Gizmodo Lost Money on Pricey iPhone Scoop

Nick Denton, the big cheese at Gawker Media, paid $5,000 for the iPhone prototype Gizmodo showed the world last week—a fact notably absent from the company's published account of how it acquired the phone. He got 3.6 million unique visitors for his trouble, but no massive ad-revenue bump (Gizmodo's ads are sold in advance), so by the time he finished paying legal fees, bonuses to his writers, and the additional bandwidth cost, the scoop actually cost him $20,000, he tells David Carr of the New York Times .

Of course, Denton thinks it was all worth it—Gawker is obsessed with traffic—and he pooh-poohs anyone who criticizes the ethics of his checkbook journalism. “If a news organization is open about its methods, what's the criticism?” he says. Other news organizations are too “preoccupied with respectability—and they contort themselves.” But Carr's not sure Denton's ruthless pursuit of eyeballs is a good thing. “Ratings helped make television a dominant ad medium,” he notes, “but probably made it a lot dumber.” (More Gawker stories.)