Gawker owner Nick Denton claims iPhone scoop actually cost them money

Sat, Apr 24, 2010


We’re almost running out of ways to say it, but here goes – Gizmodo’s iPhone 4G story will go down as one of the biggest gadget scoops in the annals of tech history. The story did gangbusters for Gizmodo, easily quadrupling their daily traffic from 5 million pageviews to upwards of 20 million. Ethical considerations aside, most people assume that surge in traffic and attention directed at Gizmodo has the Gawker network raking in the dough hand over first.

But according to Gawker Media owner Nick Denton, that’s not exactly the case. According to Denton, Gawker is not only not making any money off their scoop, but is actually losing money.

“There were no immediate revenue benefits whatsoever,” Denton said, “in fact, only costs.” Denton explained that Gawker paid an extra $7,000 in bandwidth costs to support the onslaught in traffic, and that Gawker will dole out presumably substantial traffic bonuses to a number of Giz writers who saw a number of their iPhone 4G related stories generate an insane amount of pageviews. Also a factor, Denton says, is “whatever legal bills we end up paying.” And oh yeah, you might want to factor in the actual cost of purchasing the iPhone 4G in the first place – 5 grand.

Denton, though, is being a bit coy in his analysis. While Gizmodo undoubtedly incurred some short term costs, their scoop was an investment that will pay off with all the extra attention and traffic Gizmodo can expect to receive going in the weeks and months to come.¬†You can’t put a price on global publicity, and Giz’s iPhone scoop catapulted their site into every major newspaper and news program across the world. You simply can’t buy that kind of publicity.

Short term costs? No doubt. Long term gain? You better believe it. Otherwise, there’s no way a man as savvy as Denton would have purchased the iPhone in the first place.

via Daily Finance


4 Comments For This Post

  1. Matthew Frederick Says:

    He may well be trying to protect himself legally from the idea that Gawker profited from the find/theft, which could well get them into even more trouble.

  2. skips Says:

    If I understand the situation correctly, the question as to whether Gizmodo made any money is strictly a civil issue. The criminal law visa a vie trafficing in stolen goods only considers the value of the goods. In this case, since prototypes are not sold, the only value that can be assigned is what Gizmodo claims to have paid.

    Somehow I do not see Apple pursuing a civil case when there is a criminal case being investigated. Apple might be able to derail the criminal investigation by refusing to cooperate with the investigators, but the is very little they can do to force the case to proceed. The decision to bring the case to trial rests with the district or states attorney. Although, they might employ a grand jury to assist the in making the decision.

  3. AlfieJr Says:

    he better add another 100k for his criminal defense.

  4. Joe Says:

    More like $250 K for criminal defense and another $100 K for defending himself in Apple’s civil suit.

    Sorry, I don’t have any sympathy for criminals. I hope Apple shuts them down – and jail time would be fair, as well.

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