Imgur Raises $40M From Andreessen Horowitz

http://bits.blogs.nytimes.com/2014/04/03/imgur-image-sharing-site-raises-40-million-from-andreessen-horowitz/?_php=true&_type=blogs&_r=0

by jmduke • 12 years ago

207 138 12 years ago

bits.blogs.nytimes.com

ozh• 12 years ago

I don't get how such a bandwidth hog can run only off a few ads.

Splendor• 12 years ago

That's not their only revenue stream. They also sell Imgur Pro accounts.

LandoCalrissian• 12 years ago

It looks like in 2012 they transferred 42PB of data, which is pretty crazy. I assume their numbers are far higher now. It's impressive they can make it all work.

I didn't know that Reddit had invested money in the company either, that could potentially be a pretty big boon for them.

Consultant324523• 12 years ago

I wonder if 42PB of data would trigger a bandwidth cap on my T-Mobile unlimited 4G plan.

Matsta• 12 years ago

They use Edgecast's CDN (which is now owned by Verizon?)

https://www.edgecast.com/company/news/edgecast-powers-imgur

Off the top of my head, I think they offer their bigger clients pricing of $0.02-0.04 per gigabyte. I could be wrong though.

44040192gb *0.02 = $880,803 / 12 = $73,400/month.

IgorPartola3• 12 years ago

Don't you know? HostGator gives you unlimited bandwidth? :)

Realistically, bandwidth is relatively cheap and the type of advertising they show on Imgur is likely pretty expensive. Anything to do with home buying (what I've been seeing lately) is usually pretty expensive CPC-wise.

raverbashing• 12 years ago

My experiences with HostGator indicate that, even though they may offer unlimited bandwidth, your site will stop at the first slightest increased usage

DangerousPie3• 12 years ago

If I remember correctly they use Cloudflare quite a bit. This probably decreases their actual traffic by a tremendous amount, since they vast majority of their bandwidth comes from easily cacheable images.

jonknee2• 12 years ago

CloudFlare doesn't bring your bandwidth costs down, it just makes them get sent out faster. It is indeed impressive that they can serve so much based on ads that many people never see (due to embeds and the like).

korzun6• 12 years ago

The bandwidth now is cheap, when I launched Image Socket I was on two dedicated machines at FDC that served closed to a thousand requests per second.

The revenue on advertisements would be 10x (from what I recall) of what I spend on the hardware.

The trick is to approach the problem smartly via bandwidth control techniques (ip rate limiting, proper bandwidth queues via ipfilter, etc) and identify abuse early.

In 2014, their margins would be (again my opinion) double of what mine where.

Hardware is cheaper, bandwidth is cheaper and you have easier access to really fast and complex caching solutions.

ilaksh2• 12 years ago

They don't. They are running off of a few ads plus 40 million dollars.

baldfat• 12 years ago

Raises = gifted and never will see a return of investment????

Consultant324523• 12 years ago

Marc Andreessen is on the board of Facebook. My guess is he wants to pump it up and then get Facebook to buy them.

foobarqux• 12 years ago

Like Oculus?

zimpenfish• 12 years ago

This is my fear.

bane6• 12 years ago

I'd add that one of the reasons they became so popular is largely due to a very tolerant reddit admin team.

Try to make a similar service today and get growth on reddit the same way and you'll likely get added to the global spam block list.

Reddit has also invested an undisclosed amount, which Mr. Schaaf said was “very small in comparison.” Regardless of size, the investment from Reddit represents a formal business connection between two entities that have so far shared only a legacy and community.

Imgur was originally created as a gift to the Reddit community for easy image sharing, and now has grown to be larger than Reddit itself, pulling in over three billion monthly pageviews. What began as a platform for uploading images, Imgur has become a vibrant and shrewd community of commenters, uploaders and up-voters.

edit

Here's the origin in case anybody's interested

http://www.reddit.com/comments/7zlyd/my_gift_to_reddit_i_cre...

If you look at MrGrim's early post history, it's a blatant violation of reddit's anti-spam rule. However, it was (and is) insanely useful and entirely disrupted the image hosting "industry". Even today, the vast majority of MrGrim's posts are imgur posts, which is an explicit violation of the "rules".

