ASCAP licenses the performance rights for music, collecting royalties for its songwriter members when their songs are played in certain contexts.

Those contexts now include a YouTube video embedded on your blog or website, assuming your site is not "purely" non-commercial and is deemed large enough by ASCAP. The group just sent a collection letter to internet entrepreneur Jason Calacanis (pictured) for YouTube videos embedded on his Mahalo reference site. Based on what the group told Valleywag, other startups should be worried:

ASCAP does not offer licenses to – or require licenses from – those who simply make their personal blogs available on purely noncommercial Web sites. Mahalo.com is a larger venture than simply a personal blog, and therefore ASCAP is engaged in discussions with Mr. Calacanis concerning the use of ASCAP members' music on the site.

ASCAP sent collection letters to other website owners in the spring; YouTube told recipients to refer the group back to YouTube. But then a judge ruled Google owed ASCAP $1.6 million while a court fight between the two sides over licensing drags on. At some point, website owners are going to start wondering how much longer Google will offer to handle all the legal complaints over YouTube embeds — and just how many songs they've embedded over the years and now owe royalties on.

(Pic: by David Sifry)

MSNBC's David Shuster lamented the lack of a spectacular and public end to a high-speed car chase.

After chatting with actor Ben Stiller, cyclist Lane Armstrong confirmed to a grateful public the existence of Dodgeball 2.

Mahalo CEO Jason Calacanis explained to TechCrunch's Mike Arrington exactly how grating Arrington is; the positively scientific observation included a citation.

Business Insider's John Carney discovered financial politics had made heiress Lydia Hearst his strange bedfellow. He didn't seem particularly annoyed.

Time's James Poniewozik spent basically all day trying to pronounce the name of Dan Abrams' blog, Mediaite.

Did you witness the media elite tweet something indiscreet? Please email us your favorite tweets - or send us more Twitter usernames.

Some of the Twitterati, it seems, were cranky. Others just overheard cranky people. And still others managed to laugh things off.

You know what's a "tragedy?" The way Food Network chef Tyler Florence's publicity tour is shaping up!

You know what sucks about taking a private jet to the resort town of Aspen? If you're motion-sick Mahalo founder Jason Calacanis, everything.

John Gruber of Daring Fireball found someone who actually finds the New York Times too timely.

The Hollywood Reporter's Matt Belloni posted a facetious nightlife review.

Chris Anderson recognized that Free publicity was the silver lining in Condé Nast colleague Malcolm Gladwell's not-so-friendly review of his book.

Did you witness the media elite tweet something indiscreet? Please email us your favorite tweets - or send us more Twitter usernames.

In the call, a very flustered, obsequious man asks for an ambulance to be sent for a man who has collapsed and is no longer breathing. The only thing sensational about it is that it is now out there. How are people framing their decision to serve up something they know will fascinate you?

• Jason Calacanis sees a conspiracy where there clearly is none.
• The Awl hopes you won't notice their link.
• In a rare instance demonstration of common sense, Perez Hilton kept his mouth shut and posted it without comment.
• And Gawker's editor decided to go for a meta take rather than the only honest one: present something like this for its sheer voyeuristic value.

Timesman-in-chief Bill Keller shilled for the Gray Lady.

Mahalo funtrepreneur Jason Calacanis offered a metaphor for his career.

AllThingsD daddyblogger Peter Kafka experienced technical difficulties.

Rachel Nixon discovered there are media jobs to be had in Canada. (Let's all move north!)

Videoblogger talent rep George Ruiz blended in with the suits better than he thought.

Did you witness the media elite tweet something indiscreet? Please email us your favorite tweets — or send us more Twitter usernames.

Can one blame Calacanis? After a blog named him as a candidate for the job, based on speculation over his friendship with new News Corp. digital executive Jon Miller, he grabbed the opportunity to treat it seriously with nonstop "no comments." Even after former Facebook COO Owen Van Natta was revealed as the real candidate News Corp. was considering to run its social network, Calacanis has maintained the serious pose. (Everyone knows his current gig is going nowhere. We'd love to read the memo on what to do with his overgrown Web directory, Mahalo.)

