A Lot More People Are Using Reddit, And It Needs More MoneyBy: Chris Crum - November 8, 2012
Reddit announced in a blog post today that it reached 3.8 billion pageviews and 46 million unique visitors in October. The site continues to see tremendous growth. In August, it was at 3.4 billion pageviews and 42.9 million unique visitors.
As reddit grows, however, it also needs money to sustain that growth. CEO Yishan Wong is giving users a choice: they can start seeing more ads, or more people can become reddit gold members (or in other words, become a subscribing member).
“Our server costs also continue to grow, so we have a choice to make,” says Wong. “We can start running a bunch more ads, or we can give you, the community, more reasons to support the site with your own money through reddit gold. Advertising will probably always be a part of our revenue, but we want to be ultimately beholden to you, the users.”
“Reddit gold was started a couple years ago to great initial success,” writes Wong. “While many people have continued to purchase gold, gift reddit gold to each other, or send in postcards, we’ve never really promoted the program, so a lot of active redditors don’t even know about it. Today we want to announce a recommitment to reddit gold, a program we’d like to expand and promote.”
They’re launching comment saving and filtering saves by subreddit, and the ability to give gold to other people’s comments (which they’re calling “gliding”). Also listed are “some upgrades and fun stuff in the members-only lounge that may or may not exist” and possibly “a remote-controlled office robot you can drive. Under construction.”
Wong says reddit will eventually migrate the features to the whole community, if they’re determined to be beneficial to the whole community.
Wong talked about the situation more in a reddit post, saying, “Actually, reddit is NOT one of the most profitable sites on the web at all. In fact, we are not profitable. This is because increased traffic results in more server usage, which primarily increases costs, not revenue. In theory advertising revenue should/could scale with traffic, but since we never tried very hard to sell our advertising inventory, we only run ads on a relatively small percentage of our pages and they do not cover our costs. When Obama comes to ‘chill on the weekends,’ that increases costs, not revenue.”
Reddit is also talking to some “reddit-friendly” companies about possible perks or access to stuff for gold members. We should learn more about what these might include in the future.