It's not a knock against imgur or reddit (I love both), just an interesting observation.

You can violate the rules if you're not obviously a bad actor. In this case, imgur and MrGrim was clearly spam, but it wasn't the bad kind of spam that everybody hates, it was the good kind of marketing where people actually get something useful from the exchange.

edit #2

IIR imgur also had an explicit no porn policy for a very long while, except for NSFW reddits.

edit #3 and an AmA

http://www.reddit.com/r/IAmA/comments/y81ju/i_created_imgur_...

darkstar999• 12 years ago

Try to make a similar service today and get growth on reddit the same way and you'll likely get added to the global spam block list.

I completely disagree. Unless you are being scammy, spammy, or otherwise violating reddit rules, you'd be fine.

opendais5• 12 years ago

The way the admins went after Sir_Cmpwn makes me think this is incorrect.

sheetjs• 12 years ago

largely due to a very tolerant reddit admin team.

... and a very tolerant reddit user base.

Even though direct links to images are available, many people share the imgur page link instead (with the intention of helping imgur show more ads)

IgorPartola3• 12 years ago

And the comments on Imgur. I'd say the comments on there are what makes the site. They are witty, funny, and sometimes extremely informative. Whenever I link to Imgur I use the "regular" link, not the direct one, because people will get a kick out of the comments. Don't particularly care about their ad revenue.

genwin• 12 years ago

It's a symbiotic relationship, no tolerance needed. Reddit would be less popular without Imgur.

Sir_Cmpwn18• 12 years ago

I have tried to build a similar service (https://mediacru.sh), and made a lot of choices that would supposedly increase goodwill:

- No ads

- Open source

- Extremely transparent

The opinion of Reddit's userbase was almost universally positive.

However, the Reddit admins did not like that at all. They banned the domain for weeks right after launch, and only unbanned it after quite a lot of begging. They also shadowbanned my personal account for a while, and that wasn't too easy to get lifted, either.

They're very hostile to anything but Imgur these days. Hell, I worry about writing this here, because if they see it, we might get into another round of bullshit with them.

opendais5• 12 years ago

For what it is worth, I think Mediacrush is awesome. I'd use it over imgur. However, I do not use image hosting in general enough to consider spending money on it.

And honestly, I worry about the long term financial sustainability of your project which is why if I ever had a need [a reason I'd spend money], I'd probably host it myself. That is one reason I think transparency [while nice in theory] is dangerous if implemented too early in practice. I know I'd have dropped it the first month I went -$400. :/

Do you have any plans beyond donations to plug that hole?

bane6• 12 years ago

Wow, what a great service! I've heard of several other cases like this which is why I brought up reddit's unusual leniency towards imgur at all. As we can see by reddit's investment there was clearly some kind of out of band discussion that helped legitimize imgur on the site.

In their defense, before imgur came along, image hosting was a pretty terrible affair, front to back. Imgur was such an obvious improvement over what came before that it was hard to argue against.

mtrn• 12 years ago

Nice, thanks for building this service. I'm all for diversity.

afterburner• 12 years ago

Does the Reddit community/admins also tend to downvote any picture not submitted via imgur?

lanaius• 12 years ago

You must be doing something correct since RES updated to better support you.

markkat• 12 years ago

I'll check it out. It's nice to have another option. Drop a link on Hubski. Most of us there use imgur. (I run Hubski)

korzun6• 12 years ago

You either did something questionable or broke the rules.

Also in reality, you have no chance trying to compete with Imgur on their own home turf especially that late in the game.

rgbrgb3• 12 years ago

Yes, a lot of the big subreddits have whitelists that your site has to get on by being popular--kind of a catch 22.

ghani2• 12 years ago

You promote your site on reddit very aggressively, and consistently smear reddit's moderators as bad guys. You're a liar, and definitely not some poor victim.

edit:

Things you have done include running a bot to constantly promote MediaCrush on reddit (which you refer to as, "a little spammy"), vote-gaming by upvoting your bot's posts, removing any and all of your posts where you receive negative press, and slandering reddit moderators.

jotm• 12 years ago

Can't you get the .com domain? Every time I see your site being mentioned I avoid using it because of the domain name for some reason. It just sounds weird and not too legit.

