Stone declared some time ago that Twitter.com would be an advertising-free zone. But as Peter Kafka points out on MediaMemo, Twitter has been running house ads for some time, promoting its search engine and other features.

ExecTweets is a directory of business executives who use Twitter to post short messages to their friends, fans, underlings, and sycophants. What did it take to put Stone in that last category? Why, just a little bit of cash, courtesy of John Battelle's Federated Media, an online advertising agency known for its controversial online campaigns which blur the line between editorial content and advertising. Battelle writes:

Twitter has a history of promoting applications and projects they think are interesting, relevant, or valuable regardless of any financial arrangement. Federated Media felt that Twitter should share some of the revenue associated with ExecTweets since this project is made possible using their open platform.

He'd have us believe, in other words, that Twitter is promoting ExecTweets not because it's getting paid but because Stone and company just love, love, love it. Right. And if you believe that, Battelle has an interesting topical experience to sell you.

Time political correspondent Karen Tumulty shared some Capitol trivia.

New York Times TV blogger Brian Stelter experienced a Christian Bale problem.

Federated Media online-ad huckster John Battelle had time to Twitter, but not to think. See how that works?

Wired.com editor Dylan Tweney went hungry after a colleague ate his lunch.

Could the sushi thief have been Wired writer Steven Levy, who confessed to feeling hungry? Nah — Levy was at TED and you weren't.

Anyone else's tweets we should keep an eye on? Send us more Twitter usernames, please.

A memo from Neil Chase, one of Battelle's top lieutenants, explains the move as a strategic shift, with FM downplaying regular banner ads and playing up "conversational marketing," a fancy term for the kind of shilling that's common for radio hosts but considered verboten for print journalists.

Famously, Battelle got dozens of top bloggers to recite a Microsoft slogan in one of his "conversational" campaigns; several quit the campaign after Valleywag exposed their participation. More recently, Battelle has signed up less difficult spokespeople; a recent campaign for Intel features so-called "social media marketers" — PR and marketing consultants who are used to promoting the wares of paying clients.

Advertisers pay well to borrow bloggers' credibility. But getting them to purchase advertising on their sites? A far more difficult business. Online ad rates have been dropping fast, a result of ever-expanding supply and recession-softened demand. Federated Media had to discount rates last month, and lost a key customer in Om Malik's GigaOm, a tech blog network. No wonder Battelle wants to get out of the cutthroat online ad-network business, and focus on selling his customers' reputations instead.

Here's the memo:

Dear Authors,
We've been preparing for a tough 2009 by talking extensively with advertisers, agencies and authors about what's changing and how we need to adapt to do well in a tough economy. We've learned a lot, and today we're acting on it.

Sometime in the next hour or so, John will announce on the FM blog what we're telling the staff right now: A small number of employees are leaving FM today. We're sad about losing good people who have made valuable contributions to FM. We honor their service, we wish them well, and we'll do everything we can to help ease their transition.

Today we're changing FM to better support the conversational, customized programs that advertisers tell us they want. They're asking for more innovation, new ways to engage more deeply with your audiences, additional conversational tools and better measurement of results. While we're losing good people who primarily supported basic advertising campaigns, we're moving people within the company and adding new positions to beef up the teams that run our most complex projects. That means more help for engineering. It means additional project managers for conversational campaigns.

It means reassigning some salespeople to better serve those advertisers who told us they want to take advantage of the downturn to win market share from competitors.

John's post will explain more about these changes, and I'll be in touch again next week to introduce a new face on the Author Services team and tell you about some improvements in the ways we'll work with you when you're participating in conversational campaigns. Please contact me with any questions or concerns.

As always, thanks for being our close partners.
All my best,
Neil

The reality: Battelle's dream of conversational marketing has turned into something more like the schlocky endorsements radio hosts get paid to do. By falling so short of his rhetoric, Federated's experiments have mostly ended in embarrassment, both for him and the bloggers he represents. Last year, he roped Malik and other writers into a scheme to have them recite a Microsoft slogan. And though Battelle apologized for that advertising campaign, he's conducting a similar campaign for Intel — though he has wisely picked so-called "social media marketers" with less journalistic credibility to lose; most already willingly shill for products on Twitter, Digg, and the like.

That's the insult. But Battelle's company has also delivered an injury, in the form of an abrupt slashing of advertising rates. GigaOm, TechCrunch, Silicon Alley Insider, and a host of other tech blogs represented by Federated have had their official rates cut 35 percent; deals negotiated with large advertisers are presumably being struck at even steeper discounts.

