Technology

Snoop Dogg's cash for Reddit users in sharing scheme

Snoop Dogg Image copyright Getty Images
Image caption Snoop Dogg joins a pack of investors putting $50m (£31m) into the social news site

Rapper Snoop Dogg, actor Jared Leto and Paypal co-founder Peter Thiel are among the famous names investing in social news site Reddit.

The site said it raised $50m (£31m) in funding, and that it would take the unusual step of giving some of it to its users in the form of shares.

This could be done via a new crypto-currency like Bitcoin, the site has suggested.

The funding round values the company, which was set up in 2005, at $500m.

The new money will be used to improve the company's infrastructure, including adding more staff to its current workforce of 51.

The investment is being led by Sam Altman, president of Y Combinator, a major investor in mostly US start-up firms.

"We're working on a way to give 10% of our shares from this round to the Reddit community," he wrote in an Ask Me Anything (AMA) session on the site.

"I hope we can increase community ownership over time - I've always thought communities like Reddit should mostly own themselves, and that it's time for some innovation around corporate structure here."

The site said it has not yet decided how this share scheme would work - although Reddit's chief executive Yishan Wong suggested a specially-created crypto-currency could be an option.

In a posting on Reddit, Mr Wong said: "We are thinking about creating a crypto-currency and making it exchangeable (backed) by those shares of Reddit, and then distributing the currency to the community.

"The investors have explicitly agreed to this in their investment terms."

However, his post was prefaced with the words: "This plan could totally fail."

He added: "If it does, we will find another way to get the shares to the community somehow."

Fappening

Reddit bills itself as the "front page of the internet", a site on which people share web links which can then be either "up-voted" or "down-voted" by other users.

It means, in theory at least, that the best quality posts rise to the top of Reddit. Reaching the front page, reddit.com, means millions of clicks.

The same voting system applies to comments on the site too, meaning relatively low levels of spam and trolling when compared to other sites.

Image copyright Reddit
Image caption Reddit - whose mascot is this alien - is one of the internet's most popular websites

But Reddit is not without its problems. Aside from the frontpage, the site is made up of subreddits - smaller sections that can be set up by anybody.

This has led to controversial sections appearing in the past. In 2012, the site closed /r/creepshots, a subreddit sharing pictures of women taken in public but without their knowledge.

It followed the closure of another controversial area - /r/jailbait - which showed sexually suggestive images of underage girls. At first Reddit's Mr Wong said the section would not be shut, citing reasons of "free speech". But after a story by CNN's Anderson Cooper, the area was shut and remains so.

More recently, Reddit was at the centre of the celebrity nude photos leak. A special section, called The Fappening, had been set up - but later closed.

Richard Marsh, a partner at investment group DFJ Esprit, said Reddit needed to grow but should do so without upsetting its current community, who might resist more efforts to commercialise the site.

"They've raised a large amount of money from some large funds with good track records," he told the BBC.

"I think they're doing something novel. [The investors] have bought in to whatever plan they have - but it hasn't yet been shared with users. Whether it works is still to be seen.

"You'd only know by trying."

Follow Dave Lee on Twitter @DaveLeeBBC

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