How do you even say it out loud? "It's Media C R U dot S H. Mediacrush, get it?" :-). Then again, Imgur isn't much better...

ilaksh2• 12 years ago

Clearly reddit had an early vested interest and used their dominant media position to "pick a winner" in that space which enriched their portfolio.

This should certainly be illegal if it isn't already. Although, making anything related to money illegal in this society almost seems futile at this point with de-regulation so out-of-control.

colmvp• 12 years ago

I use mediacrush all the time on /r/hockey.

Didn't know that the Reddit admins didn't like it.

lawnchair_larry• 12 years ago

Funny that they are taking the "gift to reddit" thing at face value. He launched it on Digg first.

mahranch3• 12 years ago

He actually launched it on reddit first, but deleted his announcement post and then re-posted it a few days later. He said as much in one of his interviews, I think it's linked in a comment above.

mbesto• 12 years ago

It'll be interesting to see how this plays out. VCs want one thing - money (note - that's not a bad thing). If for some reason that this motivation (and more importantly the implementation of this motivation) pisses off Reddit users, then Reddit will ostracize the hell out of Imgur, it will lose a large chunk of traffic and something will replace it overnight.

As Gabe Newell once said "You can't lie on Reddit".

psykovsky3• 12 years ago

I thought the saying went: "You can't get laid on Reddit" but whatever...

drzaiusapelord• 12 years ago

This is what I dislike about reddit. They let MrGrim in and now imgur is almost as bad as the conventional image hosts. Everytime I visit imgur, the interface has gotten more complex and now its trying to be a social photo sharing site of its own, instead of a just a simple host.

So lets say I went out and created a competing service, which is something I've considered. Now the reddit admins will ban me for violating the rules while MrGrim gets a free pass because of community politics.

Its incredible to me that reddit sells itself as being above the fray and an alternative to sites that had more patronage, when its a lot of ' meet the old boss, same as the old boss.' I suspect popular sites have a typical lifecycle. Launch, buzz, a golden period, then a decay once monetization becomes a concern, then another group of hungry 20 somethings eats its lunch.

gagaga2• 12 years ago

Reddit has never been above the fray. Look into their terrible record of admins censoring content and the violentacrez fiasco.

veemjeem• 12 years ago

imgur is not almost as bad as conventional image hosts. I guess you haven't used any conventional ones lately that block the image after bandwidth exceeded? Also, most of the other ones are even more spammy than imgur. Imgur still allows direct linking of the image and has less ads than most of the competition.

terpua• 12 years ago

Success in startups require 2 ingredients: 1) hard work and 2) luck. Hard work alone is not enough.

Looks like imgur's "lucky moment" was Reddit admins allowing it despite it being "spam".

yuhong• 12 years ago

I once suggested a HN style about box on Reddit partly to resolve problems like this.

frade33• 12 years ago

Seeing the comments below., the similar questions could be raised for a even bigger bandwidth beast. Youtube. And imgur is essentially the Youtube of images.

And speaking of profits, 140 Characters is barely generating any revenue despite it would be the only service of its size consuming the least (hosting) resources.

So I guess investors do not see the value in profits rather in popularity when it comes to crazy start-ups. Considering Instagram which got acquired for the ‘notorious’ 1 Billion. If we use the same mathematical formula, I guess imgur is worth at least 2x of Instagram.

bane6• 12 years ago

Which really make one question the valuations that are out there. If reddit isn't at least a billion dollar company by this measure I don't know what is... Yet they continue to struggle to make operating expenses.

cloudwalking• 12 years ago

Run rate and valuation are not always directly tied. In all of these cases--Twitter, Instagram, Imgur, Reddit, 9GAG--it's about the community.

