

Reddit becomes reddit Inc. - markgx
http://blog.reddit.com/2011/09/independence.html

======
joshklein
The question for reddit isn't whether or not people enjoy it and want to spend
time on it, but whether or not the owners can make money selling those
people's attention. The traffic to reddit - while admirably large - is
relatively unattractive to most advertisers.

"Reach" (impressions/eyeballs) are only important insofar as you're talking to
someone who might buy what you're selling (see "relevancy"). The sub-reddit
system could theoretically segment the audience in interesting ways, but other
than r/gaming, there aren't many natural industry fits amongst popular sub-
reddits.

Anecdotally, the audience would also seem to be advertisement-averse. An
advertiser should be willing to pay network prices for the audience (i.e.
pennies CPM), which makes it a nice living for a small group of folks living
off their passion, but pretty useless to a Condé Nast trying to run a media
empire.

I think the business model in a reddit-like site could be selling curated
content in other media, e.g. a meme-series of coffee table books. Think Harry
Potter, not Oprah.

If you're in the content game, your business's value is in having the
attention of a group of people. Your first attempt to monetize that asset
needn't be to sell your audience's attention to someone else, in this case
undermining your ability to keep their attention. Instead, you should focus on
bringing things your audience wants - and would pay for - to them. Sometimes
that means you need to make the things they want to buy instead of shilling
them for someone else, because no one sells what your people want.

Condé Nast isn't built to do this.

~~~
weinzierl
"The sub-reddit system could theoretically segment the audience in interesting
ways, but other than r/gaming, there aren't many natural industry fits amongst
popular sub-reddits." In my opinion this is only true for a few (admittedly
most popular) subreddits like r/funny and r/wtf and everything nsfw . Nearly
every subreddit that I read has an industry that fits, r/photography -> photo
gear, r/parenting -> baby stuff, r/science -> journals and books,
r/somethingimade -> etsy, etc. I'm also sure that reddit knows a lot more
about my interests than google and facebook together. But maybe that's just
me...

~~~
joshklein
You're not wrong by any means, but it's also a question of scale and
purchasing power. There's no doubt that r/parenting is filled with people
worth talking to about, say, baby products. But then look at the advertising
sales minisite for Babycenter.com[1]; a company like Johnson & Johnson isn't
going to bother with r/parenting. Smaller companies might be interested, but
small companies don't spend much money on ads. When they do, they mostly spend
it on Adwords.

Of course the joke here is that J&J bought Babycenter. If I were a category-
specific CPG company, I'd cut out the publisher middleman, too.

Ad networks & exchanges lead us to think there's a perfectly efficient &
liquid market for ad space, but there's a real scaling problem for big
advertisers that leads them to stick with big publishers. Quality control on
r/parenting would be a concern.

[1] <http://www.babycentersolutions.com/>

~~~
BrandonM
_> a company like Johnson & Johnson isn't going to bother with r/parenting_

This is false. My girlfriend works in social media at a Fortune 100 company.
Just a few of their many products are geared toward babies and other things of
interest to parents. She attends "mommy blogger" conferences, reaches out to
people on Twitter and Facebook, and otherwise works with people who have a
substantial audience in order to advertise with them.

Big companies are _much_ more likely than small companies to even have such a
role. They are very interested in promoting themselves and increasing their
profits in any way possible. There's absolutely no reason they wouldn't be
interested in something like r/parenting

~~~
jonknee
> This is false. My girlfriend works in social media at a Fortune 100 company.
> Just a few of their many products are geared toward babies and other things
> of interest to parents. She attends "mommy blogger" conferences, reaches out
> to people on Twitter and Facebook, and otherwise works with people who have
> a substantial audience in order to advertise with them.

By bother he meant spend a bunch of cash, not @reply to people on Twitter.
They can hire your girlfriend to submit stuff and comment on reddit all day,
but that doesn't give reddit any revenue.

~~~
rat
Paying someone to reply to people on twitter cost 20000 + benefits per person.
Not to mention conference tickets, transportation to conferences. Maybe some
facebook ads?

~~~
jonknee
It could be cheaper, but I'd never see a Facebook ad or Promoted Tweet.
Sometimes the warm body making personal contact is what it takes.

