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Comment by chrisblackwell | Hacker News Reader

So a not yet profitable site is going to start giving away revenue. Very happy I'm not an investor in that company.

Let me rephrase that "So a not yet profitable site is going to spend 10% of a new form of marketing. Very not happy I'm not an investor in that company" :)

You make some good points, and I wish to subscribe to your newsletter.

>"... spend 10% of a new form of marketing..."

Exactly.

Seems a big part of the Reddit appeal is the love for feeling a part of the collective.

All at once this reinforces that sense, lends a suggestion of passive nobility to using the site and pre-emptively defends an increase in advertising.

I expect they'll also see some jump in guilt tripping by the community around adblocking as well.

That's a heck of a strawman.

There are already ads on reddit that say "Thanks for not using adblock." Though they may get more blatant as time passes.

I'm thinking more among the community than from Reddit directly. You already see a fair bit of that kind of peer pressure in some circles [0][1].

0: http://www.reddit.com/r/CoDCompetitive/comments/1ssvjm/if_yo...

1: http://www.reddit.com/r/nerdcubed/comments/1w2h95/adblock_di...

Making them any more blatant isn't going to do much good, seeing as those who block ads won't be able to see them.

I'm certain the non-profits who receive the money don't care about what it "seems" to anyone.

>Very not happy I'm not an investor in that company

So you want to be an investor now?

In theory, if they can get enough people to stop blocking reddit ads, it might actually increase ad revenues. I guess we'll see if that actually works.

Sounds like a rock solid business plan. If they could only persuade people...

IMHO, the type of person who installs adblock isn't the type of person you can sell things to easily. They're decidedly anti-mainstream, anti-corporate, probably not particularly rich, etc.

So it's not just a matter of convincing their userbase to stop blocking ads, you'd need to tell their current userbase to go away, and invite a better userbase to come and click on ads.

Reddit created this problem by fostering a culture of anti advertising early on.

Reddit should probably just become some non-profit foundation like wikipedia and show begging adverts.

> IMHO, the type of person who installs adblock isn't the type of person you can sell things to easily. They're decidedly anti-mainstream, anti-corporate, probably not particularly rich, etc.

    [citation needed]

Could just be that the people installing AdBlock don't like being distracted by multitudes of flashing popover and automatically playing videos. I doubt it's anything to do with being anti-mainstream or anti-corporate.

They should focus their efforts on redditgifts (http://redditgifts.com/) and consider putting it on the main site instead of on a separate domain. Their users may not like to buy mainstream products but they definitely like to buy quirky, off-the-wall things as evidenced by `Shut Up And Take My Money`'s success with advertising on Reddit. They've already got the right idea with the marketplace model. They should (if they're not already) focus on trying to attract unique products through a program similar to Steam's Greenlight and stop focusing so much on advertising. Advertising and Redditors -- generally speaking -- are not a good match.

How on earth do you conclude that people who install adblock aren't rich? There is literally no sense behind that babble.

Advertising shows you things you might want to buy. It's useful. if you have money to buy such things.

Who wouldn't want to see adverts for cool gadgets, toys, houses, suits, holidays, etc?

Reddit could offer Reddit platinum which would give users a simple user page / blog.

I'm rich[1], and I have Adblock.

[1] Depending on your definition of rich.

While you are responding to a poorly-defended stereotype/generalization, I actually think your anecdote is worse: the userbase of this website is, on the whole, going to be almost entirely "rich"; even if 99% of Adblock users are "poor", if you thereby polled Adblock users here you would not be able to discover this phenomenon due to the pre-selection.

Reminder: "profit" is left over money. Profit means you've paid all your expenses (including people's salaries), and you still have money left over.

You can be not-profitable forever and still have a working company.

In fact, some organizations are even specifically set up to be "not profitable."

Not-for profit companies have profit, they just redistribute the profits at the end. Any company that never has profit is doomed to fail.

By definition, not-for-profit companies don't make a profit. If your company's expenses are always as high as its revenues, then the company can survive forever. So I don't see what your point is.

A lot of them pay supra-market salaries to certain employees with ties to the handpicked, perpetual, unaccountable board.

Although nominally non-profits such corporations are fairly indistinguishable from partnerships.

At least in the US, non-profits may make a profit, it's just that they can't have owners who receive the profits (or managers/insiders who receive undue compensation). Any profits must remain within the organization and dedicated to its mission.

(Although "non-profit" is the common name, in this sense it's better to think of it as shorthand for "not for profit", meaning that achieving financial profits for its owners/insiders is not its legal purpose.)

Same in France, non-profits are allowed to make profit but you can’t plan it (you’re supposed to plan that you’ll spend as much money as you receive but it doesn’t always happen) and you can’t give it to your people. (source: I run a non-profit)

You mean reinvest. If they distributed the profits, they'd be for profit.

How does YC make any money on non-profits they invest in then?

We don't. The money we put into non-profits is a donation and there's no financial return.

http://ycombinator.com/np.html

State-run utilities? Public transportation?

They might be onto something. I guess many users consider Reddit a trustworthy and ethical company.

Such a move only strengthens this image. This in turn makes their users very faithful (as long as they manage to live up their image) If they manage to (directly or indirectly) sell a no-bullshit product/service that appeals to their users then they are going to be a very successful company. (What's more, trust is a "resource" potential competitors can not easily imitate)

Sure, they haven't really found anything yet but building up trust will capitalize if the right product/service is found.

If there really exists is no such product then our whole society would have quite some serious flaws ...

It's only for the ad revenue. I'm guessing this is a small part of their revenue compared to reddit gold.

Is reddit gold all that much? I could imagine a surge when it came out, but how about ongoing?

http://www.reddit.com/gilded

You can see "gilded" comments in real time. Gilded is when one user gives a month of reddit gold to another user (it doesn't include people buying it for themselves).

I'd say it's most definitely a success.

They have a "gold goal" progress meter at the bottom of the homepage sidebar. I assume this is approximately "amount of gold purchases needed to keep us from losing money today" -- it's usually above 80%; yesterday it was 107%.

About $50k a month.

http://gold.reddit-stream.com

So about 2% of their hosting bill...

That page says, "These numbers only include gifted gold"

Obviously, if it were profitable then revenues would have to be substantial - above total operating costs. Any percentage of that would be a massive expenditure.

Whereas if it is not yet profitable, then revenue could be tiny - i.e. you might be 'vetoing' (with your comment) a $50 expenditure that serves to generate huge amounts of free advertising and goodwill for Reddit.

Frankly with this level of analysis, it would surprise me greatly to learn that you have any money remaining to invest.

Probably not ideal given it's financial situation, but the userbase may respond positively, and that could have a proportionate benefit that outweighs the negative.

If Reddit ever became profitable, I think their userbase would revolt. The average Redditor is pretty anti-corporate, anti-rich, anti-profit, etc etc.

It's more in line with wikipedia.

That's apparently what reddit thinks, but they are wrong.

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