Earlier today AllThingsD's Peter Kafka offered up a new spin on rumors roiling that Reddit is trying to raise a round of outside funding.

This past Sunday, TechCrunch reported that Reddit is in the process of raising venture capital at a $400 million valuation. Thanks to a banner year that included an AMA from President Obama, 37 billion pageviews and 400 million unique visitors, TechCrunch said Reddit could now command double the valuation it had in early 2011 before its owners Conde Nast spun it out as a standalone operation. Reddit is still fully owned by Advance Publications, the parent company of Conde Nast. 

However, Mr. Kafka's sources say Reddit is raising an angel round from "certain influential investors" at a mere $1 million. According to ATD's report, Reddit still has $18 million in the bank and "doesn't need" the money. CEO Yishan Wong's goal is "buy-in, and input, from Silicon Valley’s elite investors." Says Mr. Kafka:

And any angel who does put money in is likely more interested in something other than a financial return. If Reddit figures out a scalable business model, it could well be worth much more than $400 million. But it’s also unlikely to be the ginormous home run that a small investor can get if they bet correctly on a bona fide startup, when their (relatively) modest contribution can buy them a real stake.

It's a good thing investors needn't be interested in financial return because a source with knowledge of the deal told Betabeat that "angel round means no board seat and no influence, which suits Conde Nast." The source also said: "The terms are outrageous; any angel investor would get tiny, tiny percentages. So Reddit gets cash without giving up anything at all."

Based on those terms, the source said, "I would be shocked if an 'elite' investor bites with these terms. Besides, this is Conde Nast and Reddit. They can talk with whoever they want. They got an AMA with Obama, for god's sake." Rather than access to Valley elite, "It's about getting money at very, very good terms."

But while Reddit has the clout and traffic, revenue is still reliant on just self-serve ads and "Reddit Gold" membership. "I suppose it's bit like investing in a restaurant," said the source. "The investor gets absolutely nothing in return for his money other than a guaranteed booth and a visit from the celebrity chef when he's on a date he wants to impress."

(Screencap: Facebook)

Some waved virtual pitchforks and some wept into each other's bosoms as Reddit users gathered in the town square (a.k.a. the Reddit front page) to voice their outrage at CEO Yishan Wong, who committed the ultimate act of betrayal directly in public view.

Today, in the wee hours of the morning, Mr. Wong posted a link on his Facebook page. But it wasn't just any typical link--not to Imgur, and certainly not to Reddit. Instead, the link he posted was to 9gag, Reddit's most notorious nemesis.

"Reddit's CEO, Yishan Wong, has betrayed us," reads a post currently at number one on the front page. Click through, and it leads to an Imgur screenshot of Mr. Wong's betrayal. With one word--"Whoa"--and a link to that goddamn picture of a young Christopher Walken kind of, sort of resembling Scarlett Johansson, Mr. Wong activated the deep reservoir of anger and revenge from which Redditors draw when one of their own abandons them.

The controversial post drew outrage from critics both on Facebook and Reddit. "The CEO of reddit.com just linked to 9gag.com. No words," commented one Facebook user, receiving almost 100 "likes."

Others took the move slightly more personally. "The fact that he actually browses 9gag saddens me deeply," lamented mcmunch20.

"fireable, imo," echoed facemelt.

Though Redditors continue to call for his head, Mr. Wong has not addressed his devastating move on Facebook or Reddit. Perhaps we should go check 9gag.

Mr. Wong (Photo: Quora)

With 3.8 billion pageviews in October alone, Reddit is still far from profitable, so it's betting on a subscription model to keep the site free of traditional advertising. Last week, the site began ramping up its efforts to convince users to invest in Reddit Gold. For $3.99/month or $29.99/year, users can buy a Reddit Gold account that affords them extra features like the ability to turn off ads and view more comments and subreddits per page.

In order to entice as many users as possible to join the gold rush, Reddit is considering accepting alternative methods of payment, including Bitcoin, the peer-to-peer cryptocurrency popular amongst the web's more hardcore users. Bitcoin enthusiasts may have a kindred spirit in Reddit CEO Yishan Wong, who has long held an affinity for the digital currency. In a thread in the Bitcoin subreddit, Mr. Wong had this to say:

Yeah, I've been a longtime subscriber to /r/bitcoin and had done a lot of investigation into BTC quite a bit about a year ago before I took the reddit job (on my own, as a subject of interest).

So - no promises, but we're looking into it.

