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Comment by aston | Hacker News Reader

Deep within the 1000+ comments on the accompanying reddit thread is a really interesting fact: Reddit is not (currently) profitable. [1]

I was already a reddit gold subscriber, but the fact that at the moment they're literally running into the red to provide cool stuff like the Obama AMA makes me want to subscribe again. Anyone looking for a reddit gold account?

[1] http://www.reddit.com/r/blog/comments/12v8y3/now_is_the_time...

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Reddit is a fantastic product— and its huge, growing popularity is a sure sign of that. But it never was built with a clear business model in mind. Their two sources of revenues are (i) ads and (ii) reddit gold.

I don't think anyone ever expected (i) to be more than just a little extra cash; and (ii), as they say, was never heavily promoted at all. So it seems like (part of) their solution today is to try to push (ii) as far as it will go. I don't believe it's going to get them very far in its current state, but it's a valid first step.

I think this highlights, once again, the need to actually build a viable business in addition to a quality product- one does not make the other, and it's hard to retrofit a business model 5 years later. Sadly, everyone expects everything digital to be free (software, social networks, services, magazines, games, etc.), so it's an uphill battle. I think Reddit has some interesting cards in its hand though: AMAs are a growing trend, so that's something I'd try to monetize if I were them.

Regardless, I'm curious to see where Reddit will go.

Reddit probably has the same issue Groupon brought to local business. It's userbase expects a high quality product for dirt cheap, and is very vocal when something goes awry. When Woody Harrelson showed up to do an AMA, that turned out to be more of an "Ask Me About My New Movie", there was backlash. A lot of people just went around repeating a comment about Woody taking some poor girls virginity from a local high school prom and then never calling her back(not sure if this was true). So the idea of leveraging pseudo-AMAs for marketing purposes seems like swinging a broom at a hornets nest.

    So the idea of leveraging pseudo-AMAs for marketing 
    purposes seems like swinging a broom at a hornets nest.

There are many AMAs that exist solely as the internet equivalent of a talk show where a celebrity makes an appearance to promote their latest book or tv series. The problem with the Woody Harrelson AMA was expectations, it was billed as "Ask Woody Harrelson Anything" and then when it came down to it the reality was it was actually "Ask Woody Harrelson anything about Rampart!"

If you set expectations accurately and provide real value then there will be no outrage, there was an AMA a few weeks ago from an ex death row inmate who did the AMA to promote his book, did anyone complain? No, because he was open about it and spent time answering all the questions regardless of their value to his promotional intentions.

Just like if a celebrity went on to Conan O'brien and answered every question with "Okay! So about my new film! It's really great, everyone should go and watch it!" people would be pissed.

Here's a couple of AMAs that I just picked in <1 minute that are promotional but had no complaints:

http://www.reddit.com/r/IAmA/comments/12vg2c/i_am_lizzy_capl...

http://www.reddit.com/r/IAmA/comments/12uwz7/we_are_videogam...

http://www.reddit.com/r/IAmA/comments/n9tef/hi_im_louis_ck_a...

http://www.reddit.com/r/IAmA/comments/kefnc/i_am_bear_grylls...

Cult TV show actress, indie video game developers and cult comic and adventure show host who are memes on Reddit. Reddit fancies these people, and the fact that they didn't pay to post makes it seem more legit. While they may be marketing something, the fact that it's not in your face makes it seem more innocent. Having something on there that specifically states "this is a sponsored AMA, someone is doing this to sell you something" immediately creates a negative reaction. Hiding the sponsorship would just cause paranoia.

Would sponsored AMAs be front paged immediately? Could they be downvoted to hell? Would comments that the sponsor found offensive be removed? Would a company want someone linking to r/SpaceDicks in their AMA? It's kind of a Pandora's box promoting on Reddit.

http://www.reddit.com/r/IAmA/comments/122zcw/we_are_the_edit...

Does this example work? Top comment, "Let's cut the shit: Buy our new book."

Does anyone know what Reddit's AWS monthly bill is these days? I suspect they would be closer to profitability if they ran their own hardware, but I haven't seen any numbers recently.

Don't forget that if they were to run their own hardware, they'd probably need a couple of sysadmins to manage it. The question is if running their own hardware would be cheaper by more than the salary of a couple employees.

In previous talks they have never revealed the numbers, but have said that their bills have been fairly constant over time - Amazon's price decreases have balanced growth in AWS usage.

Sure we did. Jedberg used to talk about it all the time.

Closest I have found is this (two years old): http://www.reddit.com/r/blog/comments/ctz7c/your_gold_dollar...

Well, try updating it for the present.

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