About ten days ago, gossip blog Gawker and its sister sites Gizmodo, Lifehacker and others switched over to a drastic redesign which was met with plenty of jeers. People always complain about design changes, but this time it looks like several of Gawker’s sites actually took a major hit to traffic.

According to Quantcast, which directly measures the sites, Gawker’s U.S. daily unique visitors were cut in half from a high of 561,000 to 257,000 (see chart above). Gizmodo dropped from 746,000 to 420,000 in the U.S. Sitemeter shows an even more harrowing freefall for Gizmodo (see chart at right). Jezebel and Deadspin also took hits. Only Lifehacker seems to be holding steady.

The new design (bottom screenshot) features one top story in the main column, with a few other featured stories below, and more headlines in a thinner column along the side. But it is a bit disorienting because when you scroll down, the righthand headline column doesn’t move, only only the main column does. And sometimes there is only one big full featured post on the homepage, as is the case right now with Gizmodo and a story about Steve Jobs demolished mansion in Woodside, CA.

You can revert to a traditional blog view, but the default is the “top story” view. Most people will probably never figure out how to toggle back to the comforts of the classic reverse-chron design, so they leave instead in frustration. Tweets about the redesign are more negative than positive. Some typical ones:

I never thought a web design could instill so much malice into me but the @gawker redesign just makes me want to RAGE!—
Ian (@pjfry) February 18, 2011

@davidgustav The Gawker redesign is tragic. I just figured out last night where/what the "tags" are. And I do this stuff for a living!—
Liberation (@liberationnyc) February 17, 2011

@lampbane The Gawker redesign is so crappy that I've gone from daily repeat visits to not visiting any of their sites at all.—
Edgar Governo (@pseudohistorian) February 15, 2011

Ah well, maybe they’ll come around. There is one silver lining, however. For those people who do stick around, pageviews seem to be bouncing back to the pre-redesign levels. As long as Gawker doesn’t drive way all of its readers, it should be fine.

In the modern media equivalent of a Greek myth, the Gawker empire was hit hard over the weekend when it was revealed that a hacker group had infiltrated its commenter database via a vulnerability in its source code, exposing the user names and encrypted passwords for over 1.3 million commenters. To further drive the moral of this story home, the group, which goes by the name Gnosis, pulled a dictionary attack and unencrypted about 188K of the easiest ones like “password” or “qwerty” releasing the whole database and source code package in a torrent on Pirate Bay.

Apparently the Gawker data breach was no secret on the Internet (reports had been circulating for about a month) and people offered Gnosis money for the Gawker database before the release. According to a Gnosis representative who gave details to TechCrunch, the group received several offers all in the vicinity of 2K, mostly from spammers and re-salers, “certainly not for good.”

Already Internet nogoodniks are taking advantage of the exploit. A hack-related Twitter attack on Sunday forced users to tweet about the Acai berry diet. TechCrunch Senior Editor Erick Shoenfeld fell prey to what looks like the second iteration of the Acai attack this morning. The New York Post reports that one woman had her entire life “turned upside down“ when her social media accounts were taken over and used to post anti-Semitic messages. Behemoths LinkedIn, Yahoo and World Of Warcraft have all taken measures to protect against further attacks.

Because many people use the same password across multiple sites, this spammer’s delight is going to get worse before it gets better. Especially if the attacks spread from social media to financial services. It’s time to get an entirely new password if you’ve ever commented on Gawker, for everything, even if your password (like both of mine) is still encrypted in the full_db.txt file. You can check if your information has been exposed here.

Damnit. Can't remember all my new passwords.—
Peter Kafka (@pkafka) December 14, 2010

When asked why they didn’t accept any of the offers, our Gnosis source replied, “We didn’t sell because we thought that would be too far. It’s one thing finding out that your database was leaked, and its another to find out that it was sold. We are not heartless, we know the implications for selling it, even though a minority of the group wanted to sell it.”

While the Gnosis representative admitted that there are lot of interesting things that can be done with a hacked database, the more serious issue here is the public availability of the PHP source code which leaves open the possibility of further exploits, “Just say if Gawker recovers fully, and all is well, six months down the line some Eastern European hackers jump in and do the whole thing again, because they had access to the source and found a way to exploit it.”