------
emmett
Sad to see them hiring an outside CEO instead of promoting from within. I
don't think hired CEOs work so well for products that are still at the stage
Reddit is at.

They need someone with deep, intimate knowledge of the community and the
product. The best source for that in my opinion would be internal.

~~~
jedberg
I believe they only have one person from within still there that could do it.

~~~
emmett
Do they need more than one CEO?

Sounds like you should have said "they still have someone within who could do
it!"

~~~
jedberg
I guess I was trying to make a snarky comment about the fact that most of us
who would be reasonable choices left before it became an option.

~~~
lhnz
Was it really that bad? (Or am I just reading the tone of your comment
incorrectly?)

------
thurn
Can someone with more business know-how tell me how a company like Condé Nast
benefits from making Reddit an incorporated subsidiary? It doesn't sound like
all that much is changing, honestly.

~~~
dkokelley
Instead of Reddit being a division on the Org. chart of C.N., Reddit Inc.
shares are held by C.N. This means that Reddit can take on equity investors to
finance operations and operate externally of any organizational influence
Conde Nast had (which may not have been much anyways).

~~~
guan
Reddit, Inc., will be owned by Advance Publications, which also owns Condé
Nast, so it will be a corporate sibling of CN and more independent of it.
Advance Publications owns other divisions in addition to CN, including a
newspaper division that presumably does not is not influenced very much by the
magazine folks:

<http://en.wikipedia.org/wiki/Advance_Publications>

------
fecklessyouth
Reddit could become an email replacement. My college campus has all-campus
email that anyone can send to. Discussions in email simply don't turn out
well, there's no good way to respond to just one person while letting everyone
view it, there's no good way to voice agreement or disagreement, and it's
mixed in with much more important information.

Reddit would be perfect for it, and for campuses with less generous email
policies. It doesn't interfere with work communication and its better suited
for the sort of discussions and arguments that email often plays host to.

As a student, I can't speak much for companies. And I'm aware of Reddit's
recent College promotion and how easy it is to make, moderate, etc a new
Reddit. But a dedicated Reddit integrated with college websites or email could
be a profit stream.

------
dotBen
_This change is all about setting up reddit so that it can better handle
future growth and opportunities._

FTFY: This change is all about setting up reddit so that it can be be sold.

~~~
argus
My thoughts exactly... Reddit is a misfit in the overall organization and with
the current exponential growth it's experiencing, it's the best and most
leveraged time to sell it off. Would be a strategically good decision IMO..
I'm surprised this comment isn't voted higher..

------
twidlit
Here are a bunch of monetization ideas that wont divert too much from their
culture:

1\. paid mobile apps 2\. paid API access 3\. build an internal Flattr like
service 4\. offline events 5\. go compete with Disqus

~~~
epicviking
I can't even begin to imagine what Reddit would be like if Karma had a
monetary value. Karma whore-ier I'd presume.

------
krashidov
I've mentioned this before in a different comment:
<http://news.ycombinator.com/item?id=2948396>

I would like to see reddit release a product where I, can implement a forum
system much like reddit but completely autonomous and hosted on their own
service - basically a replacement to the dreaded phpBB. Hell, I'd pay for it.

~~~
mason55
The reddit code is open source

~~~
scottmcf
That's true, however it's not really in a highly usable state. I believe it's
one of their aims (although, that's been the case for a while) to remedy that
situation, but you'd have a tough time using it in this way at the moment.

------
nohat
Sounds like they may be making it more attractive as an aquisition target.

~~~
citadrianne
You underestimate the ability of a large media company to squash innovation
and morale. They might get outside investment so they can iterate
harder/better/faster but Advance wants to hold onto this goldmine.

From [http://www.betabeat.com/2011/09/06/a-startup-is-reborn-
reddi...](http://www.betabeat.com/2011/09/06/a-startup-is-reborn-reddit-no-
longer-part-of-conde-nast-seeks-ceo/):

Greater independence will mean reddit can go to a new board, which includes
reddit OG Alexix Ohanian, who had been serving as an “advisor,” as well as
representatives from Conde and Advance, with proposals instead of jockeying
within Conde’s budget. Reddit doesn’t plan to seek outside funding at this
time, Mr. Martin said, but it’s not out of the question. “It’s a lot more more
of a startup,” he said. “It’s able to happen faster with less overhead.”

