Comcast paid an un-fucking-believable $125 million for DailyCandy — just a simple shopping e-newsletter, if you're not familiar with it — just over a year ago, greatly enriching former AOL exec Bob Pittman, who had previously acquired it for $3 million. Amid all the investment, DailyCandy expanded from New York to London, Los Angeles, Chicago, San Francisco, Miami, Dallas, DC, Boston, Atlanta, Seattle and Philly.

DailyCandy will now stop publishing city-specific editions in all but five of those 12 cities: New York, London, LA, Chicago and San Francisco. Subscribers in the other cities will now receive an "Everywhere" edition, supplemented with local news and events twice a week.

The email publication appears to have been bulking up dramatically. When last we checked it had 20,000 subscribers, too few to get much attention from advertisers. A year ago, VSL contributor Kurt Andersen told Charlie Rose it was up to 100,000 subscribers.

We checked in today with VSM general manager Gary Foodim, who says the list is up to 200,000 subscribers.

Tenfold growth is a commendable achievement for a list that targets a "smart set" of well-to-do would-be sophisticates. The question is whether VSL still has any claim on that set or whether, as we hear, the list has been diluted with users from other IAC brands, resulting in an open ad rate surprisingly low for a database of upscale consumers. One anecdote making the rounds even says that Diller's friends have abandoned the service; of 25 buddies he used to seed the VSL list, all but one is said to have unsubscribed.

Apparently retaining at least some highbrow airs, VSL hasn't responded to our request for comment on that scuttlebutt.

But it's easy to imagine that Diller, who once said he would be "much diminished" without VSL, has moved on. Rumors that he wants to offload the site have been rife this year. Now VSL is said to be in talks with Jared Kushner's ailing New York Observer. And Diller would appear to have a new favorite toy, judging by the $18 million he's feeding into the bonfire that is Tina Brown's Daily Beast.

On the one hand, a childhood pal — Russell's mom was reportedly best friends with Levy's mom — can do far worse than guiding one to tens of millions of dollars in wealth. And Pilot Group did more than passively watch its investment grow. From what we hear, Pittman's salesmanship was key to growing Daily Candy's advertising base. Such involvement would be in keeping with Pilot Group's focus on taking a "control position" in its investments. After the investment firm acquired Daily Candy, the newsletter's subscriber count grew tenfold to 2.5 million.

But not everyone buys that version of events. Said the tipster, an AOL veteran who followed Daily Candy closely:

For Pittman to brag that subscribers have increased since he made

the investment is just private equity puffery and delusion. That

would be like my grandmother taking credit for the business success of

the stocks she owns.

Perhaps Russell's help was not so selfless. As our source notes, Russell's advice on the deal would have been "highly conflicted," Russell having worked for Pittman for several months before the Daily Candy investment closed in late 2003.

His line to other potential portfolio

companies and strategic partners is that through his friendship with

Dany, HE was responsible for the early success of Daily Candy as a

startup, so he didn't feel compunction about duping the original

shareholders... Whatever the case, Pittman was not a genius to have his

junior guy abuse a family friendship in a predatory deal.

Let this be a lesson to startup founders who are not yet sufficiently cautions about venture capital investment, or who spend too much time worrying about whether their fameball girlfriends really truly love them for the right reasons: If you're not careful, you might have to settle for a paltry $25 mil when the big payday comes. After taxes, you'll barely be able to afford a decent loft!

Bob Pittman's claims to have founded MTV were overstated, but he was closely associated with the cable music channel's gigantic success in the 1980s. It was said of his wife Sandy, who later attempted to conquer Everest, that she gave a new meaning to the term "social climber." And Pittman himself was equally ambitious on the Manhattan circuit, though he scaled the social and business heights with a good deal of charm and grace.

The one-eyed mogul, now 54 years old, came tumbling down after he took over management of revenue-inflating AOL during the bubble. The online access service cashed in on the funds being invested in late 1990s dotcoms, much of which was spent on advertising partnerships which gave the startup brands a place on AOL pages.

The Dulles-based online service was never going to survive unscathed a downturn and the erosion of the dial-up market, and Pittman's reputation would have suffered anyway. But the infamous 2000 merger between AOL and media giant Time Warner ensured he would not merely be despised by investors who bought into AOL at its revenue-inflated peak; he personified to Time Warner veterans the arrogance and empty rhetoric of the AOL upstarts. Pittman managed to sell $94m in stock in the aftermath of the merger, but the dilution of Time Warner shareholders ensured the hatred of a large part of Manhattan's media establishment.

Pittman's contribution to Daily Candy has been more constructive. His salesmanship transformed Dany Levy's cute little newsletter into a marketing machine for fashion and retail brands. Pittman's reputation as a canny internet investor is made by this transaction, by some measure the best return of his fund. To be sure, the web may eclipse email as the preferred online medium for advertisers, and Comcast may have bought a property that's past its peak. But the cable company's bosses are in Philadelphia, a city that Pittman can easily avoid. In terms of Manhattan media, the former wonderboy is back.

• New York-based e-mail startup Daily Candy gets a sweet deal: an investment valuing the company at $130 mil, which lets the company take down its "For Sale" sign and get back to the important business of making urban women feel inadequately shoed. [Gawker, link being fixed]
• So some big-city bloggers had a party for Six Apart's new Vox blogging service, right? And some guys sat in a hot tub on the roof? And probably someone called this the bubble? Hon, it's not a bubble until what's in the hot tub can get you drunk. Anyway, click through for topless shots of Gawker Media managing editor Lockhart Steele. [Teen Drama]
• Damn it, Gawker's stealing all the tech news today. As our catty sister notes, the New York Times is proud to name-drop Dodgeball.com founder Dennis Crowley, the man responsible for every New Yorker and San Franciscan constantly updating their friends on how drunk they're about to get. [Gawker]
• Pictured: The Times also uses a photo illustration to remind everyone of those wild days of free drink coasters for all. [NYT]
• Mooching off the "Get a Mac" commercials: You can make a clever parody or a creepy knock-off ad. (Please make the parody.) [iLoad]

• The tone is described as "gossipy," "cliqueish," and defensively independent.
• It's rumored that the writers aren't exactly raking in the dough.
• And yet the company manages to rack up a mythical $100-million selling price.
• There's precious little office space, and the staff would rather tease than invite a journalist over.
• It's really just Old Media with the Internet stirred in.
• It tries oh so hard to be sexy and trendy.
• All the guys involved are probably gay.

It just felt...eerie. As if...as if I already worked for this company. But one line relieved all Twilight Zone heebie-jeebies.

• "The company...fiercely combats any perception of impropriety."

Well fuck that.

How Sweet Is It? [New York Magazine]
Illo: Daily Candy [DailyCandy.com]

Daily Candy wins "Most jackass self-evaluation" for its $100 million asking price. When the Times calls a 10-times-earnings sale price "a conservative multiple by technology industry standards," someone is either still living in the 90s or already privy to some pretty high-rolling deals.
Everyone's "learning from their mistakes" and "not getting caught in the hype" — and "seeing 37% growth a year."
Uses of "Mr.": 16. Uses of "Ms.": 1.

Alive and Well in Silicon Alley [NYT]