If Reddit does choose to accept Bitcoin, it could help to greatly improve the currency's reputation, as it has occasionally been pigeonholed as simply a way to purchase illegal goods on the web's black market. Incorporating Bitcoin into the Reddit Gold family could go a long way in helping to legitimize it. As one Quora user put it, "Wow. This would be a game changer for Bitcoin awareness."

For Reddit, the move would also make sense and help support the site's bottom line, as Mr. Wong noted recently that Reddit is not profitable. In the wake of the Violentacrez scandal, it could also encourage Redditors who bank on their own anonymity to buy subscriptions while still remaining anonymous.

As for the Bitcoin subreddit, users are already devising schemes to convince Mr. Wong to make good on his word. "People with bitcoin sleeping in their wallet: pledge to buy reddit gold account with bitcoin today," wrote one user. "This is the best thing you can do to personnally [sic] help bitcoin become more mainstream. Reddit is a faily [sic] large website and that would net us a lot of publicity."

(Photo: Reddit)

With 3.8 billion pageviews and 46 million unique visitors, Reddit CEO Yishan Wong published a post to the Reddit blog asking users to buy beefed-up premium memberships in order to support the growing site. [Reddit Blog]

A handful of geography professors took some of the racist tweets sent out after President Obama's re-election and mapped them. It will surprise no one that the majority of these tweets were clustered in the Southeast U.S. [Floating Sheep]

Facebook's hardware team wants to build biodegradable servers. [Wired]

A project out of Microsoft Research translates English into Mandarin in the same voice. [Technet]

Now you too can own your very own Goatse email address. [Gawker]

Reddit CEO Yishan Wong. (Photo: Reddit)

As the story of notorious Reddit user Violentacrez and the controversial subreddits he moderated sinks its tentacles into the greater internet, Reddit administrators--known for their laissez-faire attitude toward site moderation--have remained astonishingly mum. In conversations with Betabeat, Reddit general manager Erik Martin gave little indication as to how Reddit intends to handle the Violentacrez and Creepshots fracas, except to admit that two of the subreddits had been banned by admins.

But a thread published by Reddit CEO Yishan Wong, posted to a private subreddit for moderators and obtained by Gawker, sheds some light on Reddit's intentions toward the controversial content on its platform:

We stand for free speech. This means we are not going to ban distasteful subreddits. We will not ban legal content even if we find it odious or if we personally condemn it. Not because that's the law in the United States - because as many people have pointed out, privately-owned forums are under no obligation to uphold it - but because we believe in that ideal independently, and that's what we want to promote on our platform. We are clarifying that now because in the past it wasn't clear, and (to be honest) in the past we were not completely independent and there were other pressures acting on reddit. Now it's just reddit, and we serve the community, we serve the ideals of free speech, and we hope to ultimately be a universal platform for human discourse (cat pictures are a form of discourse).

As Gawker notes, Mr. Wong did not mention Violentacrez by name in his note, nor did he directly address the myriad issues surrounding controversial subreddits like Creepshots. Instead, he reiterated the policies established following last year's shuttering of the subreddit Jailbait, a forum for users to post sexualized photos of minors:

We will ban illegal content, and in addition sexualized pictures of minors, immediately upon any reports to us. We gave our rationale for that back when that issue was resolved, and we will maintain that policy for the same reasons.

This is where Reddit continues to draw the line: it will not ban sexist, misogynistic or racist content, but it will ban anything illegal, as well as images of minors that could be considered "sexualized." That means Creepshots--however offensive it may be--is here to stay. This is because the vast majority of photos posted in Creepshots and its ilk are taken legally and--when moderated properly--do not break any of Reddit's rules.

Oh, and Mr. Wong even provided a handy little TL;DR for moderators with a case of ADD:

TL;DR: We stand for freedom of speech. We will uphold existing rules against posting dox on reddit. But the reality is those rules end at our platform, and we will respect journalism as a form of speech that we don't ban. We believe further change can come only from example-setting.

Mr. Wong was tapped as Reddit's unconventional CEO back in March, after the "front page of the internet" was spun out from its corporate handlers, Advance Publications. Just after publishing the post, he said he was going to "nip off for a spot of tea," because he apparently moonlights as Mrs. Doubtfire.

Global Reddit Meetup Day in Central Park.

“Look at the number of cargo shorts here,” remarked the skeptical companion Betabeat had dragged along to the Global Reddit Meetup NYC on Saturday, as we stood on the outskirts of the picnic in Central Park where close to 200 Redditors snacked on chips and soda and mingled in the shade.