So Malik has taken his business elsewhere, to IDG, the publisher of PC World and several other large technology trades. As with Federated, IDG will sell ads, keep a large portion, and share the rest with Malik's company; 30 to 40 percent is a typical commission in the business. IDG has a vast army of salespeople to serve its print publications; as the print business vanishes, it makes sense to busy them with selling online advertising. Federated, meanwhile, has had to assemble its sales team from scratch.

Federated's slogan is that it is "author-driven." What does it say that an author has been driven from its ranks? Malik and Battelle are both savvy businessmen who know each other well. (I have known both for a long time, too, and edited their columns at the late Business 2.0 magazine.) IDG simply cut Malik a better deal, I believe — and no amount of rhetoric about "serving authors" from Federated could make up for the financial shortfall. In every negotiation, the time arrives to wrap up the conversation and strike a deal.

(Photo by Scott Beale/Laughing Squid)

————— Forwarded message —————
From: Federated Media
Date: Thu, Nov 13, 2008 at 9:05 AM
Subject: A Holiday Gift from FM, $5 CPM's
To: melissa@melissagira.com

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FM Self-Serve Homepage
Online Marketing Idea Exchange

When Frauenfelder appeared in an Apple TV spot a few years ago, his fans loved seeing their fringe-culture hero take over the boob tube. But today ads are jammed full of Internet hipsters. Boing Boing's "band manager," John Battelle, has turned old-fashioned host endorsements into an online art form at Federated Media, his advertising agency. He's holding a conference right now in San Francisco's Presidio, telling eager brand managers that endorsers like Mark Frauenfelder make them part of a conversation with Internet consumers.

Battelle builds sites whose ads feature authors on whose blogs he also sells ads. It's a reputational Ponzi scheme far more complex than a George Foreman grill. Maybe that's why I flinch when Frauenfelder's face pops up on my screen with an Adobe logo and a button that says Grab Widget. Mark, if I want a widget, I'll open your magazine and make one myself.

At no point does Santora mention Dell's name. But his underlying message, that new technological gear helps us all do our jobs better, certainly serves Dell's purposes. I would have thought that the strict Times ethics code would forbid such an endorsement, paid or otherwise. Why bloody the reputation of someone who's taking a bullet to get stories for the newspaper? I've asked the Times what's going on, but haven't heard back yet. Update: Marc Santora has written in to let us know he had no involvement, financial or otherwise, with the ad — which just adds to the headscratching.

1. Robert Scoble
2. Michael Arrington
3. Jack Dorsey
4. Biz Stone
5. Matt Cutts
6. Pete Cashmore
7. Dave Winer
8. Guy Kawasaki
9. Loïc Le Meur
10. Kevin Rose
11. Merlin Mann
12. Stowe Boyd
13. Jeff Atwood
14. Jeremiah Owyang
15. Veronica Belmont
16. Kara Swisher
17. Scott Beale
18. Marc Andreessen
19. Ryan Block
20. David Sifry
21. Emily Chang
22. Om Malik
23. Timothy Ferriss
24. Nick Douglas
25. John Battelle
26. David Cohn
27. Louis Gray
28. Tom Foremski
29. Tim O'Reilly
30. Ariel Waldman
31. Matt Mullenweg
32. Dean Takahashi
33. Philip Kaplan
34. JD Lasica
35. Sarah Lacy
36. Brian Solis
37. Charlene Li
38. Rafe Needleman
39. Dan Farber
40. Howard Rheingold
41. David McClure
42. Margaret Mason
43. Jason Goldman
44. Leah Culver
45. Chris Shipley
46. Jackson West
47. Liz Gannes
48. Owen Thomas
49. Adeo Ressi
50. Max Levchin

(Photo from Michael Arrington)

Xeni Jardin: There wasn't some kind of sinister plot here. It's just kind of how we did things. But at the time, I did that for personal reasons, and for a back story that will always remain private.

John Battelle: What's made it so good is that it's kind of an asynchronous jam between four musicians, without being in the same place or looking each other in the eye. Anything that we might change that affects that magic, we really have to think about.

Joel Johnson: The community expected us to react with the speed that they reacted.

David Pescovitz: I'm not going to say — I haven't determined — whether I agree or disagree that Xeni should've unpublished the posts.

John Battelle: Isn't it also the right of the person who put it up to take it down? If you were truly the owner, I think one could argue unequivocally that you had that right. The question is: Do you damage the community in doing so?