In a comment explaining the breach Gawker founder Nick Denton, who reportedly has a meeting with the FBI today, hinted at hiring an independent security firm to improve security. Not enough says the Gnosis rep, who holds that all the sites’ API keys and cookies are in still in the source code and that while difficult, those with nefarious intent can still impersonate Gawker users, “I would bite the bullet and release all the source code if I were them officially, and go ‘open source.’”

Denton, who is in the unenviable position of being the busiest person in the world at the moment, did not reply to my questions about the measures being taken to further protect users and the ethical implications of such a large breach. He only responded with this link to show that Gawker site traffic hadn’t fallen since the release, when asked about that in an addendum to my first email.

Update: The Wall Street Journal reports that Gawker has reached an agreement with investigators. Chen’s materials will be returned, and Gawker/Chen will be voluntarily handing over materials deemed “relevant to the case” by a court appointee.

The seizure of these possessions was quite controversial — the EFF said it was illegal and should have been protected by California’s Shield Law. When I called the District Attorney about the case in April, I was told that the investigation was on hold as these issues were considered, and that Chen’s property was sitting in a warehouse untouched. It’s apparently been sitting there for months. At the time, I noted how bizarre the series of events were:

When I asked if it was typical for the DA to evaluate the relevance of these shield laws after removing evidence, Wagstaffe did concede that it was unusual. Which makes the situation extremely od d— it should have been readily apparent that Gawker would defend its actions using this shield law defense, why put the brakes on after the fact?

However, this doesn’t necessarily mean that Chen is in the clear. The EFF says that police could “attempt to subpoena the same material without running afoul of section 1524(g) and still proceed with their case.”

Document via EFF

We’ve had our fair share of outages around here, but we’re not nearly as big as the Gawker blogging empire is, so it’s worth noting that every site in the Gawker Media blog network is currently down and out.

From Gizmodo to Gawker.com, Kotaku, Jezebel and Lifehacker, every visitor to the sites operated by the new media company is being served a dry message that reads ‘Http/1.1 Service Unavailable’.

I’ve been checking out some of the Twitter feeds of said blogs, as well as that of founder Nick Denton (whose personal blog is also down), but it appears they’re either not yet aware of the issue – rather unlikely – or too busy getting things back up again to let their respective audiences know what’s up (or down, rather).

Update: and they’re all back – Gawker tech is holding the servers differently now

I’m not sure just how big Gawker Media is, but in terms of reach, it’s very big. The last report I can find on its traffic numbers date back to November 2009, when Denton said the company’s network was at nearly 400 million pageviews a month, with not a single blog getting under 20 million pageviews per month.

That’s exactly what happened last night, when Gawker writer Ryan Tate got irritated by an Apple ad describing the iPad as “a revolution” and shot off an email to Steve Jobs. Three hours later, at nearly 1AM, Jobs replied, and a passionate email debate ensued. The email exchange is mainly focused on Apple’s stranglehold on the iPhone OS platform, and its decision to force developers to build applications using Apple’s tools.

Tate is clearly agitated throughout the exchange (in his blog post he notes a few things he regrets writing in his email responses). For the most part Jobs seems to be level-headed, though he does take a jab at Tate at the end. Through it all, though, one thing is clear: Jobs is on a mission to reinvent computing. He’s well aware of the controversies, and for better or for worse, it sounds like he genuinely believes that what Apple is doing will lead to a better future.

You can read the entire exchange on Gawker here, but here are a few interesting responses from Jobs:

Tate:

If Dylan was 20 today, how would he feel about your company?

Would he think the iPad had the faintest thing to do with “revolution?”

Revolutions are about freedom.

Jobs:

Yep, freedom from programs that steal your private data. Freedom from programs that trash your battery. Freedom from porn. Yep, freedom. The times they are a changin’, and some traditional PC folks feel like their world is slipping away. It is.

Here’s a later back-and-forth (note the jab Jobs takes at Tate at the end):

Tate:

Was it a “technical issue” when Microsoft was trying to make everyone write to the Win32 API? Were you happy when Adobe went along with that?

You have the chance to set the tone for a new platform. For the new phone and tablet platform. The platform of the future! I am disappointed to see it’s the same old revenge power bullshit.
…
PS And yes I may sound bitter. Because I don’t think it’s a technical issue at all — it’s you imposing your morality; about porn, about ‘trade secrets’, about technical purity in the most bizarre sense. Apple itself has used translation layers and intermediate APIs. Objective C and iTunes for Windows are testament to this. Anyone who has spent any time coding knows the power and importance of intermediate APIs.