As we approached the group congregated around a large sign featuring the Reddit alien logo,
we were invited to join in a game of “Dino Ball.” “It’s the best game ever. Come over and see,” we were advised by a circle of 20-somethings hitting what appeared to be a small green children’s ball with painted teeth. Other picnickers played soccer and tossed Frisbees. Discussion threads about the event had mentioned Super Soakers, though most attendees seemed fairly content chatting in small circles—including Reddit CEO Yishan “sparklepants’ Wong, who hung out at the picnic for about an hour, handing out stickers and taking photos with other Redditors.

The picnic, one of almost 500 meetups that took place on Saturday as part of the 3rd Global Reddit Meetup Day, was described on the social news website as “just a bunch of geeks and nerds hanging out” with the friendly addendum, “we do not care if you are a Redditor or not.”

Despite this disclaimer, attendees seemed incredulous when Betabeat admitted to not spending time on the site regularly. “You said you’ve been on Reddit briefly. How is that even possible?” an employee of the NYU Math Department who frequents r/Astronomy, r/Fitness, and a “couple of music subreddits” asked in disbelief.

“Here’s what you should do. Spend half an hour a day browsing on Reddit every day for a week. Then, after a week, try to stop,” an enthusiastic Redditor in army pants and a tank top said.

Many of Saturday’s picnickers are regulars at weekly Reddit meetups in the city. “I’m kind of a meetup junkie” said Marc Ebuna, who works in IT (“pretty much like everyone on Reddit,” he said) and attends weekly Reddit board-gaming meetups.

Others go to weekly meetups at Peculier Pub in the West Village on Tuesday evenings, where there are reportedly upwards of 50 attendees. “The Redditors usually take over the bar,” a regular informed us. “But we don’t talk about what we saw on the Internet.” He then explained, in detail, the perks of the Men’s Fashion Advice subreddit, r/malefashion. “If you shave your beard, you can post a photo to the thread and ask, ‘is this a good change?’ And people will be like, ‘yeah, man,’” said the Redditor, who didn’t have a beard, though any additional fashion sense was hardly noticeable.

Yet Jacob Shufro, 22, a software engineer at Peek, inc. and one of the event’s organizers told us afterward that the newcomers outnumbered the regulars at Saturday’s picnic. “At the regular meetups, the regulars outnumber the newcomers probably around 2 to 1, but every time we have a picnic we see a huge turnout of new faces. I’d guess this one was 3 or 4 newcomers for every regular.”

John Seto, 28, another one of the event’s organizers noted that this was one of the first times they’d seen subreddits represented at a meetup. Joey Castillo, a mobile app developer came to the picnic wearing an ”I Love Gamers” T-shirt and holding a sign for r/ainbow, an umbrella LGBQT subreddit, to help users find each other. In another area of the picnic area, members of the subreddit r/tall gathered--most of them sitting.

“R/tall, describe yourself in a sentence,” Mr. Seto called out for Betabeat’s benefit. “Yes. Tall,” was the extent of the response.

“We haven’t seen the ‘gonewilders’ here yet, though,” one Redditor remarked with a laugh, referring to r/gonewild, the notorious subreddit where Redditors post nude photos of themselves, which are subsequently upvoted or downvoted.

“Yeah, but they’re definitely here. They just haven’t revealed themselves yet,” another responded jokingly.

“The event was, and I think we all agree on this, very successful,” Mr. Shufro told Betabeat afterwards. “We had the biggest turnout we’ve ever had, the weather was perfect, and everyone seems to have had fun.”

Redditors congregated for most of the afternoon before dispersing around 5 p.m., many heading off to various bars on the Upper West Side, accompanied by their new friends. Others were worn out from an afternoon of socializing. After the event, Mr. Shufro told us that he “went and ate some Ramen noodles, watched Battlestar Galactica, and went to sleep. It was an exhausting day.”

Mr. Martin (Photo: Reddit)

The top-scoring link of all time on the social news website Reddit is a post that users were never meant to see at all. It is titled “test post please ignore,” but almost 27,000 Redditors found it so amusing that they voted it up.

That is testament to the website’s impassioned community—and their brand of dry, often geeky humor (the site’s logo is an alien, after all). But Reddit’s user base, which a recent PBS documentary pegged as 72 percent male, has wide-ranging interests. Other top posts include a link to a news item about the elderly volunteering to clean up nuclear waste in Japan following the 2011 tsunami, and a Q&A session with the famous astrophysicist Neil deGrasse Tyson.

Reddit is one of the country’s most highly trafficked websites, but its general manager, Erik Martin, keeps a remarkably low profile. Most Redditors know the 33-year-old Mr. Martin solely by his username: HueyPriest.