Now he's penned a memo on what the next CEO of MySpace should do.

His memo is a grab gag of the trendy (virtual currencies!) and the obvious (fix the website!). It's standard fare for Calacanis, a Brooklyn-raised hustler who has made an art of talking more loudly than anyone surrounding him, in the hopes that people incapable of grasping the obvious will follow him.

Wait a second: "People incapable of grasping the obvious." We take it back. He's exactly the man MySpace needs.

The image associated with this post is best viewed using a browser.Van Natta, who has long aspired to run a consumer Internet startup, is an obvious choice. Having fallen out of favor with Mark Zuckerberg, Facebook's fickle 24-year-old CEO, he is spending his exile running a music startup, called Project Playlist, out of an office building shared with Facebook. While Van Natta has managed to extricate Playlist from some of its legal troubles with the music labels, it hardly seems like a gig that encompasses his ambitions. Having worked for Elon Musk and Jeff Bezos as well as Zuckerberg, Van Natta seems capable of dealing with a testy owner-CEO like Rupert Murdoch.

Calacanis, meanwhile, has no qualifications for the job. He tanked his first media company, then sold his second one, Weblogs Inc., for $25 million to AOL, where he accomplished nothing of note after the acquisition. He's since raised far too much money for Mahalo, a Web 2.0 rehash of Yahoo's 1995-era Web directory. Silicon Alley Insider thinks he should be MySpace's new CEO because he worships Jon Miller, the former AOL CEO who played mentor to him before Miller was fired and Calacanis quit. Ever the clever fameball, Calacanis is playing coy and saying "No comment" as loudly as possible.

Miller now runs News Corp.'s Internet operations, so he's the one to pick DeWolfe's successor. We have a suggestion: Hire both! Van Natta can do the hard work of fixing MySpace. While he's affable enough, he hardly seems to crave attention.

Tom Anderson, DeWolfe's sleazy sidekick at MySpace, is every MySpace user's first friend when they sign up. He needs a replacement, too. Why not replace him with Calacanis, the ultimate Web fameball, who seems to measure his self-worth by his number of Twitter followers? He doesn't need any other responsibilities. And as MySpace's Chief Ego Officer, he can still claim to be CEO.

For all the Mahalo employment horror stories out there — the company boasts one of the 10 worst entry-level gigs in Silicon Valley — its founder can treat people well when he chooses to.

For example, the tech entrepreneur likes to brag about and flaunt his connection to celebrity Twitterers Ashton Kutcher and Demi Moore, who he advises, if only informally, on internet brand building.

Calacanis also has a soft spot for those who must wait on him hand and foot: Calacanis recently congratulated himself on Twitter for "giving 50-100% tips for the last couple of months. My wife called it the JCAL stimulus plan."

We're happy to see Calacanis pumping his blog riches into the economy one entrée at a time; if more of America's wealthy embrace this sort of conspicuous consumption once again, the recession will be over that much sooner. On the other hand, we might feel differently if we actually, you know, had to work for the guy in a non-servant capacity.

Not that we blame Berners-Lee for these things ... okay, okay, we do. The 20 worst things about the World Wide Web:

• 1. Julia Allison
• 2. Twitter
• 3. Jason Calacanis
• 4. Wikipedia
• 5. Henry Blodget
• 6. Dave Winer
• 7. Blogs
• 8. Dead newspapers everywhere
• 9. Congressman Jared Polis
• 10. Robert Scoble
• 11. The Pets.com sock puppet, and Michael Ian Black's subsequent career
• 12. Digg
• 13. Perez Hilton
• 14. /b/
• 15. Wikipedia founder Jimmy Wales's love life
• 16. Oversharing
• 17. Mark Zuckerberg
• 18. Chris Crocker
• 19. Internet commenters
• 20. Kevin Rose

We realize they weren't in your original spec, Timbo, but you should have anticipated them. Really.

