That has to be unnerving, but I can at least offer a little bit of comfort: The worst-case scenario the employees would be facing had they been purchased by private equity firm ZelnickMedia, which was also bidding for the publication.

The short version: Almost everybody gets fired.

Here’s the longer version of the plan, provided to me by a person familiar with ZelnickMedia’s bid. It sounds like a plausible idea for a PE group that specializes in turning around distressed assets–and a chilling one for anybody who draws a paycheck at BusinessWeek:

• Wind down BusinessWeek’s print business “as profitably as possible”–the company would have to honor existing subscriptions and could still sell ads in the magazine. But the focus would be on building up BusinessWeek’s Web site, which has a decent-sized footprint, though not a huge one.
• Dump almost all of the company’s newsgathering staff and outsource most of that work to Thomson Reuters (TRI).
• Employ a small handful of editorial employees–perhaps 20, down from the 200-plus who are there now. Some of them would run a Huffington Post-style aggregation site that produces no original content, and some more expensive hires would produce a smattering of high-quality reporting and writing designed to burnish/sustain the BusinessWeek brand. “Just to give it uniqueness and sizzle,” my source tells me.
• Dump most of the existing business side, as well, but overhaul and bulk up the sales force.

The insult-to-injury kicker: Under ZelnickMedia’s proposal, the buyer wouldn’t pay a dime for the publication it intended to rebuild. Instead, McGraw-Hill would pay the fund to take the publication off its hands. If that sounds implausible, consider that McGraw-Hill just announced that it will save up to $25 million next year by not owning the title.

Given the above terms, it’s easy enough to see why McGraw-Hill ended up going with Bloomberg. For starters, the winning bidder actually paid cash for the magazine, and McGraw-Hill will end up netting a $5.9 million gain, after taxes, on the deal.

Also important: McGraw-Hill won’t have to anguish as it watches one of its flagship properties get dismantled.

So what will happen to BusinessWeek now that Bloomberg owns it? Nothing nearly so drastic, at least in the short term. For now, Bloomberg is talking about bulking up the title, not shredding it, so that’s a good sign for both employees and readers.

Alas, Bloomberg can’t take on all of the magazine employees looking for jobs, and that pool is only going to get bigger.

Forbes slashed deep into its staff this week, and next week Time Warner’s (TWX) Time Inc. will lay out some of its layoff goals. I’ve heard Time Inc. employees refer to layoff plans as “tree-trimming” or “surgical,” but I think the trimming will feel much blunter to the folks who lose their jobs. The publisher’s cost-cutting plans include hundreds of layoffs–something likely similar to the cuts the publisher went through last year, I’m told.

The New York Post’s Keith Kelly reports today that Time’s News and Finance unit, which includes Time, Fortune and Sports Illustrated, will be particularly hard hit, and I’ve confirmed that myself.

UPDATE: No surprise here: BusinessWeek President Keith Fox is stepping down. Mild surprise: He’s staying on at McGraw-Hill. Here’s his memo:

When we announced that McGraw-Hill was exploring strategic options for BusinessWeek, I promised to communicate with you as openly and often as I could. In this spirit, I wanted each of you to know that I will be remaining with McGraw-Hill after the deal with Bloomberg is closed. I will continue to play a role in the integration post-close and plan to take on a new role at McGraw-Hill in 2010.

During this process, our collective goal was to find the best buyer for BusinessWeek. I am proud that I played a role in ensuring that BusinessWeek has a new home at Bloomberg, where it will thrive under the leadership of Norman Pearlstine. I am committed to the transition and helping in any way that I can.

It’s been a privilege to be the President of BusinessWeek. I thank Terry McGraw for his confidence and trust in me and Glenn Goldberg for his support, direction, clarity, and sense of humor. I’ve also been a member of an amazing team which has navigated the transformation of the media environment with agility, focus, passion, and integrity.

