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Why advertisers steer clear of Reddit

Ellen Pao quit as interim chief executive at Reddit on Friday because, she said, she couldn't meet short-term revenue goals the board of directors had set.

There's every reason to take her at her word. Reddit's business depends in part on advertising. What major brands would want to advertise on Reddit? Right now, apparently none.

Few people over 30 know much about Reddit. But anyone who read the news reports last week knows that the online messaging board is saturated with sexism, racism, venom and hatred.

Those news articles tended to dance around the details, however, so few know just how nauseating Reddit can be. Consider the section devoted to pictures and videos of black people getting killed or already dead, through accidents, shootings and other violence. A cartoon drawing of a black man being strangled with his head in a noose is situated in the page's upper left-hand corner, a sheeted Klansman looming in the background. An official note does set a limit, of sorts: "No calls for violence, it's prohibited by Reddit's site-wide rules." Oh, and you need to click an "18 or older" button to enter.

The title of the subreddit is too repellent to reprint here but makes clear that it serves as a form of twisted pornography, the equivalent of racial snuff films.

Most of Reddit isn't so loathsome. The site in essence is a bulletin board with an old-fashioned appearance where, Reddit claims, up to 160 million people a month post or read messages. Reddit carries thousands of sections called subreddits. Most are non-threatening, even banal: discussions on macrame, machine learning and more.

With so many users, and so much free content, Reddit should be attracting loads of advertising. Yet Reddit's main pages Monday showed only house ads — banner advertisements for Reddit itself. No major — or even minor — brands in sight.

"I can't remember the last time a marketer mentioned Reddit to me," said Nate Elliott, vice president and principal analyst at Forrester, the market researcher. "My answer to how marketers think about Reddit is: Most of them don't."

More subreddits than you want to imagine carry disturbing invective that sites such as Facebook and YouTube would never allow.

On WhiteRights, for instance, the aggrieved can take on not just blacks but also Muslims: Sample post: "Muslims are around 450% more criminal than non-Muslims." The subreddit Rape Is Fun apparently has been banned, but a search of the phrase brings up a long list of entries.

To its credit, Reddit has removed some material it deemed more objectionable than watching black people die. Last year, for example, Reddit removed the Jailbait subreddit, a pedophile magnet.

Reddit is a tough sell for advertisers, and it's not just the content, according to Jonathan Nafarrete, an executive at Blitz, an online marketing specialist. Reddit focuses not on banner ads but on so-called native ads, content that looks like a news story or a user post but serves as an advertisement. Nafarrete said the Reddit community rises up against anything that resembles an ad, so it's hard for native ads to pass muster.

"We spend a lot of time monitoring Reddit instead of advertising on it," he said. "It's a great resource to learn about what consumers are feeling."

Before she quit, Pao tried to expunge the worst of the worst from Reddit. But vocal parts of the Reddit community, in the tone of Silicon Valley-style libertarianism, laid into Pao. When she fired a manager considered popular with Reddit's volunteer moderators (the reasons for the firing are unclear), she faced an uprising.

The Reddit community is powerful. The company depends on the community's free labor to keep the site alive. Contributors don't get paid for their content. Moderators don't get paid for managing the subreddits. Without the free labor, Reddit would have no content on which to sell ads. Its business model would implode.

Online, critics picked apart Pao's leadership abilities. Others peppered her with a Reddit-style mix of sexism and racism.

Pao was especially vulnerable to community attacks. In March, she had lost a gender discrimination lawsuit against the powerful venture capital firm Kleiner, Perkins, Caufield & Byers, where she'd been employed. The suit revealed unsavory male behavior at the firm, but also allowed Kleiner Perkins to question Pao's business acumen. So Pao and her leadership ability began to dominate the conversation around Reddit's iffy business model.

Two 22-year-olds, Steve Huffman and Alexis Ohanian, founded Reddit in 2005. Conde Nast, the big magazine company, bought Reddit in 2006. In 2011 it was spun off as a separate company; it remained private with money from venture capitalists and angel investors, Mark Andreessen and Peter Thiel among them.

Those investors will want a return on their capital. They won't get much back if toxic content keeps major advertisers away.

To replace Pao, Huffman returns to run the company he co-founded.

As a young white guy, he better fits Reddit's user demographic. So, fair or not, he should avoid the sexism and racism Pao suffered. Whether he can excise more poison than Pao could, and meet those board-demanded revenue targets, remains to be seen. Pao's gone. Future months will determine how good a leader Huffman is.

russ.mitchell@latimes.com

Russ Mitchell is the Los Angeles Times technology editor

Twitter: @russ1mitchell

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