[harryh]

They aren't giving credits to YC companies out of charity. They're doing it because they (probably correctly) think that the gains from this marketing spend will be outweighed by future profits.

So you aren't subsidizing anyone.

[nitrogen]

Technically, all advertising and promotion is subsidized by the paying customers of the company. So increased promotional expenses still result in increased prices for customers, or reduced margin for the company (excepting an influx of customers that allows significant cost reduction due to scale).

But that's not always a bad thing.