“Part of that’s just me, but part of it is like, we never wanted Reddit to be about the people who work there,” Mr. Martin told Betabeat on the second floor of a San Francisco café that was swiftly inching toward sweltering in the late April heat. Dressed in a plaid button-down and jeans, with dark circles forming beneath his eyes, he looked every bit the startup ingenue. “We don’t want it to be this cult of personality thing that I think some sites get turned into.”

Owned by Advance Publications, Reddit is not a publisher but a platform that allows users to share links, stories and multimedia. Often referred to as the “front page of the Internet,” it is notorious for inside jokes. While cartoon rage comics, for instance, may have originated on the ever-more-offensive 4chan message boards, they certainly reached their apex on Reddit (just read the recent New York Times article for confirmation on that). Users also can create their own “subreddits”—or sections—based on any topic of their choosing, and volunteers with no formal association to Reddit moderate them. Democratization is inherently woven into the site’s functionality: users vote posts up or down at their pleasure: The more votes a post gets, the better chance it has of making it to the “front page,” where the most readers will see it.

And an eye-popping number of users do see it: the site averages 2.5 billion pageviews a month. With user statistics like that, and an especially loyal following, detractors have derided it as a “hive mind,” but that doesn’t fully account for the complexity and generosity of the community: A few months ago, the site hosted a poignant question-and-answer session with a survivor of Norway’s Utøya massacre, for example, and there are countless threads that help collect donations for the community’s sick or needy members.

“‘Hive mind’ is often used pejoratively, and I definitely understand what people are referring to, but I think the idea of a hive mind works pretty well for bees,” offered Mr. Martin, when asked about Reddit’s “upvote now-assess later” tendencies. For bees, he explained, a hive mind means that it takes a democratic consensus to make an important decision, like where to construct a new hive.

“[The hive mind] is a very fast, sort of reactionary thing, and that has bad results sometimes, results where people are not as skeptical as maybe they should be. You need to make sure enough bees are going to double-check the new location. You need a bunch of bees going like, ‘You are right, that is a pretty great new home, it has a tire swing.’”

A little history: In 2005, the site’s young co-founders, Alexis Ohanian and Steve Huffman, were accepted by the startup incubator Y Combinator for its first-ever round. A year later, in a push to expand its online brand, Condé Nast acquired Reddit for between $10 million and $20 million. At the time, Reddit averaged just 70,000 unique daily visitors.

After the sale, Condé worked feverishly to fold Reddit into its stable of well-established print brands, like Vogue and Wired. “We thought of Reddit, [technology blog] Ars Technica and Wired as what Condé Nast deemed the ‘innovation group,’” said Jena Donlin, who runs business operations for Reddit and still works out of the Condé Nast office in Times Square.

Mr. Martin, who had majored in American Studies at Tulane and worked in the documentary film industry, served as the site’s community manager at the time, a role that he said entailed “answering user questions, dealing with spam and finding cool things in the community to promote.”

By all accounts, Mr. Martin also played a significant role in ushering in a successful transition from an independently run website to a division of a major publishing conglomerate. What made the job even harder was that Reddit’s approach to publishing exemplified the democratizing influence of the web, which at that very moment was violently destabilizing the whole we-speak-you-listen model that Condé Nast, with its pantheon of all-powerful editors, had long since mastered.

As Reddit’s user base continued to grow following the acquisition, the tension between the democratized user-generated site and its ancient publishing parent became more pronounced. Reddit does not offer traditional advertising, so its primary stream of revenue came in the form of Reddit Gold, a paid premium membership subscription, as well as what Mr. Martin called “self-serve ads for mom-and-pop shops” and carefully selected marketing partnerships.

The site, which boasts a barebones user interface that harkens back to the halcyon days of ’90s Usenet groups, has always shunned traditional advertising, a stance that even a cash-starved, ad-hungry Condé Nast couldn’t change. Monetizing Reddit is something Condé Nast “has still not been able to figure out,” Mr. Ohanian said in a 2010 episode of Big Think, adding, “Reddit has a fantastic audience ... How do we advertise to them in a way that isn’t screwing them as a user and at the same time providing enough value to an advertiser to want to do it?”

(Photo: Flickr.com/teuobk)

But in August 2010, an advertising controversy erupted between the stodgy parent company and its willful child. The activist group “Just Say Now” wanted to host self-serve ads on Reddit in support of the proposed California marijuana legalization law Prop 19, but Condé Nast refused. The Reddit team responded by agreeing to host Just Say Now’s ads on their site for free, a move that was still technically within the bounds of the parent company’s rules, but made a strong point.