Poor Williams! He's just the latest target of Winer's wrath. The irascible Internet fussbudget has gotten mad at Jason Calacanis for being self-promotional, mad at Internet commenters who do not acknowledge his contributions to the Internet, mad at Twitter for not doing what he says, and mad at Hillary Clinton for being alive. (We've also long suspected that he is secretly mad at the New York Times because they will not hire him as a columnist and run his verbal spew unedited.)

But Winer's latest rant is hilariously hypocritical.

Williams's sin, according to Winer, is playing favorites with Twitter's "Suggested Users" page, a feature meant to help bewildered new Twitter users navigate the messaging service's real-time, 140-character spasms of pointless puffery. He writes:

I pour a lot of effort into Twitter, and while I wasn't in the top tier of users, I was solidly in the second tier. I wasn't doing the things you have to do to get the most followers, or I didn't have a powerful media presence like Leo or Shaq to get me up there. ... It's now approaching 20,000, which I am proud of, but it's not very much compared to the numbers of some people who did nothing other than be friends of Evan Williams to get hundreds of thousands of followers. ...

Think about it this way — do you know who wrote Apache or PHP? Do any of them have the power to deliver so much flow to an installation of their software? Imho, that's exactly the relationship Twitter should have with its users. Or the phone company and users of phones — they shouldn't jump into a conversation and say (for example) "We know someone really cool you would probably like to talk to. We're connecting you to them now.

Makes sense! Who would want the phone company to do that? Except Winer did the exact same thing himself with his own blog-software company, Userland Software, in 2003, writes former employee Rogers Cadenhead. Moreover, unlike Twitter's Williams, he actually took money to promote a blogger — former MTV veejay Adam Curry. In 2003, Curry wrote:

Time to come clean on an investment I made a year and a half ago. At the time, UserLand software had released a Mac OSX version of Radio and I was totally digging the built in news aggregator. I came up with a cunning plan: I asked Userland if I could purchase a pre-installed feed on their aggregator, which supports RSS xml feeds. I paid $10,000 for a one year license. To date I've been delighted with my purchase and although I haven't checked recently, I'm pretty sure Userland still has me in the defaults. ...

The $10k didn't 'just' give me an automatic base within the userland community, it got pasted on web pages all over the world and I've built up an audience that consists of 50% aggergator users.

Williams hasn't said anything about charging for placement on the Suggested page, but it can generated tens of thousands of new followers a day for featured Twitter accounts. Mahalo CEO Jason Calacanis — yes, the one Winer feuded with — has offered to pay $250,000 to get featured on it. Which makes us think: Winer isn't mad at Williams because he's playing favorites. Winer is jealous because Williams is far more effective at playing favorites than Winer will ever be.

In a mass email, Calacanis wrote that he and Mahalo's CTO, Mark Jeffrey, were ignorant of Schiefer's background, even though his 2007 guilty plea to installing malware was easily found on Google.

We didn't know John was convicted of infecting 250,000 computers with bots when we hired him. We have a rigorous hiring process at Mahalo, in which each candidate must go through an average of five to eight interviews, and in which at least three, but more typically five, references are checked. Our CTO, and one of my oldest friends, Mark Jeffrey, did all of this with John, and he passed with flying colors.

However, Mark screwed up by not doing a simple Google search on John's name. If Mark had, he would have easily found out about these crimes, we would never have hired John, and I would not be writing this letter. Why would we even take the risk of hiring a felon hacker? No one would, right?

Calacanis makes a rousing defense of Schiefer, saying the experience of watching an employee get sentenced to four years in jail has taught him powerful lessons about redemption and rehabilitation. He excuses Schiefer's crimes by saying, essentially, that everyone does it and that Schiefer was abused as a child.

However, I consider myself a fairly decent judge of character, and after spending months with John, I'm convinced he was an angry stupid kid when he launched his botnet attack (which did .000000001% of the damage it could have). Now he's an adult who just wants to make a decent living, spend time with his significant other and breathe the clean air off the Pacific Ocean by our offices in Santa Monica.

