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On the same day that he published a detailed missive about his dire predictions for the online ad market, Gawker Media overlord Nick Denton made public his decision to shut down Valleywag, the blog network’s Silicon Valley gossip title. Valleywag was launched early in 2006.

Valleywag editor Owen Thomas will have his job folded into a column on the Gawker.com flagship title, a gossip blog focused primarily on the New York media industry.

A recession seems like a great time to be running a gossip blog about the tech business, given all the juicy photos of sad, laid-off employees and rumors of badly-behaved CEOs mismanaging their companies that inevitably fly around. But the reason for Valleywag’s shutdown was Denton’s notoriously doom-and-gloom vision of the future–Internet ad spending will decline a full 40 percent, he predicts–and Valleywag was one of the company’s underperforming titles.

It was a tough sell for advertisers, given its niche audience, and many tech companies would be hesitant to advertise on a publication dedicated to ridiculing tech companies. And then there was the fact that you just can’t turn the average Valley exec or VC into a Perez Hilton-style celebrity. The likes of Mark Zuckerberg, Peter Thiel, and Elon Musk simply don’t add up to Britney Spears-like followings.

Reactions in the tech community will probably be mixed. Valleywag is mean, to be sure, but it can also be hilarious, and writers Owen Thomas and Paul Boutin were tech-press regulars long before their Gawker gigs.

Denton’s handling of Gawker has been frugal, continually consolidating resources toward the blogs that were pulling in traffic and ad dollars and not hesitating to shut down the underperformers. In April, Gawker Media sold off three of its smallest blogs, and Denton has now announced that another, Consumerist, is on the block.

Early in October, Denton orchestrated a personnel shuffling that saw 14 percent of the company’s editorial staff laid off but new hires made at some of the most successful titles like gadget blog Gizmodo and feminist chronicle Jezebel.

Also on Wednesday, AllThingsD’s Peter Kafka reporter that Gawker Media managing editor Noah Robischon was leaving for Fast Company.

The MySpace Primetime video app.

(Credit: MySpace)

Now you can put a TV on your MySpace profile–sort of.

The News Corp.-owned social network has built a new widget for its developer platform called “Primetime,” a video player that syndicates much of the professionally created content available on its MySpaceTV media hub. Included in that roster is video from Hulu (a joint venture between News Corp. and NBC Universal), Warner Bros., Sony, and other MySpace content partners as well as the social network’s original video content.

It’s also searchable, and provides another outlet for MySpace’s video ads. Since it’s a developer platform app, it’s not embeddable elsewhere, but MySpace is a partner in the OpenSocial project and therefore could probably syndicate the widget outside its own site without too much tweaking.

MySpace is now encouraging users to embed Primetime on their profiles. It’s only available to members in the U.S., probably because of licensing issues. But the U.S. is MySpace’s biggest market, where 76 million of its 122 million visitors come from.

“The Primetime application highlights how professional video content is being voraciously consumed across the MySpace ecosystem, not just within MySpaceTV,” Jason Kirk, vice president of video and entertainment for MySpace, said in a release Wednesday.

Facebook members can now vote on the second round of finalists for its FBFund seed funding competition, which will give out a total of $225,000 to five grand prize winners. The 25 companies currently in the running have already pocketed $25,000 apiece for the applications they have proposed for Facebook’s third-party developer platform.

This is the second annual FBFund competition, but the first one in which members have been able to vote on their favorite apps. They can vote once per day, and can watch promotional “commercials” about what each one of them does. Voting involves installing an app called “FBFund08,” which members can embed on their profiles.

The 25 finalists run the gamut from multiplayer games to college search to event planning.

Not only is the voting system a way for Facebook to promote and reward high-quality apps, but it’s also a promotional strategy for Facebook to drum up more member interest in the developer platform and prove that some apps are actually worth installing. Some critics say interest is dropping, and the platform has suffered from months of negative press about “zombie bites” and other goofy apps.

Here’s an interesting tidbit: The FBFund08 app was not created by Facebook, but by Wildfire, one of the app development companies in the running for an FBFund grant. Facebook effectively acquired the app from Wildfire to power the poll. But, Facebook representatives assured CNET News, that won’t give Silicon Valley-based Wildfire any unfair advantages.