Reddit’s traffic continued to explode, and in early 2011, the site was getting upward of two billion pageviews a month. Condé Nast wasn’t equipped to handle the technological and cultural challenges that came with that kind of traffic. And the tensions between the little-website-that-could and its old-school parent company were starting to take their toll. “In the spring of 2011, we had one programmer and two system administrators and me,” Mr. Martin explained. “It was kind of a rough time, and I was like, ‘If Reddit needs me to move out to San Francisco, I’ll do it. I’ll do whatever Reddit needs. I can’t let this fail.’”

Mr. Martin agreed to move to San Francisco at the behest of Condé, and took on the general manager role. He began to grow the team, hiring a handful of programmers to administer the site. Finally, in September 2011, the company spun Reddit out of the Condé Nast family into its own standalone subsidiary, while still retaining ownership.

“We don’t want to get in users’ way,” Ms. Donlin explained. “We want to serve what the community is already doing. Condé Nast understood that, and it’s why we’re independent. They understood that we needed to be able to do that in order to grow. And they realized in the current structure of Condé Nast, it wasn’t as easy to [grow] because there wasn’t a precedent that was set. We’re more bottom up whereas Condé is more top down.”

Mr. Martin agreed. “The process didn’t allow for [what Reddit needed], that was the main tension. [Condé’s] process is set up for sales cycles that take longer and there’s more sort of time for that kind of vetting and decision-making. But most of the Condé brands have more people on the sales side than we have total employees.”

Reddit hired its first-ever CEO in March 2012, an ex-Pay Pal and Facebook engineer named Yishan Wong. Now, Reddit is a subsidiary of Advance, separate from Condé, and reports to a board populated with executives from both Condé and Advance, along with Mr. Ohanian. “We’ve been working with Advance Publications to complete [R]eddit’s spinoff,” Mr. Wong wrote in a triumphant blog post on Reddit, “[including] a revamped capital structure that will allow [R]eddit to manage its own finances and operations.”

“The way that the site works,” said Kevin Morris, a staff writer at the Daily Dot, in a recent PBS segment about Reddit, “[is that] it tends to attract people who want to know the truth.” In January 2012, the Reddit community’s large-scale vocalization of their opposition to SOPA and PIPA, coupled with support from equally passionate communities on Tumblr and Wikipedia, eventually persuaded lawmakers to table the legislation. Reddit, an online community that had only been around for six years, had successfully helped to defeat the American government.

IN APRIL 2012, MUCH to his surprise, Mr. Martin was named one of TIME Magazine’s 100 most influential people. For the event, Mr. Martin donned a tuxedo for only the second time ever—the first being a friend’s wedding—and completed the outfit with a shiny pair of Reddit cuff links.

“It was very surreal,” he confided a few weeks after the event. “I’ve never been to something like that. I got to meet Ralph Nader, who is adorable. He asked about Reddit and I explained it to him, but I don’t know if I was successful.”

Mr. Martin is unfailingly humble about his contributions to Reddit. “Any credit I would get,” he said, “would be for not fucking it up.”

“At Reddit, he doesn’t say, ‘Hey, check me out,’” explained Nils Olsen, an old friend of Mr. Martin’s. “He says, ‘Hey, check you out.”

“He can be very humble,” agreed Ms. Donlin. “That humbleness has also been what’s made him so successful.”

Mr. Martin will be moving back to New York in July to focus on the business and media aspects of the site and to run the New York office.

As for that TIME 100 award, it doesn’t appear to have gone to his head.

“Ralph Nader went to give me his business card and he said, ‘Well, I kind of ran out of my current cards, but I grabbed this stack of cards from the 1970s.’ All it had was a P.O. box. It didn’t have a phone number, so he scribbled it on the back,” he said.

“I was like aaahhhh, I am framing this! It was amazing.”

That sounded like an upvote.

A version of this story appeared in the New York Observer the week of Wednesday, June 13th.

(Photo: Quora)

Yishan Wong, a Hawaii native, has held senior engineering positions at both PayPal and Facebook. In 2010, he left the social network. He's an angel investor and a co-working space cofounder, and has been "doing random startup consulting" since he left Facebook. We, like many others, wondered what he'd do next.

Apparently, the answer to that is "be the CEO of Reddit." It's surprising because Mr. Wong is a technologist, and Reddit is at a crucial moment after spinning off from mothership Advance Publications. "But as I continued the conversations, I came to understand that reddit wasn't looking for a conventional CEO candidate, because reddit is not a conventional company," Mr. Wong wrote in his introductory blog post, in which he said he was not looking to make "big, bold changes." Reddit cofounder Alexis Ohanian wrote noted that Mr. Wong has been a Redditor for a really, really long time. Redditors welcomed their new overlord with a series of masturbation puns.