Perhaps that's all true. But it certainly seems embarrassing for a guy who's been entrusted with $21 million by investors to build a better search engine to admit he let a felon into the office without bothering to do a simple search first. May we suggest you add this search to your rewrite list?

"Celebrities have a lot of free time," Calacanis said on an industry podcast, "and... when you have a lot of free time, the internet is a great place to get yourself in trouble."

Calacanis should know: He once videotaped himself in a Santa Monica street race. That diversion is illegal in California.

But the internet entrepreneur said Kutcher and Moore took things a step too far, chucking bottles of juice at two poorer guys working on a neighboring house at 7 in the morning. The noise, apparently, had been too much for the late-sleeping movie stars. Calacanis asked why Kutcher was picking a fight with people who were "busting their asses." (Audio above.)

If the internet makes it easier for Moore and Kutcher to rearrange their yoga plans and otherwise connect with Twitterati like Calacanis, it also makes them all the more likely to expose — and to be called out on — their personality flaws.

The party for the documentary, A Sealed Fate? contained the following ingredients: Director and America's Next Top Model host Nigel Barker, beautiful pictures that he shot of baby seals and ice, and one DJ conveniently named Josh Madden, aka the bro of Paris's former beaux Benji Madden. Seems Mr. Barker humped around the arctic with the Humane Society of the United States and got inspired or something to stop the whole slaughter of adorable furries racket.

Mike Colter executes the time-tested "flash dashing smile while putting arm around Czechoslovakian Ph.D wife named Iva" gambit at a party for Technicolor at Bacchus. Mike is in Taking Chance at Sundance and was in Million Dolar Baby.

Actress Chyna Layne was in a film called Push, which had its world premier at Sundance and was directed by Lee Daniels of Monster's Ball fame. We saw her at the Technicolor party at the Bacchus wine bar and were like, "Hey that shirt is the color of your website splash page."

Remember Pseudo.com founder Josh Harris? Threw wild parties, made millions, then sort of flamed out and went into apple-growing exile upstate? Guess what! He's back as the subject of the documentary We Live in Public, directed by this lass, Ondi Timoner. Ondi and the lovely red couch were located at the film's premiere party at the Sidecar Lounge on Main Street. She's doing a sequel too.

That's Josh Harris himself, who emerged from the shadows to populate the Sidecar Lounge party with Mahalo CEO Jason Calacanis.

DJ Nature Boy of San Francisco prepares to fuck some shit up at the premier party for We Live in Public. His companion, Maynard, a self-described bon vivant, sweats and writhes patiently in the background.

Thomas, aka "the coolest bartender in New York," was dragged kicking and screaming to Sundance by his proctologist, but said he was having a pretty good time. "Last night I had dinner at Grappa and saw Frodo." Thomas and his scarf were both soaking up the "flavor" at the Technicolor party at Bacchus.

You can find more of Stephen's work here.

An informant familiar with the startup's excursion tells us that Calacanis had instructed workers to dress warmly and expect to be away from the office all day. This provoked a frisson of excitement, as rumor spread that Calacanis had sold Mahalo and the trip would be a chance to meet their new owner.

How depressing, then, to find themselves greeted by Mickey Mouse in Anaheim, Calif. "I am assuming he forced them to leave their phones behind to avoid all the Twitters of how much it sucked," our tipster tells us.

During the beta of Mahalo Answers, a service where users pay others to conduct Google searches for them using a faked-up currency, one tester asked, "Is Jason Calacanis cool?" An accurate answer: "Despite the bulldogs and the Brentwood mansion, no, not particularly." But instead, an ex-employee unloaded all the rage she'd stored up since getting laid off from her job at Mahalo this summer. Calacanis has his minions delete the entry, but we've obtained screenshots of the uncensored page. It's a soon-to-be-legendary rant.

