companies invest in their business units and let them run at an operating loss for long term viability all the time. I call bullshit. The reddit guys need to do a better job selling their plans to their bosses.

Conde Nast wants a return on their investment (rumored at $65m). So tiny and flat profits are going to be unacceptable to them.

Probably the situation is this: Advertising isn't very lucrative on Reddit, so Nast has told Reddit management that they must come up with some plan to steepen the profit curve, or they're toast.

And this is what they've come up with.