The team–Steve Adler, Jessica Sibley, Tania Secor, Linda Brennan, Roger Neal, and Carl Fischer–is the best in the industry. Like BusinessWeek, they have bright futures ahead of them. I will miss the daily interaction, but I am wiser (and a little grayer) because of their collaborative spirit and desire to make BusinessWeek the global leader in business that it is today.

I also have a special thanks to Patricia Hipplewith, my assistant, who juggled my calendar, protected me from solicitors, and kept me on schedule and well fed! She is the personification of commitment and integrity.

I am humbled by BusinessWeek’s 80-year history. Thank you for allowing me to play a small part in it.

Keith

Cheers to the paper for allowing itself to be savaged by “Daily Show” correspondent Jason Jones. I particularly enjoyed watching Executive Editor Bill Keller gamely explaining the news business while managing to get a dig into Google (GOOG), The Huffington Post and Drudge Report.

Crave more? Here’s an interview The Wall Street Journal’s new “Speakeasy” blog conducted with Jason Jones about the bit. Excerpt:

How’s the mood at the Times these days?

Edgy? No. It was really quite lovely. Let me tell you this, movies have severely misled me on what newspaper rooms should look like. There was no paper stacked six feet high on people’ desks. No one’s yelling stop the presses.

What are people up to over there?

I think people are using the Internet to look for new jobs. There are lots of great Web sites out there: Monster.com; Craigslist is great.

Time for some image repair, don’t you think?

The AP is trying to do this at this very moment by distributing an 11-point FAQ that attempts to clarify exactly what it’s thinking. But that document is still a little vague and overly formal. Good thing I got on the phone yesterday with the pleasant Jim Kennedy, who oversees strategic planning for the AP and who speaks in clear, concise English.

Much of what we talked about was a rehash of what we talked about Monday afternoon, when AP Chairman Dean Singleton first riled everyone up with his “mad as hell” speech. But given the rampant confusion of the past few days, I thought it was worth going over again. Some excerpts from our chat:

On the AP’s plans to chase down people who “misappropriate” its content: Kennedy stresses that the news organization isn’t planning on creating a Wall Street Journal-style pay wall around its content. And it’s not concerned about bloggers who link to its stories. His beef is with sites that are reprinting AP’s stories on a regular basis without paying for them. “The activity that we’re trying to limit is the systematic harvesting of news without trying to license it,” he says. “The people who are building a business by taking the content and trying to recreate a news report. That’s what we’re trying to address. We’ve had success doing this.”

On the AP’s plan to promote its work more effectively. This has been construed in some quarters as a plan to create a search engine or news portal. But it’s really just an attempt to upgrade the AP’s search engine optimization strategy–that is, trying to get its stuff to show up higher on Google’s (GOOG) search results. It will do that via “search pages,” or “topic pages,” which are par for the course in the Web world. Check out this New York Times (NYT) page on Somali pirates, or this Huffington Post page on newspapers, and you’ll get an idea of where the AP is going.

If the search page plan works, the pages will be generating plenty of page views when people land on them, and it’s possible that the AP will sell ads on that inventory, Kennedy says. But their real function is to shuttle searchers to the original source material from the AP’s members.

On the AP’s beef with Google: It’s real. But many of the stories published this week conflated the AP’s gripe-essentially, that it’s not getting paid enough by the search engine for the use of its content–with its saber-rattling against aggregators who aren’t paying the AP at all. The AP may indeed end up suing people in the latter group. But it plans on resolving its Google problem with a new contract that will replace the one that expires this year.

Kennedy is vague when it comes to specifics about the Google contract and what he’d like changed: “It’s just a reevaluation of the situation,” he says. But he’s clear that the company intends to keep working with the world’s largest Web site. “When we’re talking about Google, we’re talking about our future business relationship,” he says. “When we’re talking about misappropriation, we’re talking about people who have never contemplated a business relationship with us.”