I've been wondering when this generation of Web companies would come up with an answer to Flooz and Beenz, the made-up Internet currencies of the dotcom bubble. How foolish of me not to realize that Calacanis, who has recycled so many other ideas (Web directories, wikis, crowdsourcing) in his failed quest to create a successful Web business, would be the one to revive this failed idea.

If you don't recall Flooz and Beenz, they were made-up currencies that websites could use to reward users, who would then spend them on real online purchases. Both went under in 2001, leaving their means of exchange worthless.

Mahalo Dollars have a more limited purpose: People with questions they're too lazy to Google can buy Calacanis's fake money with real coin, and then pay freelance Internet researchers to answer their questions.

The pay-to-search business is a lousy one. Google, which tried a similar scheme with real money, gave up on it last year. ChaCha, a Midwestern startup pursuing a similar idea, has had no apparent success.

I'm sure Calacanis will make some money in the short term by skimming currency-exchange fees from the suckers he gets to sign up. Eventually, the currency will collapse faster than the Indonesian rupiah did in the '90s. But by that time, he'll be on to some other scheme.

It's actually not surprising that Calacanis has attracted a small group of loyal followers who hang on his every word. Let's review the evidence: He ran a tech magazine in the '90s but failed to cash out big. Dumb! He sold a bunch of blogs to AOL for $25 million in 2005, before everyone figured out blogs weren't worth very much. Smart! He squeezed $40 million out of Sequoia Capital, a notoriously tightfisted venture-capital firm, before things went bust in the Valley and Sequoia started telling everyone to lay people off. Smart! He stopped blogging when he realized that it just gave angry people on the Internet a platform to bash him. Smart!

Flipping startups is one thing. Saving the country is another. Calacanis believes we can all just work our way out of the recession. That's a horribly bad idea, blogger Nick Baily explains.

Calacanis's "120 percent solution," boiled down, tells us to work 20 percent harder and cut up our credit cards. But he doesn't take basic supply and demand into account.

Let's say we work more and produce more. Who's going to consume whatever it is we're producing — cars, cell phones, useless Web-directory pages? Us, right? But wait — we followed Jason's advice and stopped buying things. More stuff, fewer people buying it leads to a massive deflationary price spiral. Japan tried this, and it did not work out very well.

Calacanis's U.S.-first scheme could work, I suppose, if we could find someone else to do all the buying. But it turns out most people overseas hate buying things. China, the next great consumer marketplace? Notoriously cheap. Likewise most of the rest of Asia. Russia, the home of so many new millionaires? If gas goes to $1, they're all broke, too. Same for the Middle East. Shoppers in India might buy things, but — oh, right — we just fired all of the outsourcing workers we decided we no longer needed.

So what do we do? Repairing bridges and roads and building high-speed trains sounds like a good idea. But spinning our wheels 20 percent harder, as Calacanis proposes? That gets us nowhere fast. The best part of this market implosion surely must be that Internet CEOs are no longer regarded as economic savants.

Web 2.0 was a bubble that never inflated — a shimmery illusion that popped well before we stopped talking about it. Precious few people got rich from the notions its proponents championed, such as user-generated content and social networks.

Calacanis was the only person of note to cash out on the blogging craze, selling a set of blogs to AOL for $25 million. That was a paltry figure in the grand scheme of things, but enough to set him up in a comfortable home in Brentwood and buy him a $109,000 electric sports car. And enough to make him a Web celebrity, with thousands of followers on Twitter and friends on Facebook — the quantifiable metrics of fame preferred by those who are not really famous.

The startups of the Web 2.0 era have proven similarly vacuous in their success. Skype, the Internet-calling service, sold for $2.6 billion to eBay in 2005; the auction giant wrote off $1.4 billion of that purchase last year. YouTube, sold to Google for $1.65 billion, is an acknowledged failure, with product managers scrambling to bedaub it with enough advertising to merely pay for its bandwidth bills. And the IPO market that powered the '90s bubble? All but invisible. The most recent big offering was in August for Rackspace, a boring company which hosts servers, and its stock has since fallen by half. With Wall Street on its knees, no one expects another IPO soon.

