Costs alone don't explain the leadership change. Incoming CEO Eric Hippeau, of Softbank, replaces Betsy Morgan, deemed less capable of growing the Web publication. Morgan was largely ineffectual, one former staffer said. "Generally ignored," said another insider, excepting those occasions when one was across from the former CBSNews.com manager at one of her long lunches.

Huffington, for the record, told us she "loved working with Betsy." That's to be expected, if you believe former staff: Morgan didn't fight Huffington on spending, we're told, but others on the business side have been pushing back for some time, on expenses ranging from new assistants to new computers to travel, accommodations and miscellaneous hiring

The board of directors, nominally in charge of business operations, clashed regularly with Huffington, a HuffPo insider said. "There were moments when the board would say, 'Absolutely no more spending and hiring,' and that would be violated.'"

Arianna is always hiring tons of people — five people to do the job one expert could do.

It doesn't help matters that Huffington has repeatedly used employees for personal errands, according to former staff. Throw in the recession and the earmark on HuffPo's recent $25 million capital round — it's reserved for expansion — and it's easy to see why costs might be an ongoing conern.

Huffington, though, insists there's been no problem whatsoever. "There has never been any concern about expenses," she wrote in an email.

The image associated with this post is best viewed using a browser.As if to underline the point, she confirms a bit of news about HuffPo's ongoing expansion into local markets: Helming the Huffington Post's forthcoming New York edition is Dan Collins, the hard news producer of CBSNews.com and husband of New York Times columnist Gail Collins.

The local HuffPo launches at the end of this month with help from Katherine Zaleski, 27, who for the past four years has been gatekeeper over the HuffPo's front page. Zaleski, whose father is said to be good friends with HuffPo founder Ken Lerer, has become Senior Editor for Special Projects.

Morgan joined HuffPo in October 2007 after working as general manager at CBSNews.com. As CEO, she served on the HuffPo board along with Hippeau, Arianna Huffington, co-founder Kenneth Lerer and Fred Harman of Oak Investment Partners, which in December put $25 million into the internet publication.

The image associated with this post is best viewed using a browser.That deal converted HuffPo's election buzz and traffic into dollars, signaling that the publication was entering the media big leagues. Another key development was an investigative reporting grant, accompanied by the influx of veteran editors from other publications, including one from the Washington Post.

It's been unclear whether the recent growth was compatible with founder Huffington's often volatile and always idiosyncratic management style; today's turnover could be a sign that HuffPo's investors demanded closer supervision — or, less climactically, simply wanted Morgan out.

UPDATE: HuffPo confirms, in a statement that pointedly notes, "The Huffington Post co-founders Arianna Huffington and Kenneth Lerer made the announcement" of Morgan's departure and not, say, Softbank. Morgan, meanwhile, pointedly notes that she's leaving with some shares of the company.

Huffington's quote:

Having worked closely with [Hippeau] for the last three years, I know firsthand what an invaluable asset he has been in our expansion. And now, given his impressive background in the industry and his intimate knowledge of HuffPost, Eric is uniquely able to hit the ground running as the company takes its expansion to the next level.

Hippeau was CEO of tech publisher Ziff Davis from 1989-2000 and serves on the board of Yahoo. At Softbank, he's a managing partner.

(Pic: Top via PaidContent, bottom via TechCrunch)

He certainly has the motivation: revenge — and the success which is its best form.

Van Natta joined Facebook when the startup was an also-ran site, limited to college kids and run by college dropouts, and steered it through a period of hypergrowth. He was a key negotiator behind an advertising deal with Microsoft which provided Facebook with a solid financial footing as its user numbers blew up. His payback? Founder Mark Zuckerberg demoted him gracelessly in August 2007, and left in February 2008 — the first of many high-profile departures by executives who had fallings-out with Zuckerberg.

He then spent months hanging out and vacationing before joining a Palo Alto music startup he'd invested in, Project Playlist, as its CEO. Playlist's music widget for social networks had been banned by both Facebook and MySpace as it feuded with the major labels, and while he didn't manage to get it reinstated on either site, Van Natta did strike a deal with EMI.

Deals are what Van Natta built his reputation on. He spent seven years at Amazon.com, ultimately becoming its vice president of worldwide business development. Before that, his LinkedIn profile offers few details. There's a six-year gap between his 1992 graduation from the University of California at Santa Cruz with a BA in English and American literature and his 1998 arrival at Amazon.