On the confusing message that the AP presented to the world this week: Guilty as charged, says Kennedy. But he argues that his group has indeed given some thought to what it’s doing, even if it hasn’t communicated that clearly to date. “The future is going to be a lot different than the present and the past on the Internet, and we’re trying to get ready for that process,” he says. “To the untrained eye it looks like we’re stupid. But we’re looking forward to a totally new space where we have to get ready to do things in a totally different way. We’re trying to be smart business people and we’re trying to stay in business.”

The Associated Press is fed up with… the Internet, apparently. And it’s going to do… something about it.

At the news-gathering co-op’s annual meeting today, AP chairman Dean Singleton let rip a sort of hellfire-and-brimstone speech in which he announced the AP’s vague plans to stop unnamed scoundrels from making money from their work.

The relevant bit:

“[The AP's board has] unanimously decided to take all actions necessary to protect the content of the Associated Press and the AP Digital Cooperative from misappropriation on the Internet.

The board also unanimously agreed to work with portals and other partners who legally license our content and who reward the cooperative for its vast newsgathering efforts–and to seek legal and legislative remedies against those who don’t.

We believe all of your newspapers will join our battle to protect our content and receive appropriate compensation for it.

AP and its member newspapers and broadcast associate members are the source of most of the news content being created in the world today. We must be paid fully and fairly.”

If this sounds like the AP is riffing off the famous speech from “Network,” that’s not an accident. In fact, Dean Singleton does indeed quote the movie’s Howard Beale in his remarks: “We can no longer stand by and watch others walk off with our work under misguided legal theories. We are mad as hell, and we are not going to take it any more.”

In theory, Singleton and the AP are talking about a wide range of sites that profit by repurposing someone else’s content, from down-and-dirty “scraping sites” to the much more refined (and useful) Huffington Post, to… I don’t know.

But now it’s become much clearer why News Corp. CEO Rupert Murdoch singled out Google (GOOG) in remarks he made at a cable industry convention last week: The news guys have decided that the search engine has now become public enemy No. 1. That makes a sort of sense: If you’re going to go after someone, pick the guy with the deepest pockets.

And look. Unlike some of my bloggy colleagues, I don’t think that the people who pay to produce content are insane to complain about getting ripped off by aggregators of all stripes.

The thing is, even if the news guys somehow stopped people from using Google to find information they need, it wouldn’t do anything to solve the essential problems plaguing their business. Such as:

• An overabundance of undifferentiated, commodity information.
• The wholesale evaporation of classified advertising and local retail advertising.
• Investors who paid too much for newspapers and other media assets during the last 10 years, using too much debt.

Anyway, I’m looking forward to hearing more about the AP’s plans, vaguely referred to in this press release as developing “a system to track content distributed online to determine if it is being legally used…” and including “the development of new search pages that point users to the latest and most authoritative sources of breaking news.”

You mean, they’re going to build their own search engine? That can’t be right. But if I hear back from the AP folks, I’ll try to get them to explain.

UPDATE: Thanks to Jim Kennedy VP/director of strategic planning for the AP, for teasing some of this out for me. Here’s what the AP is thinking:

• Kennedy confirmed that some of the AP’s ire is indeed aimed at Google, and that the drum-beating has a purpose. The search engine has a deal with the AP that expires at the end of this year, and the AP is setting the table for upcoming negotiations. Their main contention: Google is already using AP content in ways that aren’t covered by the existing agreement, and the AP wants to be compensated for them. Expect to hear lots more about this in future months.
• The AP’s “stick” approach is aimed at Web aggregators: It plans on “fingerprinting” its content so it can track where its stuff is showing up and how it’s being used. If it’s being misused, it has an array of options that start with a takedown notice and end with legal remedies.
• The AP’s carrot approach is aimed at Web surfers: It will become an aggregator of its own content. Specifically, it plans on building search engine-friendly Web pages built around specific topics — say, “Fargo floods” or “Michelle Obama” — composed of links that direct readers to AP stories. The idea is to get the pages to show up high in a Google search, alongside, or higher than, similar pages from Web aggregators who are doing the same thing — like Wikipedia, Huffington Post, BusinessWeek, Mahalo, and on and on and on. Kennedy says it has built prototypes of the aggregator pages and plans on rolling them out in the second half of this year.

