I have no idea what their hosting costs were, or their 5 salaries, but they did make enough to stay afloat, although not enough for CN to approve more staff. Jedberg's commented in this thread, so I suggest you ask him whether they were profitable pre-gold.

Their hosting costs were around $35k according to http://www.reddit.com/r/blog/comments/ctz7c/your_gold_dollar...

Since then afaik they've added more servers.

> "but they did make enough to stay afloat"

I think Reddit has been operating at a loss for quite some time.

Actually they were around $22,400 according to the comment just under that. Still, I wouldn't be able to tell you whether or not they operated at a loss. You'd have to ask jedberg.

There's simply no way they're making anywhere near that from advertising. I would even have a hard time they're making that a year from advertising.

300 million pageviews/month goes a long way. Sure, their CTR is probably lower than most sites, but their traffic is huge.

Let's say their CTR is 0.1%. That's 300k clicks/month. I'm building in some wiggle-room here, as a 0.1% CTR is abysmal, but often their ads aren't really ads. Even at $0.01/click, that's still $30k/month. More than enough for hosting. Now, I'd hazard a guess that most of my numbers are quite a bit on the low side, as reddit has operated for years without CN shutting the doors. Also, from what the admins have intimated from time to time, they make money, but not enough to register on CN's radar.

I wouldn't discount their ad sales; traffic like that carries a lot of weight.