The problem is most high quality advertisers don't want to have their brand promoted along side user generated content. So while Reddit has a ton of traffic, much of that traffic is worthless to the most desirable advertisers.

Isn't that exactly Facebook's business model?

Sort of. Facebook also pours money into making its platform family-friendly through moderation teams, auto-detection of obscene/inappropriate content, etc. Not to mention all the analytics and targeting capabilities of their advertising programs. Being a household name, they're also so huge that it's impossible to ignore - grandma's not on Reddit but there's a pretty good chance she's on Facebook.

Exactly the same problem as Tumblr.

> It's not. Reddit could easily sell targeted ads based on subreddits

Except Redditors are explicitly anti-advertising. You can't have both - the current community/culture and billions in revenue.

Ad-haters at quite capable of running adblockers, and they aren't all of Reddit. Most people tolerate tasteful ads

True, but you can't scale tasteful ads.

> It's not. Reddit could easily sell targeted ads based on subreddits (e.g. inking a deal with Uniqlo to advertise on /r/malefashionadvice or /r/femalefashionadvice).

I think they would love to do that, but for whatever reason Uniqlo and others won't buy in. Maybe someone will correct me, but I think they've been trying to sell more ads for many years with little success.

I could see ads if used sparingly and subtly. I applaud their effort to find alternate ways to finance.

They do this. http://reddit.com/advertise