It was rumored that Reddit was out raising money now, but looks like they have been snapped up by Conde Nast. Conde Nast are the same folks that own Wired (online version).

Reddit is a much smaller player than Digg, but has a loyal fan base. It was also speculated that Reddit is gross margin positive, which means profitable, but not paying salaries.

http://reddit.com/info/9f4r/comments

There is little to no visibile advertising on Reddit, but if you look at lipstick.com you can tell they have licensed the software. Perhaps more licensing deals are in the future.