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Let's hope they use some of it to fix the mobile app (fatally broken on my 5s 7.1) and their mobile web experience (a catastrophe of hanging AJAX and appalling UX.)

Oh and hiring some moderators to control the flood of soft porn in user-sub would be nice.

(Although it does worry me - people taking money and board members from A16Z do seem to get acquired by the biggies rather more often than I'd like.)

I wonder if user-sub is already moderated and they actually allow the 'soft porn' through? At least, there's quite a bit of hardcore pornography hosted on imgur but I don't see any on a browse through user-sub right now.
Very impressive to have bootstrapped this far, I'd imagine their hosting costs are fairly immense. Hopefully this doesn't affect their core value-proposition (simple image upload).

It's interesting that Reddit also made a modest investment. As Imgur's community has grown, I'd imagine that they're increasingly battling for the same audience as Reddit.

About Reddit and Imgur - I think they share a more synergistic relationship. A lot of imgur links make up the content on reddit, and by funding them, they ensure a better experience for their visitors. Meaning more ad revenue for reddit - makes sense to me.
imgur has had voting, comments and it's own little community for a while now. It could cannibalize the image macro based subreddits (like /r/pics /r/funny) which drive so much traffic to reddit.

imgur is also not getting as much money as it could from reddit because links are posted directly to content bypassing the ads.

I wonder how much longer the synergistic relationship will continue to exist.

If Reddit banned imgur, that would be very bad for it. They banned Quickmeme, which decimated its traffic.
Quickmeme was banned because they were manipulating the voting system. I don't think imgur would or needs to do that.
Not super knowledgeable about image hosting or ad revenues. If you have a super populate photo, would the ads on that page pay enough for the hosting? If that is true, repeat by a million and Imgur has a great business. If not, seems like it will be difficult.
Most people that use Imgur share the direct link to the image. When the direct link is used no ads are displayed.
It's a wise choice - the comments are often terrifying.
In design or quality?

I commented on an image I posted once. I was horrified to find that you had to individually expand each child comment. Doesn't allow for much discussion.

Quality. It's often "sketchy at best".

As for design, there's "Expand All" up the top right of the comments. But yes, the "hidden by default" arrangement is a bit nuts.

There’s an ‘Expand all comments’ link. Personally I find the community there to be a nice complement to HN. Less serious, less important issues, more usable when tired.
I find it just as surprising that HN doesn't allow you to collapse a comment chain. I use a GreaseMonkey script to do it on my desktop, but when browsing from a mobile device I have to scroll down until I can find the next root comment.
Unless you access the "direct" link via Facebook or Twitter. In which case you are redirected to the standard page
Going way back on Reddit, I remember MrGrim modestly posting that he had created an image host just for Reddit, imgur.com. It's pretty wild to see him and imgur have come this far.

EDIT: Here it is--5 years ago. Great job MrGrim. http://www.reddit.com/r/reddit.com/comments/7zlyd/my_gift_to...

EDIT2: Nevermind, I was beaten. :)

Crazy to think that all it would have taken is a few redditors to downvote that post and it would have been hidden and never seen.

Right place, right time perhaps.

I'm glad it worked out for Alan. When I post to Reddit about things I've built, I just get downvoted. hah
good stuff that they're hanging on but still pretty big mystery how this sustains.... there was optimistic talk/posts about how the community on imgur itself has grown and become sort of its own thing but of course the synergy with reddit is undeniable. Ad revenue while allowing all that direct linking is highly suspect IMO. Reddit enjoys huge dominance but lest we all forget it was all but headed for dead before Digg's big slip up. Surprised they have funds to throw at imgur but I guess it's a mutual interest thing.