And I don’t like Apple’s pet police force literally kicking in my co-workers’ doors. But I suppose the courts will have the last say on that, I can’t say I’m worried.”

Jobs:

You are so misinformed. No one kicked in any doors. You’re believing a lot of erroneous blogger reports.

Microsoft had (has) every right to enforce whatever rules for their platform they want. If people don’t like it, they can write for another platform, which some did. Or they can buy another platform, which some did.

As for us, we’re just doing what we can to try and make (and preserve) the user experience we envision. You can disagree with us, but our motives are pure.

By the way, what have you done that’s so great? Do you create anything, or just criticize others work and belittle their motivations?

Stop me if you’ve heard this one before: a guy walks into a bar. No, a guy walks into a bar with an iPhone. No, a guy walks into a bar with a next-generation iPhone disguised as a current-generation iPhone. No, a guy walks into a bar with his next-generation iPhone disguised as a current-generation iPhone and leaves it there. Okay, we’ve never heard anything like this before.

Yes, it appears that the next hardware iteration of the iPhone (two common monikers are ‘iPhone 4G’ or the ‘iPhone HD’) has been outed. And while the apparent specs are sexy (higher rez screen, front-facing camera, bigger battery, etc), the story behind the leaked device seems even more interesting.

The Pictures

This weekend, Engadget ran pictures of the device, stating that they were taken by someone who found it on the floor of a San Jose bar (!). The pictures were a little blurry and didn’t show the device running, so naturally, many were skeptical. In fact, shortly after Engadget’s post, a number of sites, including MacRumors, were reporting that the images were actually of a cheap Asian knock-off of the iPhone.

Engadget came back with another post supposedly proving the device was real (noting the same device appeared to be in an early leaked picture of the iPad). Then Daring Fireball’s John Gruber talked to some of his sources and concluded that the device was, in fact, real (but wasn’t sure if it was a prototype unit or the real deal). MacRumors then came back and reported that the story about it being an Asian knock-off was itself fake.

Then things got really interesting.

The Hands-On

In Engadget’s initial post, they noted that the author of the pictures was offering to sell some hands-on time with the device for an unstated fee. For some unknown reason (perhaps so as not to tip off rivals), Engadget quickly removed this part from the post. But it didn’t matter, because it appears that rival gadget blog, Gizmodo, jumped on the opportunity to pay for access to the device. Only they didn’t just pay for face-time, they bought the whole thing.

After playing around with it for a few days, this morning, Gizmodo ran a full review of the device including several pictures and videos. Judging from this review, which includes a look inside the device, it does appear that this thing is very real.

The Skepticism

Still, that isn’t stopping others from continuing to claim that the hardware is fake. (They apparently believe that the insides of an iPhone 3G were simply ripped out and stuffed into this Asian rip-off case — a claim that seems highly unlikely, at best – and ludicrous, at worst.)

Others are suggesting this was a controlled leak by Apple. This also seems highly unlikely. It is believed that Apple does leak out information from time to time — notably to the Wall Street Journal — but it’s never hardware. Pulling a Nine Inch Nails and leaking USB drives with new songs in concert venue bathrooms is simply not the Apple way of doing things. They’re more subtle, and let journalists draw their own (sometimes wrong) conclusions.

The Legality

There are still a few oddities to all of this. First, assuming this is real, it is definitely the most high-profile leak of all time out of the super-secretive Apple. Hell, it may be the most high-profile hardware leak of all time from any company. If there has ever been anything that will draw the wrath of Apple’s legal team, this would seem to be it. And yet, if Gizmodo (or its parent, Gawker) have gotten a take-down notice, they haven’t let it be known yet.

It’s possible, and likely even probable, that Apple is taking this as something worthy of action much more serious than the fairly common takedown notices the company sends from time to time. As Gruber noted earlier today, according to his sources, Apple considers this device to be not lost, but stolen.

The Money

And that angle comes into play when you consider that Gawker did, in fact, pay for the device.

Also interesting is a tweet from Engadget writer (and former attorney) Nilay Patel, “Here’s an interesting fact: in California, the finder of a lost item is required to tell the police and turn it over to rightful owner.” It’s not clear if that’s why Engadget did not purchase the device after posting the pictures.

