But where are the violins?
Blog network Gawker Media, the parent company of flagship celebrity gossip site Gawker, is cutting down staff and revising payment options for existing bloggers, according to an open letter from founder/owner Nick Denton.
19 editorial positions out of 133 will be cut, and pageview bonuses will be suspended "for the first quarter at least" in 2009.
Pay will be raised to compensate for loss of bonus income. "If you haven't recently agreed to a new rate, your monthly base amount will automatically be increased by five percent in January," Denton said.
Moving forward, the company will prioritize top destinations Gawker, Gizmodo, Kotaku and Lifehacker, and growing properties like Jezebel, Jalopnick, Deadspin and io9.
In April, Denton sold Wonkette, Idolator and Gridskipper, which generated less than one million impressions per month. Financial details weren't revealed, but Alley Insider deduced [Denton was] more or less giving the sites away."
The Gawker Media founder attributed the company's troubles to the recession:
Our biggest clients are consumer electronics and entertainment companies that are relatively well insulated […] but now the credit crisis is clearly going to affect every sector of the economy.
Advertising buys typically plunge after the Christmas shopping season, and 2009 is obviously going to be exceptionally difficult. We have to prepare for the worst, now, rather than when the worst comes upon us.
He hastened to add that the company remains profitable. Ad sales are reportedly "up by about 30 percent on their level of a year ago." (Because the company is privately-held, it is not obligated to release more detailed figures to the public.)
Denton also blamed his own lack of foresight. "My belief was that juicy news would draw the readers and the advertising would take care of itself," he reflected. But in this harsh clime, "sites […] whose success has been measured more in traffic and recognition than in revenue […] now need to cover their costs."
Gabriel Snyder, formerly of W Magazine, will replace Denton as managing editor of Gawker.com. More reporters will be hired for Jezebel, Deadspin, Kotaku and io9, a sci-fi site that launched in January.
In a final lament, Denton concludes, "The golden age of the blog is over, people will say. […] The one consolation is that there will be plenty of news for us to break — starting with this email, which you are free to leak."
The founder laid off several bloggers and put 15 of his sites on the auction block in 2006, despite claims that pageviews doubled that year. "Better to sober up now, before the end of the party," he said then.