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Is Reddit on the Rise?

2011-02-09 13:04:06

Jolie O'Dell Jolie O'dell Tue Feb 8, 3:31 pm ET

Reddit has announced some small but significant staffing changes today, causing

us to ponder the big picture for the little link-sharing app that could.

As longtime rival Digg takes a Titanic-like nosedive into the freezing waters

of the Internet, hemorrhaging staff along the way, Reddit claims things are

going swimmingly.

Today, the small team, which was acquired by publishing behemoth Cond Nast in

2006, has just announced a couple new hires and says it will be hiring more

engineers shortly. The company will now include a new back-end engineer and a

new sales rep, as well as a couple redditors who will be working as part-time

support staff.

But you may recall things were not so rosy for Reddit in the quite recent past.

Just six months ago, the site was forced to adopt a freemium model to keep

itself in business. At the time, Reddit staffer Mike Schiraldi wrote,

"Whenever this topic comes up on the site, someone always posts a comment about

how Reddit is owned by Cond Nast, a billion-dollar corporation... and how if

they wanted to they could hire a thousand engineers and purchase a million

dollars worth of heavy iron. 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."

Clearly, times have changed since those words were penned last year. For one

thing, the freemium features, dubbed Reddit Gold, were considered a huge

success by the company.

Also, since then, the site has grown to more than one billion pageviews per

month. That figure represented a 300% year-over-year increase.

This kind of traffic growth has helped the site lure "big-ticket" advertisers,

according to site admins; another rising source of revenue is the site's

sponsored link system, which is used to promote SMBs, startups, blog posts,

YouTube videos and other kinds of content. And Reddit Gold continues to be a

success, too.

It's interesting to watch this company -- which without doubt was smaller than

Digg as far as staff was concerned and which never drove the same masses of

lemming-like traffic to publisher sites the way Digg did -- succeed even as

Digg falters. Perhaps this is a real-life example of a slower, steadier web app

winning the race.