Meanwhile, note to the AP folks: You are aware at Howard Beale gets shot to death at the end of the movie, right?

Bear with me, because it’s a bit knotty: Last week, Friedman, a gossip columnist for News Corp.’s FoxNews.com, wrote up a glowing review of “X-Men Origins: Wolverine,” the newest X-Men movie from News Corp.’s 20th Century Fox studio. The problem is that the movie won’t be released until May, and Friedman was reviewing an unfinished “work copy” that got leaked to the Web last week amid much hubbub.

And the real problem, according to Friedman’s employers, was that his review appeared to endorse online movie piracy. So he’s been fired.

Or has he? News Corp. (NWS) officials say he’s already gone. Here’s their official statement:

“Roger Friedman’s views in no way reflect the views of News Corporation. We, along with 20th Century Fox Film Corporation, have been a consistent leader in the fight against piracy and have zero tolerance for any action that encourages and promotes piracy. When we advised Fox News of the facts they took immediate action, removed the post, and promptly terminated Mr. Friedman.”

But Fox News’s statement is more circumspect and less specific: “This is an internal matter that we’re not prepared to discuss at this time.” I haven’t heard back from Friedman yet, but last night he was telling Variety that he hadn’t been canned.

We should know more soon: A person familiar with the matter told me that Fox News officials will be meeting to discuss Friedman’s fate this morning. The Huffington Post and Gawker have heard the same thing. No idea whether this is just a formality, necessitated by the fact that the scandal broke over the weekend, or whether Fox News chief Roger Ailes is really considering keeping Friedman on. I’ll update when I hear more.

UPDATE: It’s official. Friedman is out. Per Fox News: “Fox News representatives and Roger Friedman met today and mutually agreed to part ways immediately.  Fox News appreciates Mr. Friedman’s ten years of contributions to building foxnews.com and wishes him success in his future endeavors.  Mr. Friedman is grateful to his colleagues for their friendship and support over the past decade.”

Until then, I encourage anyone who’s interested in this to head to RopesofSilicon.com and check out Friedman’s original post, which Fox News has now taken down (you’ll need to zoom in with your browser to make the thing legible). I see why Friedman’s employers (who are ultimately my employers too since this site is owned by News Corp.’s Dow Jones) are arguing that his column “promotes piracy.” It does wax on about how easy it is to watch pirated stuff on the Web these days.

But since he’s obviously not the first person to note that–I don’t think we can even call it an open secret at this point–I’m wondering if there isn’t something else at work here. Anyone have any bright ideas?

Meanwhile, here’s a preview of the film. Go ahead, and press play if you’d like–it’s officially sanctioned.

Two thoughts on the Huffington Post’s newly announced $1.75 million “Huffington Post Investigative Fund”:

• It took a while, but Arianna Huffington has finally agreed to start paying her writers. Not the army of bloggers who contribute to the site, mind you. But the fund’s money is earmarked for “10 staff journalists who will primarily coordinate stories with freelancers,” she tells the AP. I predict that they’ll also have to hire an admin to deal with the deluge of pitches and resumes.
• The fund won’t solve the gaping hole opening up in American journalism: The disappearing beat writers who used to cover important but unsexy topics day in and day out, like health care, education or municipal government. But it does provide a nice parallel for the role of “investigative journalism” at most newspapers over the past couple decades: specialized, high-profile projects that didn’t have a commercial payoff and were underwritten by the papers’ other sections.

