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Monday, July 12, 2010

Reddit Employs Novel Financial Strategy: Begging

Posted By on Mon, Jul 12, 2010 at 2:59 PM

click to enlarge 'But you have 280 million monthly pageviews, my good man!'
  • 'But you have 280 million monthly pageviews, my good man!'
Heavy traffic, a lean staff -- easier to achieve when you don't employ your own reporters -- and a comfortable spot under the aegis of a corporate publishing titan. If this sounds like a recipe for Internet media success, think again: the San Francisco-based online news aggregation site Reddit has been reduced to begging for money.

As in, like, really begging. Check out this blog

post from Reddit's Mike Schiraldi, who acknowledges that "reddit's

revenue isn't great," and that "The bottom line is, we need more

resources." The post announces the rollout of a new subscription

service that will allow readers to open their wallets to Reddit's four

overworked engineers.

The strange thing about this, as Gawker notes, is that Reddit has an audience that most media sites would envy. The site -- which compiles news from other sources across the Web, and allows readers to vote on how prominently they should be displayed -- currently boasts 280 million pageviews per month. (For comparison's sake: Village Voice Media, the parent company of SF Weekly, had 68 million pageviews across all of its papers' websites in June. Gawker clocks in at about 41 million monthly pageviews.)

What's more, Reddit was acquired several years ago by publishing giant Condé Nast. So what gives? In his blog post, Schiraldi asserts that Reddit is walled off from Condé Nast's coffers as a result of the company's corporate structure, and simply can't make it on its own.

"Whenever this topic comes up on the site, someone always posts a comment about how reddit is owned by Conde Nast, a billion-dollar corporation like Time Warner or Cobra, and how if they wanted to they could hire a thousand engineers and purchase a million dollars worth of heavy iron," Schiraldi writes. "But here's the thing: corporations aren't run like charities. They keep separate budgets for each business line, and usually allocate resources proportionate to revenue. And reddit's revenue isn't great."

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Peter Jamison

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