Latest From Blogigs - Reddit Not Making Enough Money

Posted: 11 Jul 2010 10:01 PM PDT

PC Mag carried an article titled, Conde Nast’s Reddit Asks Users for Donations to Fix Site which relates to an article in Reddit Blog where Mike, one of the four full time engineers maintaining Reddit asked for cash donations from Redditters as the site is hard need for cash and working capital.

The article from PC Mag got Dugged to the front page of the Tech news section with a quite mischievous submission title of Reddit Is Going Bankrupt which in turn had loyal Reddit user saying that Digg Is Pathetic.

All this is very entertaining to read, but the fact remains that Reddit, despite it’s claim of 280 million page views per month, failed to make enough to be self sustaining and had to resort to asking for public donations for survival. Putting aside the fact that it is owned by Conde Nast, a billion-dollar corporation like Time Warner or Cobra, one would naturally expect a site with that kind of traffic should be making millions each year, contributing effectively to the overall earnings of Conde Nast who also by the way, own Vogue, Glamour, Vanity Fair, The New Yorker and a string of other big names.

Is Reddit Not Well Monetized?

By all means, when it comes to monetizing a site, I am no expert, but the strange thing is even for a dumbass like me, each time I visit Reddit, I feel strangely ‘light and easy’. There are no Advertisements flashing into my face and I do not feel suffocated. It is a nice feeling, yet strange, as I had always asked myself, where do Reddit find the money to pay their staffs and keep the site going. Being a dumbass, I do not dwell on this for I assume that they must be doing very well, thus there is no need for excess selling of Advertisement space.

It’s only now that I realize they are not doing so well after all. As far as I know, Reddit does offer some kind of paid links of some sort. I have never bothered to find out, but obviously those methods are not working and bringing in the much needed revenue.

Survival Is More Important Than Ethics And Pride

When it comes to survival, I believe one must bite the dust if you have to. Those who clings to the believe that high morals and ethics will fill their tummies will eventually starve. No doubt a site without any obtrusive advertisements is a pleasure to visit, I don’t think many would mind if there are. I do not see Techcrunch losing many visitors and I certainly believe that this is much better than begging for donations from your readers or users, as in Reddit’s case.

A well meaning commenter who made a conservative estimate based on Reddit’s 280 million monthly page views showed that they have the potential to make at least $280,000 per month if they are willing to open up their sidebars for Advertisements. That is based on a very low CPM and not the actual market value. Would that not be enough to pay for some extra expenses?

I am also quite sure that if expert help is sought, there will be many other venues to make money for a site that is so huge and popular.

Maybe they have some reasons for not doing so. I am not qualified to make any wild guesses or offer some smart ass suggestions. Hopefully it is not just to please some users who has threatened to quit using Reddit if they see Advertisements. In my opinion, that would be rather silly.

The comments received in that posting showed that the majority are not willing to donate anything. Reason being, Reddit is owned by a giant corporation and they should be the ones taking care of this issue. Some says Reddit is already benefiting from all the free contents it is getting through all those submissions so don’t expect them to help further. Some just made a plain joke out of all this asking for donations thing.

That is the way things are in the Web. When you offer something or some services for free, they take it for granted that it is their right to make use of that service. In the long term, you owe it to them to let them have everything for free. The day you make a announcement that they will have to pay for those services will be the day they start condemning you to kingdom come with all kinds of wild accusations

Frankly however, I too think is is kind of sick, asking for donations to keep alive a site. Unless it is for some charitable cause or if lives are at stake, I do not think it is right to ask for donations to boost up your kitty and consider that as a form of blog monetization. Monetize how you want and all you want. That is your right as the site belongs to you. Asking for donations is playing with the sympathy of people and taking the easy way out.

I think that’s not right.

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