user that you can extract more data from and maybe even sell a premium subscription to.
Services that makes the internet convenient, accessible and anonymous are not necessarily a good capitalist investment. Stuff like somewhere you can upload images to is more like a public utility in nature than a capitalist business.
Yes, on paper that is how it should work. But look at what happened to Tumblr after they banned porn. Form a 1 billion dollar valuation to only being worth a few million.
Aren’t valuations of tech companies pure fairy tales in the first place? Did someone get actual real money or of doing it?
Yahoo got Tumblr for a real 1.1 billion US dollars, then Verizon bought Yahoo and sold Tumblr to the people that own WordPress for 3 million if I remember correctly. During that time Tumblr got removed from the apple app store and Google play store because of the prevalence of child porn on the website. The following attempts to ban explicit content on the platform ticked off the userbase as it would often incorrectly flag content. Apparently this caused Tumblr’s traffic to drop by a third.