And one other thought: It’s easy enough to be cynical about this venture, but a lot of it sounds appealing, at least in theory. I’m particularly interested in the notion that the fund’s output “will be free for any media outlet to publish simultaneously.” Look forward to seeing the results.

The Times is still struggling to figure out how to adapt its business model to the Web era. But it seems to have have embarked on a campaign against after sites that lift too much of its content–a strategy that chairman Arthur Sulzberger Jr. alluded to in a speech last week.

The Times has already had reached out to aggregators Newser, the Huffington Post and Silicon Alley Insider to complain about various incidents. In the case of Newser, it sent a boilerplate letter threatening legal action.

The latest example: Apartment Therapy, a New York-based design/consumption blog network, says the paper has sent it a takedown notice, citing the Digital Millennium Copyright Act, demanding that the site remove “all the pictures we’ve blogged from them in 2009.”

In a post, co-founder Maxwell Gillingham-Ryan complains that the Times doesn’t understand that his sites reprint the paper’s photos because they think they’re great.

“We’ll fully admit to loving their pictures, but we’ve been very conscious to never take too much from them, only blogging a visual “taste” of an article and then pushing readers to get the rest on their site. In other words, our editorial policy has been to quote, not appropriate, just like we were all taught in high school.”

Times spokeswoman Catherine Mathis declined to comment.

I can already hear the blogosphere getting ready to denounce the paper for “not getting” the “culture” of the Web, where everybody reposts everyone else’s work, and everyone in the “link-based economy” benefits. But like the Newser incident earlier this year, this one seems pretty clear: The paper doesn’t want other people–or at least commercial sites–using its photos without permission.

He’s right. But Stelter’s piece doesn’t mention one of the publishers that has been increasingly vocal about aggregators–his bosses at the New York Times.

Over the past few months, the paper has reached out several times to aggregators for a variety of offenses, and asked them to cut it out. To date, the Times hasn’t done anything more threatening than mailing a formal letter. But some other publishers, who see the Times as a leading voice for “old media” institutions on the Web, are hoping they might.

• In November, Times officials angrily complained to executives at the Huffington Post after that site republished a complicated graphic the paper had created for its coverage of the 2008 elections. HuffPo CEO Betsy Morgan says the issue was resolved, and that she considers the paper an “important partner.”

• The paper has also complained to Silicon Alley Insider editor Henry Blodget this year after he excerpted one of its stories at length. Blodget refers to the incident in a post he wrote today about the site’s excerpting policy: “We have been publishing for 20 months now–more than 25,000 posts–and we have been asked to shorten excerpts only twice. (We did so immediately.)” (Disclosure: I am a former employee of the site’s parent company, Silicon Alley Media, and own a small number of shares in the company.)

• In February, the Times complained to Michael Wolff’s Newser aggregator about the site’s use of a Times photo and its continued use of the paper’s iconic “T” to identify Times stories it summarizes. Wolff says he’ll stop using the logo if the paper insists.

Does any of this represent a concerted effort by the Times to dissuade sites from linking to and excerpting its copy? I asked spokeswoman Catherine Mathis this last week, and she demurred: “We are not taking a different stance toward aggregators,” she said, via email.

That hasn’t stopped other Web publishers from wishing the paper would do so. They’re hoping that the Times, which publishes the world’s best-read online newspaper, will somehow lead a charge to make it harder for aggregators to use their work.

Keep dreaming. Even if the Times wanted to do bottle up its content, it couldn’t–like it or not, information really does want to be free on the Web, no matter how much it costs to create it. And I get the impression that the paper’s executives, who are frequently lampooned as clueless dinosaurs who “don’t get” the complexities of the Web, understand that.

You can, however, effectively control how quickly the bulk of your proprietary stuff gets released to the public, if you really want to. That’s what The Wall Street Journal (owned by Dow Jones, the News Corp. property that also owns this site) has effectively done so far with its free/pay hybrid model. And the Times may one day try a version of that–again–itself.

