1) Shut Apollo down: increase ad revenues, decrease server costs (if the claim that Apollo is inefficient is true)
2) Apollo pays $20M: increase api revenues
3) Pay Apollo $10M: decreased revenue, maintain high server costs.
I don't even understand how this kind of deal would make any sense to propose.
Christian is clearly thinking on his feet, so obviously he doesn't have a value proposition for reddit. All he is really doing is letting reddit know he might be open to it, the details could be negotiated later.
Reddit clearly has all the power here (Apollo is fully dependant on reddit), so they would have been able to negotiate it down. Maybe all the way to $1 million?
Anyway, reddit clearly weren't open to it, so it fell flat on it's face.
That means, if you pay 1 million now, it would be less than the cost to upkeep for 30 days and it would we a win win
2) Yes, this is better for reddit but untenable for Apollo.
3) If you buy the app that makes your site SING, that everyone loves, then you keep all those users, and make money from them instead of losing them.
Also, don't forget that everything before an IPO is magnified. This has cost reddit perhaps hundreds of millions now in bad press and lowered valuation.