Will there be another bubble? Technology moves in cycles and is prone to investing fads, so yes, almost certainly. But there is nothing that looks set to inflate it. Cleantech, the next big hope of Silicon Valley, requires vastly more capital than Internet startups, and capital is now in short supply. (Falling oil prices, too, discourage the development of green energy.) While Internet users are devoting more attention to social networks, advertisers are staying away. Calacanis's venture, Mahalo, is a spiffed-up rehash of the kind of Web directory Yahoo built in 1995; he's now cooking up a new, secret project — which suggests that the loquacious entrepreneur realizes his original plan fell short. He may be onto something, if only in admitting failure. If this bubble fell short in making the likes of Calacanis rich, they have their own paucity of ideas to blame.

Right now I'm locked down polishing off the details of Project A—a new product which that Mahalo is launching in December. We think we've created the right product for our troubled times, and the progress made over the past month by our tech team has been nothing short of amazing (thanks guys). There are many smart folks with lots of knowledge that are un - or underemployed right now and who are looking to make some extra scratch. Project A should help them. I'm going to be looking for some beta testers in a week or two and I'll be pinging some of you (if you're smart, like helping others, and have time on your hands you'll really like it).

The image associated with this post is best viewed using a browser.

Highly profitable About.com contributes nearly half as much operating cash flow to the Times Company as the news operations, so it would be tough to lose. But that profitability, plus decent growth prospects, also makes it an easier sell. Newspapers like the Boston Globe or the Times Company's regional newspaper chain seem unlikely to fetch much given the state of the industry.

Though online advertising has come in for its share of trouble recently, About.com features, along with conventional banner ads, the sort of contextual text advertising expected to fare better in the downturn than banners.

And cash from a sale could be used to take the Times private, which we heard last week was under discussion, to be funded by the sale of assets like About.com.

The Times in January shot down rumors it was looking to offload About.com. But the company now finds itself in a very different environment. And it would be in keeping with the company's character to face new choices by conserving the hard core of its journalism franchise, even at the expense of more profitable units.

The big unknown, assuming sale rumors are true, is whether the company will be able to find a buyer. If not, it may well have to abandon its sunny forecast regarding job reductions.

(Click the video at top to listen to the original audio. The About.com comment comes around the 00:45 remaining mark.)

The paradox of the death spiral is that many pilots actually believe
they are stabilizing their plane when they are actually tilting it.

What is "The Death Spiral"?
====================
The death spiral for startups is like the condition that occurs to pilots when they fly into "weather." The "weather" right now is the massive confusion and uncertainty of the financial and consumer markets.

We can now operate past 2012 even if we never make any advertising revenue, and truth be told, building advertising-based companies is my specialty (the last two, Silicon Alley Reporter and Weblogs, Inc. each broke 10m a year revenue between their third and fourth years).

Perhaps we're being too conservative, but I've rarely heard of companies that went out of business because they made cuts too early, and I've heard of many who have reported the opposite.

Take notes, Taurus. That's the new story. Stick to it. Be strong. Profits are so 2013. Did you have a layoff? No? Too late. Now let's go out there and kill it again! (Photo of Jason and Toro from 2005 for Wired by Emily Shur)

Developers/Senior Developers (Santa Monica)

Reply to: job-894125901@craigslist.org [?]
Date: 2008-10-26, 10:07AM PDT

Do you know that you're amongst the very best, but can't find a company that appreciates you or gives you the opportunity you deserve?

Mahalo.com is a human-powered search engine. It is one of the hottest startups on the planet right now. We're well-funded by the same people that backed Google, Yahoo and YouTube (Sequoia), a well as Newscorp, Mark Cuban, Elon Musk (Paypal) and CBS. Our human-curated results are the very best starting page for any topic you can think of, blowing away machine-only search engines. And our growth curve has been phenomenal: this coming year ought to be downright amazing.

We're looking for top-notch Developers and Senior Developers to get us to the next level.