~~~
nohat
Hmm, in that case they seem to be making a reasonable move: remove to some
extent the overhead of Conde Nast. If that's the primary motivation, then I am
impressed that Conde Nast can recognize it's limitations, and give reddit a
chance to grow outside of their oversight. That being said, my impression was
that Conde Nast was remarkably hands off.

------
barredo
So. Who will end up buying this new reddit with high traffic and lots of user
affection?

How much? I'd say 50M$ would be adequate.

~~~
jkaljundi
Would be really amazed if Reddit would sell so low, considering their fast-
growing visitor numbers. <http://blog.reddit.com/2011/09/how-reddit-
works.html>

~~~
klbarry
However, Reddit users are notoriously cheap and anti-commercial.

~~~
pygy_
As the user base grows there is a growing amount of thinly disguised
commercial content that sneaks in, often through strategic product placement
in pictures.

Since the community is less vigilant than it used to, I assume that the
newcomers are less concerned about commerce.

~~~
sunchild
It doesn't take much to send a fickle user base like Reddit's running for the
next Internet hangout. There are plenty of examples from the recent past.
Remember Digg?

------
garydevenay
I have to say, although Reddit is a large and possibly even influential
service. I can't agree that they will be able to influence the news industry
greatly (I use greatly loosely as the industry is so large).

I think an online service could revolutionise the way we all read and digest
news, Reddit is the first stepping stone in this revolution but I expect it to
be overtaken soon by a superior service (The same way Facebook has MySpace).

------
cowkingdeluxe
Seems like what happened to digg. Didn't Digg balloon to 75+ employees at one
point? I wonder if Reddit is going to head down that same route.

~~~
kn0thing
As long as I'm on the board, I'll do everything I can to stop any nonsense
like that.

~~~
staunch
My first thought when they said you were on the board was "Well at least we'll
have an honest witness to the train wreck that's likely to ensue."

I really hope they actually listen to you. Would you consider taking the CEO
job there? Best possible outcome.

~~~
raldi
Conde Nast buys reddit, and people predict a train wreck. Conde Nast spins
reddit off, and people predict a train wreck.

There's just no pleasing you guys...

~~~
staunch
For years the cat was bored with the mouse so it just kept it caged up and
starving. But the mouse got fat and juicy anyway. Now the cat is licking its
lips.

------
ck2
3M pageviews per hour? Whoa, that's staggering.

------
pointyhat
Perhaps it's dying and they are trying to cut it loose first.

~~~
gigantor
They're currently experiencing explosive growth: [http://soshable.com/reddit-
traffic-has-exploded-in-12-months...](http://soshable.com/reddit-traffic-has-
exploded-in-12-months/)

They have also, in my opinion, implemented mainstream and niche news so well
(via subreddits) that they're not in immediate danger of being replaced by
another aggregate news and/or niche site.

~~~
evan_
>They're currently experiencing explosive growth

so was Digg, and Fark before it, and Slashdot before that.

Am I wrong? History shows that these sites are basically popular for a certain
amount of time, and then they lose huge market share when they inevitably do
something to sour the community-at-large (like trying to monetize).

~~~
emmett
The thing is, Reddit started at the same time Digg did. It's been growing
slowly and consistently ever since. Their growth rate actually hasn't changed
much over time.

Reddit figured out how to support subcommunities in a way that those other
sites never did. In my opinion that's what's different.

See also: social networks. Every social network was a passing fad...until
Facebook wasn't.

~~~
evan_
Is it growing slowly and consistently, or experiencing explosive growth? The
link I was replying to shows that while Reddit and Digg started at about the
same time, Reddit really only took off when Digg committed suicide.

[http://soshable.com/reddit-traffic-has-exploded-
in-12-months...](http://soshable.com/reddit-traffic-has-exploded-
in-12-months/)

~~~
SwellJoe
Correlation is not necessarily causation.

------
IAnsari
Reddit is cool. Get a CEO who is cool.

