Partially, but they haven't given up on Steemit.
Tech companies aim for incremental improvement, but at some point they may have to pivot. In this case they are doing both, hoping they end up with multiple revenue streams.
If they add Communities (Hivemind) and Steemit takes off and replaces Reddit, great, they might have a business model there.
But based on experience so far, they can't rely on that happening. Steemit has a bad reputation because of low quality user-generated content.
They realize that the same underlying blockchain could be useful in lots of other contexts and applications, beyond what they can imagine, maybe with a few tweaks.
So my understanding is that with Smart Media Tokens they are able to provide ICOs as a service. That might be just for fundraising, which is its own thing, but they can also point to Steemit, DTube, and DLive as proofs of concept for what publishers and content creators can do with tokenized content, especially with the addition of Oracles to provide a form of moderation.
I think the lesson is, bet on the blockchain, not on the application.