Skills we're looking for include the following (you should have a subset of these, all are not required):
* Python, PHP
* C/C++, Java
* MySQL
* Familiarity with MediaWiki
* memcache, squid
* Strong command of PHP5
* Familiar with general Internet technologies including HTML, XML, Javascript, HTTP, CSS, cookies, etc.
* Knowledge and experience in Apache, MySQL, Linux

Bonus:
* Hadoop / Hbase
* Lucene
* Nutch
* Spread

You are a HANDS ON implementor, a get-it-done kind of developer. The right person is a self starter with the "general get it factor". You work well with a team of like-minded engineers, and have a genuine desire for excellence.

We work with cutting-edge technologies. You will learn more here in a month than most companies will teach in a year.

Although we work hard, we offer a laid-back environment, competitive salary, benefits and stock options. This is a potentially life-changing opportunity — the kind that is usually only available in Silicon Valley, and is extremely rare in Southern California. If you're excellent, we invite you to come join us.

Please send a RESUME.

Location: Santa Monica
Compensation: Commensurate with experience + Options
Principals only. Recruiters, please don't contact this job poster.
Please, no phone calls about this job!
Please do not contact job poster about other services, products or commercial interests.
PostingID: 894125901

• Have the founder spend 30 minutes typing an email that you claim will be sent to all@yourcompanyhere.com. (Don't lie, Spock would say. Exaggerate.)
• Instead, send the email — be careful here! — to one of your engineers.
• Have the engineer forward it to another engineer, with the added line CONFIDENTIAL — DO NOT FORWARD typed in convincingly at the top.
• Engineer No. 2 then forwards the mail to TechCrunch.
• Boom! For once, the morons in the press will run your message completely unedited.

From: jason@calacanis.com
Subject: [Jason] How to handle layoffs
Date: October 22, 2008 6:10:18 PM PDT

It's interesting to watch the negativity and obnoxiousness of some bloggers and anonymous commenters while these layoffs have been going on. When things go bad you can really tell what people are made of.

• Don't lay people off one at a time, do it as a group. Don't spread layoffs over multiple rounds.
• Cutting salaries over headcount is generally not a good idea.
• Give severance even though you don't have to. Be as generous as you can.
• After the layoffs, get folks ready to kill it again.

Calacanis shovels page after page of boring details about P&L and office expenses. You know what word's not in there? "Sad." Boy Wonder's not going to spell it out, so I will: If layoffs don't get you as excited as that time you jumped out of an airplane, then realized too late what a lousy job you'd done of packing your own parachute and you were going to die now — heh, layoffs! Love 'em or go back to grad school.

(Photo by nikan_gr)

I wonder if he and Michael Arrington taught "how to fire half your staff" at TechCrunch 50 this year?

Silicon Alley Insider reports that a third of Mahalo's full-time staff was laid off; Calacanis, in a blog post — wait, we thought he stopped blogging — muddles the issue by saying Mahalo has 70 full-time and freelance staff. A former Mahalo insider, however, says the real full-time staff has dropped by roughly half, from 60 this summer to 30 before the layoffs. The Brooklyn-raised CEO is ever the artful dodger.

On the upside, you've given Owen and me a whole new topic for slow afternoons: People who don't even know they're working for Valleywag. Calacanis was easy. Scoble isn't hard enough. We'll have to figure it out some more.

Jason: Holla back! Aw, come on. We hate it when you don't holla back. (Photo by Peter Kaminski)

From: Calley Nye
Date: Wed, Oct 1, 2008 at 8:35 PM
Subject: I could really use your help :)

Sorry for the mass email, but I wanted to keep you all informed about something I'm working on, and to ask for your support.

Today, I launched a social media fundraising experiment that I'm calling Start Me Up. Most of it is explained here http://calleynye.com/post/52663867/start-me-up

The accompanying post is pretty self-explanatory, just an explanation of my startup and why I'm raising money. But I wanted to share with you my real intentions.

In Jason Calacanis' email the other day, he talked about the startup depression. Several other people have been talking about it as well, and I think it could be a real problem. In a failing economy, it's not hard to lose faith in business and in part, yourself.

