Reddit in the black

By Ian, on August 4th, 2006

The news aggregator site reddit has been profitable since April, according to Mass High Tech. I’m very pleased for them. The site takes the digg model a little further with recommendations based on your voting habits. It also seems to have a somewhat quieter, maybe older user base, which leads to a difference in the content that gets promoted. The main source of revenue for reddit has been in creating licensed versions of its engine for other companies. Slate, for example, has its own reddit for stories on the site. It’s an interesting business model which has kept the free site clear of intrusive ads and one that appears to be working for them.

I’m a fan of both digg and reddit, and it’s interesting to see the differences between what both crowds consider to be the day’s top stories. Such differences speak volumes about the wisdom of crowds, which both sites tout as their driving force. The answers found to problems (i.e. “what are the most interesting news stories today?”) depend considerably on who is in the crowd and the norms set for what makes an something interesting. Perhaps such a subjective issue is not really amenable to the approach except with groups that already have a general consensus about such matters. If that is the case, then perhaps the approach of Crispy News, which allows users to form their own news-voting communities, might offer an interesting alternative.

University of Virginia graduates Steve Huffman and Alexis Ohanian started the website in June 2005 with the help of the Y Combinator venture firm in Cambridge, followed by an unnamed angel investor who funded the site through August.
Ohanian said the [PC World] magazine’s approval will give his team added motivation. “It’s mind-blowing for us,” he said.
Reddit, which attracts 50,000 visitors a day, reached profitability in April, Ohanian said. The company doesn’t disclose revenue figures.
Y Combinator partner Paul Graham said Reddit’s users circumvent the traditional news model, choosing the most interesting news stories of the day. “It lets the wisdom of crowds do what editors used to do,” he said.

Reddit hits profit as its technology nets praise in market.