SAN FRANCISCO — It's more than a rumor: The great Silicon Valley gossip-rag experiment has come to a humbling conclusion.
Nearly three years after launching Valleywag, blog magnate Nick Denton has decided to fold the site into Gawker, which covers the media business. For the last month, Denton has been saying to anyone who will listen that online advertising is undergoing a sharp slowdown as the economy continues to tank and Web publishers are going to get nailed.
After recently paring the Valleywag staff down to two, Denton is now keeping only one -- Editor Owen Thomas -- who will write as many as a dozen daily posts about Silicon Valley gossip as a Gawker columnist.
"Valleywag's traffic isn't enough to pay for two writers, even with Ketel One ads on every page," writer and odd man out Paul Boutin wrote in a post explaining the move. Boutin's last day is Dec. 1.
The Valley can be a very serious place, full of self-importance and the I'm-gonna-change-the-world attitude that says you can be entrusted with millions to show that you can do better Web searches or chip design than anyone else.
Valleywag went after that attitude, needling start-ups, venture capitalists, journalists and high-tech giants it thought needed to be knocked down a peg. It dug up dirt, pushed rumors, scooped the traditional media on many occasions (it also got things wrong) and relentlessly harangued the new-media elite, including uber-bloggers Michael Arrington, Jason Calacanis and Robert Scoble.
In other words, for a certain crowd, Valleywag was a must-read. Yet that didn't mean it was self-sustaining.
Denton launched the site as part of his Gawker Media empire in early 2006 when the Web 2.0 movement was in full swing. Young Nick Douglas was installed as its lead writer (he was later canned and replaced by Thomas).
But many wondered at the time whether Silicon Valley was worthy of the Hollywood treatment.
It's tough trying to take techsters down a peg when they're already as low as they've been in years. Venture capital funding is scarce. Hiring freezes and layoffs are everywhere. Tech giants have seen their stocks take huge haircuts in the last year, diminishing the companies' clout as the broader financial crisis powers on.
So it's looking more as if Denton was right when he started calling a blog-ad bust and cutting staff last month -- much as the old media has been doing for the last few years.