I hope that this can be a demonstration that there is always another way. The message is that it's not the end of the world if you can't get institutional capital, and that you hold some control in these troubled times. Entrepreneurial spirit is why we all wake up in the morning, and I don't want to see that die or suffer in anyway.

I would really appreciate your support in this, anything would help. Donations, tweets, blog posts, Facebook bulletins or forwarding this email.

Thank you, and if you have any questions you know how to find me :)

Calley Nye
Entrepreneur/Blogger/Marketing Consultant

(Photo by Andrew Mager)

Wall Street is currently in a bubble of panic. The Valley is currently in a bubble of denial. Neither zone approaches reality. Members of the National Bureau of Economic Research — the only official arbiter of such matters — can't even agree if we're in a recession yet. "It's really hard to say if we're in a recession, because different indicators point in different directions," said Jeffrey Frankel, a Harvard professor and a member of the NBER's recession-calling commitee.

That technical measure of recession ignores the reality on the ground: Home prices continue to slump, gas prices are pinching consumers' pocketbook, and advertisers are aggressively cutting back budgets, even online. Layoffs are grabbing headlines.

But does this really affect the Web startups which so enchant the blogosphere's imagination? Schadenfreude demands that these tiny companies shutter their doors — or if they don't have the decency to close up shop, they should act suitably chastened by the cold economic winds blowing. There's a lot of contradictory advice being handed out: Rely on angel investors! Don't rely on angel investors! My advice: Don't rely on journalists and bloggers for advice on how to run your business.

One might think Valleywag, which eagerly chronicles the mishaps of misconceived startups, would cheer on the notion of a lot of startups starving to death because of an economic downturn. Far from it! Better that they choke on their own vomit — that excess and lack of self-discipline kill them, rather than factors outside their control.

Serious entrepreneurs should be tightly controlling their spending. But that is as true now as it was a year ago, and a decade ago. Retaining pricey PR firms, throwing lavish parties, hiring executives from Fortune 500 companies at mid-six-figure salaries — that can wait until the company turns a profit. If your startup is dependent on a bubbly economic cycle, then it's not being run like a startup.

By all means, those who were never meant to be entrepreneurs in the first place, who lack any real ideas of their own, or any interest in making money rather than spending someone else's, should take this occasion to make a graceful exit from the scene. Six months ago, closing your startup would have seemed cowardly if not insane; now, everyone will nod at your wisdom.

That brings me to the opportunists — the likes of Marc Andreessen, who has been preaching the notion of a coming "nuclear winter" for some time, and Jason Calacanis, who recently wrote about a looming "startup depression."

Were I more impressed with their current startups, I'd nod alongside. But Andreessen's Ning is an unimpressive social-network builder; Mahalo, a gussied-up replica of Yahoo's 1994-era Web directory. Frustratingly for some observers, they have raised enough money that neither company will run out of funds for at least a year. (No one sincerely believes Calacanis when he says he has enough money to run the company for four years, do they?) If their flimsy business models remain unchallenged, their survival is all the more likely. So when Andreessen and Calacanis talk doom and gloom, what I'm really hearing is: "Please don't raise money for a better idea than mine — I can't take the competition."

What history tells us, actually, is that the best companies are started in times like this. The last wave of truly innovative Web 2.0 companies — Flickr, Del.icio.us, Last.fm, Facebook — started at a time when no one particularly believed in their potential.

Many people would benefit from a climate of fear: Venture capitalists, who might get larger pieces of startups; employers, who might hire talent more cheaply; and corporate dealmakers, like Jeremy Philips of News Corp., who might acquire companies less expensively.

But the biggest reason to ignore Philips' fearmongering, in particular? He's not taking his own advice. Rumor has it that, instead of food and guns, he is acquiring a piece of Manhattan real estate. And from what we hear, it is rather too glossy a place to serve as a warehouse for rations and ammo.

(Photo by Gawker Media)