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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.