Conde Nast Spins Out Reddit, Without Letting Go
Five years after buying Reddit, Conde Nast is giving the social news site a gentle shove out the door.
The publisher isn’t pushing Reddit very far away, though. It is spinning out the company as a standalone operation, but will retain full ownership of it, for now.
Conde’s idea is that if Reddit operates on its own, it will be able to grow faster and attract a new breed of employee, including a new chief executive, a position it recently began trying to fill.
The publisher has also recruited Reddit co-founder Alexis Ohanian to sit on the “new Reddit”’s board of directors, along with Conde president Bob Sauerberg; chief technology officer Joe Simon; and Andrew Siegel, who heads business development for Advance publications, Conde’s parent company. Conde says it will bring in other outside directors besides Ohanian.
“We don’t want Redditors to think that anything has changed from their perspective, other than that the company has the ability to just go do things,” says Ohanian. In the past, Reddit employees have complained that Conde hasn’t given them enough resources to maintain the site, which now attracts some 20 million users who generate 1.5 billion page views per month.
The move comes after Conde talked to several investors about selling off a chunk of the company as part of the spinout; at the time, it had floated the notion of a $200 million valuation. The Conde party line is that they’re still open to the possibility but don’t need to do it.
“We think right now we have no need to take in outside funding,” says Steve Newhouse, who runs digital operations for Advance. “We can set up a structure that has the benefits of outside influence, without giving up equity to an outside firm.”
You can forgive outsiders if they look at what Conde is doing and scratch their heads: The company used to be owned by Conde Nast. And now it’s still owned by Conde Nast. So it’s non-news, right?
Sort of. But even if nothing else happens to Reddit’s corporate structure from here on out, there’s something to be said for operating outside of a corporate parent’s org chart, even if they hold the keys/run the table/pick your metaphor. That happens to be how AllThingsD operates — in our case, the corporate umbrella belongs to News Corp. — and I can tell you that from an employee’s perspective it’s a pretty effective set-up.