Many of the people who frequent social news site and geek hangout Reddit aren’t aware that it’s owned by Condé Nast Publications, the 100-year-old magazine publishing giant behind such titles as Vogue, The New Yorker, and Wired. It may seem like an odd fit, but with Reddit resurging following rival site Digg’s spectacular implosion last year, Condé’s 2006 purchase of Reddit is looking increasingly like a smart bet.
In the past, Reddit’s small, beleaguered staff has frequently complained that Condé Nast treated them like a second-class citizen within the company, refusing to give them resources until they made more money, but failing to give them the ad sales staff to make that money in the first place, but times are changing. Reddit has recently announced new staff and a bigger budget and has reportedly moved up within the byzantine Condé org chart.
But with Reddit’s newfound success, Peter Kafka reports that Condé Nast is quietly contacting investors about buying a stake in Reddit, valuing the site at $200 million, and is trying to spin Reddit off into a semi-independent entity.
The theory: Taking Reddit outside of Condé Nast’s corporate structure would make the site that much more valuable, and would give it a better chance to compete for capital, managers and employees alongside the likes of zippy startups like Quora, StackExchange, etc.
Reddit’s operations manager and senior product developer Jeremy Edberg, known to Redditors by his handle jedberg, did not mince words in criticizing Kafka’s article. “This article is a complete fabrication. He should be ashamed to call himself a journalist,” Edberg wrote in a thread on the report, saying that he had confirmed with the Newhouse family, which owns Condé Nast, that the story was false. In a statement to The Next Web, he reiterated: “Kafka should be ashamed of himself for writing such unsubstantiated trash. Conde Nast and the Newhouse family have no intention of selling reddit or any part of it.”
This all might sound like a typical case of a sensationalist blog drumming up publicity, but here’s the thing: Kafka is a veteran tech and media reporter who has broken plenty of stories in the past, and when he writes that “sources tell me [Condé] is floating a $200 million valuation,” and that “People familiar with Condé Nast’s thinking say the spin-off was contemplated before the most recent round of departures,” he almost certainly has real sources telling him something. Then again, Edberg is a senior Reddit staffer, having been at the company since 2007, and he says that he is personally friends with Si Newhouse IV.
What’s really going on here? Condé isn’t officially saying much, besides “We love our Reddit asset, and it’s a core asset for us, and it’s getting more valuable every day.” Kafka, for his part, has not updated his post at all since publication.
Update, 8:54pm: Kafka has added the following update to his post: “Reddit employee Jeremy Edberg says, among other things, that my report is a “complete fabrication”. I stand by my story.”
(via All Things D, Reddit, TNW)