The price paid for the device is not known, though a $10,000 figure is being thrown around (others are saying $5,000 plus traffic bonuses). As you might imagine, the traffic for Gizmodo have been huge today, something above 3 million hits already. Some have tried to calculate out if this makes the $10,000 worth it (based on ad revenues). But, as Gawker’s Erin Pettigrew points out, “Ad demand only matches ad supply that way if using remnant networks/exchanges. We’re not, so no real rev gain in news spikes.”

The Power

Then there’s the whole issue of Gizmodo not being able to power on the device, despite having it. While it is possible to remote wipe iPhones, this wouldn’t completely kill the device, just remove all its data. But perhaps Apple built a special kill functionality into this prototype unit for situations exactly like this. The device does show a “Connect to iTunes” screen (which is how Gizmodo is able to judge the higher-resolution screen), but that is all.

The Pledge

Finally, you have to wonder how the hell Apple let someone out of the building with this device? Apple is known to lock employees in rooms (entered through several secure doors) in order to use new devices. It’s even believed that sometimes they make people working on the devices do so under black cloaks. Naturally, the people in these rooms are monitored at all times.

The Turn

So if someone left Apple with this product, you almost have to believe it was a high-level executive. But still, what on Earth are they doing bringing it to a bar? (Maybe one of their kids swiped it from home? Who knows.) Yes, Apple employees were spotted in the wild with the original iPhone before its launch, but that device had already been unveiled on stage by Steve Jobs months earlier. This is much, much different.

The Prestige

On the other hand, you almost have to believe that this device was meant to leave 1 Infinite Loop — that’s why it had the false iPhone 3G cover. Apple may have given a few of these devices out to trusted employees in this disguise to test in real-world situations. After all, if this thing does have a new type of back (glass, ceramic?), they’ll want to know how the wireless radio performs before it’s released to the public.

Yes, even in bars. (Let me make the first “more bars in more bars” joke.)

Update: Gizmodo has now outed the Apple employee who lost the phone. He’s apparently a software engineer working on iPhone baseband software (so you can actually make calls when AT&T is cooperating), and supposedly he left the phone at a bar in Redwood City on March 18. The fact that the phone is that old makes an earlier TwitPic leak make more sense, and means the device could very well be an early prototype that will change.

The Unprecedented

Often, the best tech stories have interesting backstories — and this certainly fits the bill. We’re likely two months away from the actual unveiling of the iPhone HD (we’ll go with that name for now, given the screen resolution), and yet, we’ve apparently already seen it. With Apple, given the lengths they go to to make sure something like this doesn’t happen, it’s unprecedented.

And while I’m sure Apple is beyond pissed off about this leak, it has the Apple base super-excited about the future today — even as the apparently best Android phone yet, the Droid Incredible, is set to launch. All anyone is talking about is the iPhone. As usual.

Of course, this means that when Steve Jobs takes the stage in June, he may actually need a “one more thing” moment. Without it, we may be bored by a presentation full of what we already know.

Update: And finally, here’s a note from Apple’s legal team requesting the device back. Gizmodo’s Brian Lam says he took a call from Apple today (no word on whether it was Jobs himself) and that he would give the phone back if Apple sent proof in writing that it was actually their equipment. They sent the note, now Gizmodo is giving it back. Thus ends the iPhone 4G saga. For now.

Thomas, who was previously an editor with Business 2.0, was brought in to run Valleywag in June 2007, replacing the head of Gawker Media, Nick Denton. Denton’s run as the editor of Valleywag came only after he fired Nick Douglas from the same job.

We hear Thomas is going to work for NBC on some kind of site which may or may not be centered around the Valley as well. [Update below, Denton has confirmed Owen's NBC gig.]

We’ve just contacted Thomas who declined to comment at this time.

Update: Gabriel Synder, the editor of Gawker, has confirmed the news and had this to say:

While I’m sorry to see Owen leave, I’m still committed to keeping Valleywag going as Gawker’s tech column.

Snyder continued that while he couldn’t say who will be brought in to replace Thomas, there will be a new editor of Valleywag and the site will definitely not be shuttered.

“Owen’s been great through this entire transition and has set the template for how coverage of the tech beat can fit into Gawker,” Snyder went on to say.

