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Reddit trousers $50m to splash on ads, mobile and cash-generating staffers

Oh and we'll toss community some 'crypto gold'

Reddit has announced that it has managed to raise $50m in funding, which it plans to use to hire more staff, improve its mobile offering and, of course, make its ads better.

The risqué blog also plans to give something back to the community of users, the ones who bring all the eyeballs to the site with their frequently outrageous antics and hilarious and sometimes downright disgusting discussions.

Reddit chief Yishan Wong said in a blog post to the community that the site wanted to give them 10 per cent of its hefty funding round, although it hasn’t worked out exactly how yet.

Wong said that investors led by Y Combinator president Sam Altman and including big names like Peter Thiel, Andreessen Horowitz and Sequoia Capital had agreed to give 10 per cent of their shares back to the community “in recognition of the central role the community plays in Reddit’s ongoing success”.

Most Redditors responded enthusiastically to the idea of getting a stake in the site and got down to some good-natured argument over how the 10 per cent would be apportioned, whether time as a member or “karma” – basically up-votes from the community – should be the standard for divvying up the loot.

But other users reckoned it was about time the site gave something back.

“This has been a contention of mine since the beginning of any social site. I'd argue that the contributors do a lot more than anchor the site... they are the site. Without them and the interaction of the users this site would be worth nothing. I feel like the users should have the opportunity to invest so they can receive some of the rewards from the success,” one said.

There’s still “a bunch of details” to figure out, according to Wong, but one plan is to create a new cryptocurrency backed by the Reddit shares and distribute that to the community. However, he stressed that the plan is still in the early stages.

“Nothing like this has ever been done before. Basically we have to nail down how to do each step correctly (it is technically, legally, and financially complex), though in our brief consultation with an ex-SEC lawyer, he stated he could find nothing illegal about this plan. Nevertheless, there are something like 30 different things we have to pull off to make this work, so we're going to try,” he said.

In the meantime, Reddit will be hard at work spending its new millions. The site plans to hire more staff for product development and community management and build better moderation and community tools. It also wants to expand its mobile offerings, improve its self-serve ad product and grow its redditgifts marketplace – in other words, figure out how to make money from its many users and bloggers.

Wong told concerned Redditors that he’d intentionally chosen investors with long time-frames in mind to ensure that the site doesn’t rush into ways to make cash, however.

“That said, it's always been our intention to build Reddit into something great, and that includes growing it and making it economically self-sustaining - you can't just burn money forever,” he said.

“Even today, we are unprofitable but not without revenues. But everyone understands that we have to pay to run this place and I think that's a healthy thing to do. Having worked at Facebook and experienced large-scale consumer internet companies from the inside, I've found that Redditors are in fact more pragmatic (than your average internet user) about the idea that you can't get something for free forever, and often support our revenue-generation efforts.” ®

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