Here's what we've reconstructed of his background: CNET editor Charlie Cooper recalls him being a sales intern at Computer Shopper in the early '90s. By 1996, he was working at Softbank Expos, a conference organizer. He then joined Zip2, a now-forgotten dotcom started by Elon Musk, now the CEO of Tesla Motors, and became its senior director of network advertising. In 1998, he joined PlanetAll, a nascent social network, as its VP of sales, shortly before it was acquired by Amazon.com.

What this alleged Internet studmuffin's resume tells us is that he's a smart opportunist. Is that what MySpace needs? It has certainly missed enough opportunities along the way. The other skill Van Natta's noted for is the ability, rare among slick suit-wearing dealmakers, to be tolerated by engineers. MySpace has never been a technology-driven company, and that flaw finally caught up with it over the past couple of years.

If Van Natta plays to his past reputation and just cuts some flashy deals, he'll solidify his reputation as a dilettante dealmaker, and doom his career. If he woos the right talent to MySpace and turns the place around, he'll prove he deserves to be a CEO — and rub his success in the face of a certain snotnosed punk in Palo Alto.

Gator had changed its name to Claria, and raised some $40 million to launch a personalized homepage which never caught on. In the sneakiest move of all, it then raised $11.5 million under a new company name, JellyCloud, with the same set of executives as Claria — Scott Vandevelde and Scott Eagle among them. Was Jellycloud just Claria reborn? It's now a moot point, if our tipster's report is accurate. And a painful mistake for US Venture Partners, SoftBank, Sand Hill Capital and Crosslink Capital — who have managed to lose $11.5 million in just five months.

There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again.

Go check out the rest of Facebook's foreign knockoffs at Forbes.

No, the problem for Facebook is the appearance of a well-funded competitor in a market Facebook has yet to crack. Entering the China market is a key reason why Facebook took money from Hong Kong telecom mogul Li Ka-Shing. (Ironically, Accel Partners, an early backer of Facebook, also invested in Oak Pacific.)

It would be foolish for Facebook to go out and raise more money simply to match Xiaonei's bankroll; equally foolish to entertain thoughts of buying the company at such a high valuation. No, Facebook's only reasonable choice here is to redouble its efforts to expand into the Chinese market. Engineers who speak Mandarin but have been rebuffed on previous attempts to get into Facebook might find its recruiters more hospitable now.

In the U.S., 7/Eleven is one of many convenience-store chains. In Japan, it's an iconic retailing powerhouse — and it has owned 7-Eleven in the U.S. for 18 years.

Another model: The Seagate-Veritas deal. Seagate, a hard-drive maker, owned a large chunk of Veritas, a storage-software company it had spun off. In a $20 billion deal, Silver Lake took Seagate private, swapping out Seagate shares for Veritas shares. Similarly, Yahoo Japan could unlock its shares held by Yahoo by swapping them for a large equity stake. Complicated, but not inconceivable, especially if private equity injects some cash — and money managers might be keener on a direct stake in Yahoo Japan than in the U.S. operation.

The key to such a deal would be Softbank, which owns 41 percent of Yahoo Japan. Softbank CEO Masayoshi Son has close ties to both Microsoft chairman Bill Gates and Yahoo CEO Jerry Yang, who sits on the board of Yahoo Japan.

Softbank also owns 3.9 percent of Yahoo, but it also owns, as does Yahoo, a large stake in Alibaba, the operator of Yahoo China. Alibaba's management is reportedly restive about the prospect of Microsoft getting a say in their affairs. Softbank might throw its Alibaba stake into the combination, which would give Alibaba an exit in the public markets without the risk of an IPO, and the new Yahoo majority control of its Chinese websites.

Making the numbers work, especially when Microsoft could easily raise its bid, is a challenge. In some ways, selling out to Yahoo Japan would be as humbling to Yahoo's management as selling to Microsoft. But while Tokyo is more distant than Redmond, I suspect the cultures are more compatible.

The fundamental logic of Microsoft's bid is that it can do more with the Yahoo brand than Yahoo itself can. Many doubt Microsoft will actually manage that. Yahoo Japan has proven it can.