Update 2: Here’s Gawker founder Nick Denton on the move:

Owen has a reputation as a fearsome gossip writer. What’s less known is his penchant for management. It sounds like this NBC job will give him the responsibility he’s been craving — and take him out of the Valleywag firing line! We’re replacing him internally. More on that later.

NBC may be building out a bunch of local sites, Denton says, which Thomas would be a part of.

Denton went on to say that Gawker’s Q1 revenue numbers have been strong, up 27% from the year ago period. Of Valleywag specifically, he would only say that it’s sold under Gawker.com, so it’s not separated out for things like ad sales anymore, apparently. Gawker is down from 15 to 9 sites now after it shed a bunch last year, but he says the majority of the revenue came from those 9 sites anyway. He adds that they’ve been growing, even during the downturn.

Update 3: Gawker has just confirmed that the new editor of Valleywag will be Ryan Tate (pictured, right). Tate had been serving as Gawker’s night editor, as well as contributing some of his work to Valleywag. Gawker is now seeking a night editor to replace him.

Update 4: Beet.TV’s Andy Plesser has the story on Thomas’ new gig. Apparently, he’ll be the managing editor of NBC Bay Area, a news site focused just on the Bay Area that is in beta right now. As Plesser notes, this will make Thomas an employee of GE (which owns NBC).

[Owen Thomas photograph by Benjamin Tice Smith]

Nick suggests that the partnership just sort of petered out. But he also says that Nick Douglas’s regular attacks at Valleywag (a Gawker blog) on Lloyd Braun, head of Yahoo Media, didn’t help matters much. I imagine he might be right.

In addition to their recent deal to promote their content within Yahoo, Gawker today announced the launch of its newest blog, The Consumerist, a humorous slant on today’s consumptive world:

“We here at Gawker Media love to spend our money, but we hate being treated like cattle while we do it. And so our big happy family is proud to announce the birth of our latest site: Consumerist, our answer to the utter fuckitude of modern capitalism.”

Edited by Joel Johnson, who formerly wrote Gizmodo, The Consumerist is off to a strong start with posts such as “Gay Wallet Follies” and “Lenovo’s Free Thinkpad Battery Bait and Switch“.

The Consumerist has a full, ad supported feed and a partial, no ads feed.

The financial terms are undisclosed, but here’s what is now on Yahoo: Gawker brands and content are pushed throughout the news home page. Clicking on associated content pulls up a Yahoo page with the Gawker content (example). It does NOT redirect to Gawker.

There is a single link to Gawker on the content page (clicking on the brand name). Otherwise, it’s an all-Yahoo experience. If I was doing the deal, I’d expect a revenue split in Yahoo’s favor on ad revenue generated from the page. Gawker gets that revenue, the branding, and some links directly to the blog. This is purely speculation, but my best guess.

Is this an important deal? Yes, in that it shows Yahoo embracing blog content. The guy at Yahoo to get to know is clearly Scott Moore, named by Wired in their last print edition as VP Content Operations. Scott is hiring bloggers (such as Kevin Sites) and doing these kinds of deals with Gawker. These are smart deals for Yahoo – they generate page views where they can put lots of ads. If the deals are revenue share, then it’s a no lose proposition for Yahoo.

But what Yahoo is noticeably not doing is acquiring Gawker, like AOL did with Weblogs, Inc. That means liquidity events for bloggers are limited – the GYMs (Google-Yahoo-Microsoft) are not yet in content buying moods.

So perhaps the networks and very large blogs can cut deals to increase page views on content and generate revenue. Will this model work for the long or medium tail of blog content? My guess is no…the GYMs will want to control quality and that doesn’t scale with more than a small number of blogs. But certainly we’ll see more deals like this, particularly as long as the advertising market is strong and demand for inventory is outstripping supply. The portals need content, and this is a cheap way to get it.

A lot of people are focusing on the fact that the deal is incorporating blog content directly into Yahoo news results. While I find this interesting, we’ve already seen Yahoo experiment with this with their blog search product. Clearly Yahoo is defining the definition of news to include blogs (as they should), and I applaud this.

But back to the title of this post. Is it an interesting deal? Yes, but mostly because of what the deal isn’t – it isn’t an aquisition of Gawker.

Read more analysis of the deal at Read/Write Web, Paid Content and Memeorandum.