Reddit may certainly be worth $1B+, but no acquirer wants to buy them and lose money keeping the site up.

notastartup• 12 years ago

where is Andreesen's email? I want to ask him if he wants to invest in my startup.

jscheel3• 12 years ago

I'm really interested in this deal. It's always been a bit of an enigma to me how imgur makes money, especially since they have been bootstrapping. I wonder if the numbers looked good to a16z, or if they saw the incredible growth potential of having a large interest in the youtube of images (as frade33 characterized it).

rgbrgb3• 12 years ago

They make money by showing ads that get millions of views per day and most likely selling information about their users.

jscheel3• 12 years ago

Well, duh ;) I'm just impressed, given the significant bandwidth, that the advertising has been capable of sustaining itself so far.

michaelmcmillan• 12 years ago

I'm looking forward to see what they come up with, the first thought that hits me is "how are they going to make money?". Reddit is clearly not profitable, how do they differentiate from a business perspective?

nols• 12 years ago

Imgur has been profitable since the beginning[1]. There are massive differences business and infrastructure-wise between Reddit and Imgur. Imgur has much better ad/pageview ratio than Reddit and is much less dynamic and infrastructure heavy.

1 http://www.neowin.net/news/from-rags-to-riches-the-story-of-...

_zen• 12 years ago

imgur should shoot big and host videos. Let people upload videos without an account, just like images. Fuck YouTube and its toxic comments. imgur's comment system and quality of comments are way better.

binaryjohn• 12 years ago

I believe that is the thinking behind vidd.me

xpop2027• 12 years ago

I didn't even think of this possible vertical for imgur.. great observation.

svas• 12 years ago

If imgur approaches Youtube's scale won't the comments on imgur also become toxic?

This still appears to be an unsolved issue (although, one could argue whether it is really an "issue"). Google's G+ approach (barring anonymous comments, etc) does not appear to have addressed the core concern.

scrollaway• 12 years ago

The site Sir_Cmpn linked above (https://mediacru.sh) apparently allows video uploads.

perlpimp• 12 years ago

i have been getting tired of all interface complications on youtube, I think this would be a welcome place for interesting and funny videos - old you tube style. number of things I have too look at and click to get to my channels is slowly growing which is pita.

Although I tried using imgur a few times, I could not upload images a number of times, subjectively I don't know how they get that much money for such service... bubble is it?

cmelbye• 12 years ago

Transcoding videos is very, very expensive.

werid• 12 years ago

These days, I goto imgur frontpage to view the gallery, viewing the daily "funnies" is not done via reddit anymore.

My reddit usage is more directly into specific communities, less of the general sub-reddits.

korzun6• 12 years ago

I build image hosting service which was 'great' for it's time (2006) called Image Socket (http://www.imagesocket.com).

It became extremely successful in just a few days due to support from another (popular at the time) web site called SomethingAwful.

Alternatives at the time sucked. Unfortunately I failed to pivot it into something that does not rely exclusively on one or two popular web sites as it's source of traffic.

Congrats to Imgur for jumping on Reddit early and a becoming somewhat independent at this point.

It's funny that I had an opportunity to compete with them because my site was already build and widely utilized when Reddit came out but I never imaged that Reddit would blow up so fast and by the time it did, competing with Imgur was impossible.

sargun• 12 years ago

My guess is that they're probably going to spend some time building their own CDN / image storage. I think they used some combination of dedicated servers, RDBMS, CloudFlare, and AWS.

They could save some significant operating costs, without sacrificing a lot of of customer happiness by putting together their own datacenter, and hosting a handful of edge sites (a rack or two, and then fast failover out of the rack). I imagine that the traffic curve on images drops off pretty quickly after a point, and stays down.

ztratar• 12 years ago

With their traffic, AWS is not cost effective in the least.

stevekemp• 12 years ago

With their traffic I'm sure they haggled a better deal than the default AWS prices..

stickydink• 12 years ago

I walk past Imgur's office reasonably often. There's a slightly crumpled-up, inkjet-printed piece of paper with their logo on it, taped to the glass of the front door.

Makes me chuckle every time, I hope they don't blow any of this on a fancy door sign.

allsystemsgo• 12 years ago

maybe they'll get a frame for it.

Imgur Raises $40M From Andreessen Horowitz

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