Scrappy Reddit is doubling sales and engineering staff to keep up with traffic gains. But don't thank the social news site's parent company: Condé Nast starved Reddit of money, so the site paid for expansion using member contributions.
Reddit roughly tripled its unique visitors last year, according to Google Analytics, despite being a four-person operation lodged in an orphan corner of the Condé magazine empire. Reddit's organic community was well positioned to exploit a botched redesign at rival Digg. To handle the growth, Reddit has doubled its sales and engineering staff — to all of two people per division.
In a blog post and an interview with VentureBeat, Reddit admins say they drew funds from "Reddit Gold" user memberships, user donations, and self-serve text ads, many of which were bought by users in order to support the site. And what about Condé Nast, which has been plowing untold sums into an array of flashy iPad editions? Its contribution is keeping its hands off the money. As Reddit's Mike Schiraldi put it to VentureBeat, "All Reddit [user] revenue goes right back into the site... Condé Nast does not seize it to buy Picassos for the executive washroom." So nice of them.