The $10 million initially invested in FBFund comes from Facebook investors Accel Partners and the Founders Fund.

Arbor Networks found that DDoS attack size (in gigabits) nearly doubled in 2008 from the previous year.

(Credit: Arbor Networks)

Internet service providers now spend most of their IT security resources detecting and mitigating distributed denial-of-service attacks, concludes a report from Arbor Networks.

The fourth edition of the Worldwide Infrastructure Security Report, released Tuesday, was based on how 70 lead security engineers responded to 90 questions. As in the previous three reports, ISPs reported attacks where their networks were overloaded with packets, what’s called a distributed denial-of-service (DDoS) attack. However, this year, the ISPs indicated the attacks were not only larger in size but that most of them were stretching the upper limits of their security resources in order to deal with such attacks.

Rob Malan, founder and chief technology officer of Arbor Networks, said the DDoS attacks seen this year broke the 40-gigabit barrier, nearly double the volume of last year’s attacks. He warned that if next year’s attacks again double in size, “most carriers will be unable to deal with those attacks.”

In assessing the attacks, Arbor Networks found “brute force,” a catch-all term, was the dominant method used. The security firm looked at traditional means of DDoS–syn flood, udp flood–as well as anything else that artificially created network congestion. Malan told CNET News that despite the massive size, the attacks themselves demonstrated “little sophistication” and were simply “trying to overwhelm network bandwidth.”

One consequence of this method was that upstream providers of the targets were increasingly being affected. “If an attacker takes out capacity of (the upstream) routers you’re (also) starving the target,” he said. Malan said attackers were also using reflective attacks, which use different pieces of DNS structure to redirect traffic away from a target.

While flood-based attacks represented 42 percent of the attacks reported, followed by protocol exhaustion-based at 24 percent, Arbor Networks also saw a sharp increase this year in application-based attacks, which accounted for 17 percent of the attacks.

Malan explained that with application-based attacks, bot-infected computers worldwide make connections to a targeted site, then “use an application protocol to deliver a perfectly valid request, not a vulnerability, not something that an IDS or other type of firewall would necessarily flag.” For example, a botnet might instruct its zombie computers worldwide to do a back-end query off a database. “By itself it’s not bad, but if you have multiple such requests, then you tie up the application–in this case database–resources on the back end,” he said.

The report does contain some good news. Arbor Networks found detection and mitigation of these attacks to be increasing as well. Fifteen percent of the respondents said, on average, they can mitigate an attack within 10 minutes of detection. However, 30 percent said mitigation still takes them over an hour.

But finding the criminals responsible for these attacks is not a high priority. Arbor Networks found that ISPs have little time to involve law enforcement. “It’s hard on carriers,” said Malan. “They get paid on traffic, not to do forensic analysis. So it’s hard from their perspective to make the economics work.”

(Credit: Arbor Networks)

There’s a big Wall Street Journal piece on Tuesday about how MySpace is still seriously beating Facebook in the advertising and marketing game, regardless of the fact that Facebook has started to breeze past it in traffic.

This is one of those stories geared toward the Journal’s less technical readers, undoubtedly, since most of the details are no surprise to social media junkies. But the take-home point is a good one: Big media ownership has been helpful to MySpace, whereas the independent Facebook is still learning the advertising game.

MySpace is owned by News Corp. (which also owns the Wall Street Journal) and hence has much deeper and more established connections to Madison Avenue. MySpace is also more heavily reliant on traditional display ads, whereas Facebook has chosen to take a more difficult route with “engagement ads,” announced in August, and other forms of “social advertising.” It’s part of CEO Mark Zuckerberg’s continual mantra of “focus on innovation and the profits will come eventually.”

But Facebook had some notable success recently with a Ben & Jerry’s “engagement ad” on Election Day. The ice cream company sponsored an event RSVP that appeared on Facebook’s home page, where members could respond “yes” or “no” to its Election Day offer of free ice cream for anyone who voted. RSVPs from friends would show up in members’ news feeds, meaning more exposure for Ben & Jerry’s. And if the snaking line I saw outside a Ben & Jerry’s near NYU last Tuesday night was any indicator, the marketing effort worked.