And a bonus dance remix:

Xeni Jardin: This is my work, this is my blog. This is not the same thing as Wikipedia or the paper of record. It’s Boing Boing.

(Photo by Bart Nagel)

I'd long thought that Battelle's flip-the-bird photo, used here, was a reflection of his charmingly combative personality. As a founding editor of Wired, which set the tech world on fire in the '90s and helped inflate the bubble, Battelle failed to stack up the tall dollars. He founded The Industry Standard, which sold more pages of advertising than any other magazine in American in 2000 and then went bankrupt in 2001. Battelle, in short, has been adept at chronicling booms, but not profiting from them. Until now.

Battelle is just the latest entrepreneur to cash out before his company goes public, a practice once frowned upon in Silicon Valley. But Federated Media turned profitable last fall, we're told. Being cash-flow positive means never having to say you're sorry. And it also gives entrepreneurs leverage with investors that they never had in the '90s, when building Web companies was much more expensive.

So at last he's earned what they call in the Valley "fuck-you money" — enough money to simply walk away, should a job turn unpleasant. In fact, we hear that's what Battelle is planning to do, albeit temporarily. He's told investors in Federated that he plans to take a leave from the business to work on his next book, The Conversation.

Where Battelle's profane wealth may get him in trouble is with the bloggers he represents. Unlike him, most of them have yet to cash out, or even turn a profit. Federated Media's take of their advertising — typically 40 percent — strikes many as too high, though most have yet to try their hands at hiring and managing their own salespeople.

But they shouldn't worry. Having enriched himself, Battelle is now thinking of them. After hearing rumors that one of Federated's blogs was in merger talks, he approached the blogger and encouraged him to come talk to Federated first before taking an offer.

In other words, Battelle is now contemplating a blog rollup. Rather than see his customers picked off one by one, with their ad inventory walking out the door, Battelle may use some of the money he's raised to buy blogs himself. It only makes sense. He knows his customers' businesses well, since he organizes conferences, orchestrates redesigns, and performs other services besides for them, in addition to the mundanities of selling advertising.

Battelle likes to think of himself as more than just a business partner to his bloggers. He's their buddy. He's their pal! This bubble has everyone frothy, and the valuations may be making some of the bloggers under his care unduly giddy. While Battelle may enjoy a tipple now and then, friends don't let friends sell drunk.

A recent Fast Company article on Andreessen's current venture, Ning, went no better. You can practically hear the writer propping his eyelids open as Andreessen goes on, and on, and on, about "viral expansion loops."

What happened to the Andreessen who once ridiculed Windows as "a set of poorly debugged device drivers"? Why, he's gone online. Andreessen's blog is relentlessly entertaining. His verbal fisticuffs with the New York Times are must-reads; the vitriol oozes out of every line. And he posts just infrequently enough to keep us hanging on every word.

The only surprise, really, is that Andreessen took so long to start blogging. This world was not made for him. In the Web, he created one to suit.

(Photo by mathoov)

The problem with running a network is that you don't own the pageviews, and websites can always bolt, or be sold. It's hard to imagine AOL won't switch that inventory over to its Platform-A ad network as soon as it can. Not all pageviews are created equal. Sphere's blog-search inventory likely garnered less revenue than some of the high-prestige tech blogs Battelle represents. Still, this is the kind of thing one is happier to have investors learn about after they've committed their money, not before.

He saw Wired, where he was a founding editor, sold to Conde Nast for a pittance. The Industry Standard, which he launched and ran, crashed and burned. Federated Media, which caters to independent bloggers like Boing Boing and Dooce, could well be more successful than either, redeeming his reputation as a businessman. And with the economy teetering, now's a good time to take the money and run, before people deepen their questioning of the blog business model. Still, taking that much money from investors now — if Battelle can even get it — only increases the odds of a sale down the road.

It would not be much of a story that Federated is repping Blodget's blog, save for the identity of Blodget's backer: Kevin Ryan, the cofounder of DoubleClick, one of the Internet's first online ad networks. Embarrassing: It seems Battelle knows something about selling ads that Ryan doesn't.

According to a tipster:

-everyone has signed confidentiality agreements
-the whole island of virgin gorda is rented out for the wedding guests
-special times for meals have been requested at little dix bay and olde yard inn
-anyone who had planned and reserved little dix for a vacation have been called and told the resort is suddenly "over booked" and have been bumped.
-all ferries and cars are booked
-all new eco friendly furniture is being shipped in to redecorate
-three presidents rumored to attend
-600 expected to attend

Heard anything else? Please share.