Nextdoor wants to offer more positive content but is also trying to figure out how to increase profits:

“We actually have data that shows that in the short run, toxic content absolutely drives more engagement,” Nextdoor Chief Executive Officer Sarah Friar said in a recent interview. “But over a six month period, it drives down overall engagement.”

It explains why the company chose the ticker KIND when it went public on the New York Stock Exchange last year. Nextdoor wants to distinguish itself from social media peers like Twitter Inc. and Meta Platforms Inc.’s Facebook as a friendly, down-to-earth platform that fosters connections between real neighbors, not anonymous trolls and scammy bots. There’s also local utility: Users can find a couch to buy, a plumber to fix a leak or a barbecue to attend…

The strategy has not translated into profitability for Nextdoor, which reported a loss in 2021 on revenue of $192.2 million, almost all of it from advertising. Friar says the company is in “investment mode” with plans to expand abroad in the UK, Germany, France, Canada, Denmark and Australia. It’s ramping up marketing and trying to figure out a way to capture more small businesses beyond the 30,000 that currently advertise on the platform. The company is focused on the hyperlocal, but large national advertisers are still how it makes most of its money.

But Nextdoor is competing for those accounts with advertising behemoths, and its users are still older and whiter than other social media networks, according to a survey by the Pew Research Center. Its $51 million in first quarter revenue is a 48% year-over-year jump, but a blip compared to advertising giants like Meta and Twitter, which posted revenues of $27.9 billion and $1.2 billion, respectively. Frontdoor Inc., a platform for home services and repairs, and Yelp Inc., both eclipsed $250 million for the quarter. Unlike Nextdoor, all of them have been profitable. 

This description of the platform raises multiple questions. Here are a few in my mind:

1. Is profitability in the social media space now inextricably tied to anger and provocative content?
2. Platforms offer different affordances, features for users and groups to utilize. How much can these features specific to different platforms tame negative content and behavior or is this a problem endemic to social media or society at large?
3. Can a social media platform be more of a public service than a profitable private company?
4. Once a social media platform has an established base – other parts of the article discuss Nextdoor’s appeal to suburbanites interested in crime and safety – can it actually change audiences and purposes?
5. What happens if Nextdoor is acquired by another tech or media company?

As a Nextdoor member, I will keep my eye on this.