It's awful. Which means it will likely do very well. They can be completely unchained when it comes to mixing advertising with content. The 50M investment is starting to make more sense. Reddit will fuel an ugly beast.
It makes a lot of business sense - just add (con)text to content from Reddit, a more accessible site than Reddit, it's way more advertisable, VC money can have a good place and they can beat Buzzfeed et al. at their own game. The one thing that does bug me is that this is implicitly admitting that Reddit will not be fixed in any meaningful way. "Oh, we got a bajillion dollars in funding? Let's put it into something entirely new instead of making our current thing better!" If this fails miserably for some reason, I think Reddit's days might be counted.