In other words, this advertising race isn’t over yet.

Girly blog company Sugar Inc. has announced a new affiliate marketing program for bloggers, based on ShopStyle, the social-shopping and product-search site that it acquired last year. It’s called ShopSense.

Here’s how it works: if style, culture, or shopping bloggers write about a given product that’s in the ShopStyle directory, they can add a ShopStyle widget so that readers can actually buy the product or can use the ShopStyle API to further customize the app. The blogger gets a cut of the revenue.

Sugar started as a content company, with an inaugural celebrity gossip brand called PopSugar, but has recently expanded significantly into services for other bloggers–furthering the comparisons with Glam Media, the ad network and blogger services company that started with fashion and celebrity news sites but has since moved into more diverse cultural niches.

Sugar recently started allowing bloggers to use its own platform, OnSugar but has said that the affiliate program is open to anyone regardless of how they host their blogs. It is, however, directly integrated into OnSugar.

“Given the current state of the economy, and with the holiday season fast approaching, we are excited to open up a new revenue stream for fashion bloggers and developers alike,” said Sugar vice president Andy Moss, who’s in charge of ShopStyle. “With ShopStyle’s breadth of products and beautiful images, ShopSense has the ability to provide significant income for its participants.”

One snag: Given the current state of the economy, is anybody going to cough up the cash for that pair of Louboutin heels?

There’s finally an end to the speculation over what former Facebook exec Owen Van Natta would do next: he’s taken the job as CEO of a site called Project Playlist, according to Kara Swisher of AllThingsD.

He had already been an investor in the music discovery company, and there have been blog reports about his new gig for several weeks now.

The move comes shortly after Van Natta withdrew his offer to take the CEO position at MySpace’s new music venture. All signs now point to MTV exec Courtney Holt to take that job, but no formal announcement has been made.

AllThingsD confirms what many had figured: Van Natta, in his quest for a CEO position, wasn’t interested in taking a job at a venture run by the News Corp.-owned MySpace. That’s not quite a start-up, no matter how trendy its office space might be.

The start-up Project Playlist has snagged a hefty round of financing led by former AOL exec Bob Pittman’s Pilot Group investment firm–probably somewhere between $18 million and $20 million, Swisher wrote.

The New York-based Pilot Group stays low-key, but it already has a stake in a growing social-media site, Buzznet, which focuses on music and other pop-culture content and has an additional investment from Universal Music Group. The firm was the majority owner of DailyCandy when the women’s events newsletter site sold to Comcast for about $125 million earlier this year.

As for Project Playlist, it’s a lot like Imeem or the ill-fated Muxtape: members can build playlists and embed them across the Web. The site was sued by the RIAA back in April. Like Muxtape, it’s fairly stripped-down, but a ticker at the top of the page says that over 38 million playlists have been created.

Van Natta stepped down from his role at Facebook amid, naturally, plenty of rumors. He left the company in February as chief revenue officer, after having previously been chief operating officer, which some bloggers speculated was a demotion. When he left, he made it clear that he wanted a CEO post somewhere–which set off even more speculation that Van Natta had wanted Facebook CEO Mark Zuckerberg’s job, and left when it looked like there was no chance the young founder would step aside. That’s unconfirmed, of course.

The issue with a company like Project Playlist? Aside from its RIAA woes, which are pretty much protocol in the music business, the “music discovery” niche is clogged beyond belief. There’s Imeem, streaming radio site Pandora, iLike and its popular Facebook app, and Last.fm (owned by CBS Interactive, which publishes CNET News). Even Apple’s iTunes now has its “Genius” discovery sidebar, and MySpace Music is a high-profile new entry in the field. Even Van Natta’s old company, Facebook, is rumored to be interested in doing more when it comes to music.

“Discovery around music is exploding on the Internet,” Van Natta told AllThingsD when he spoke to Swisher about his new hire. “And the company that does the best job of taking advantage of that is really going to be huge.”

Well, let’s hope he picked the right one.