I do take exception to the notion that this was the first time this had ever happened: Doesn’t anyone remember Jeff Gannon of Talon News, who lobbed those piercing questions at George W. a few years ago?

But in any case, the distinction between new/established online/offline news organizations is melting away very rapidly, whether anyone likes it or not. And, really, as Jon Stewart ably explains, who cares?

Pittman’s Pilot Group Ventures has already taken flyers on two of these things–DailyCandy, a shopping/events guide for cosmopolitan ladies, and Thrillist, a DailyCandy for the ladmag set. Now he’s done it again: He’s invested money in VitalJuice, a DailyCandy for fitness fans. Terms weren’t disclosed, but I’m told that Pilot invested $1 million in the company.

The New York-based company started up in the spring of 2007 and now has 50,000 subscribers; that number should increase as the company launches versions of the newsletter targeting Los Angeles and New York. Co-founder Amanda Freeman told me that she and partner Lisa Blau liked the DailyCandy model and thought it would work well for fitness and wellness tips.

“We felt that email was the perfect kind of delivery for this kind of content,” she says. “If you had a disease, you’d look up something on the Web. But healthy living isn’t something you seek out.”

I don’t know how much convincing Pittman required, but if anyone is a believer in the model, he is: He invested something like $3 million in DailyCandy in 2003 and sold it last summer to Comcast (CMCSA) for $125 million. It’s the biggest win to date for Pittman, who is well into a third career as a private media investor following earlier stints at Viacom’s (VIA) MTV and as one the major players during the ill-fated AOL-Time Warner (TWX) saga.

Some of Pilot’s other high-profile deals include stakes in Huffington Post and Project Playlist.

Because they can, of course. And because the presidency-to-be has already provided a short-term boost for media companies who’ve been able to feed the public’s appetite for all things Obama. The New York Times, for example, says it generated $2.3 million in much-needed extra revenue via the sale of its commemorative election day edition and other paraphernalia.

So it will be nearly impossible to boot up your browser on Tuesday and not end up watching a live stream of the pomp and circumstance; the actual swearing-in ceremony is scheduled for noon Eastern Standard Time.

But just in case your online venue of choice gets the hiccups, here’s a list of sites that promise to provide coverage; I’ve also embedded a stream from Hulu (which is using the Fox broadcast’s feed) at the bottom of this post if you’d prefer to stay right here.

I’m sure I’ve probably missed several dozen options: If you’ve got a site you want to add to the list, do so in comments below or contact me at peter@allthingsd.com or via the blind tip box here.

Presidential Inauguration Committee (Microsoft-haters beware: This stream will require the company’s Silverlight player)

Joint Congressional Committee

New York Times

Washington Post

ABC News

CNN (features obligatory Facebook tie-in)

C-SPAN

CBS News

MSNBC

Fox News

Joost (Joost would like to point out that unlike some of the options listed here, its feed will be available for  international audiences).

Current TV (features obligatory Twitter tie-in)

Livestation (requires download; player allows viewers to flip between coverage from Al Jazeera, C-Span, BBC, euronews, France 24, Russia Today).

One major video outlet that apparently won’t be streaming the event live: The biggest–Google’s (GOOG) YouTube. But YouTube’s Inauguration Channel is serving up plenty of video during the run-up.

And if you couldn’t score tickets to the Huffington Post’s pre-inaugural ball Monday night with the likes of Tom Hanks, Steven Spielberg and, um, Ashton Kutcher, don’t fret: The news aggregator promises to provide both live video and live blogging of the event.

ComScore says that traffic to the joint venture between News Corp.’s (NWS) Fox and GE’s (GE) NBC fell 10.8 percent from October to November, dropping from 5.3 million unique visitors to 4.8 million. (Hulu’s PR team notes that ComScore’s separate “VideoMetrix” panel assigned a much bigger audience to the site last month: 24 million uniques. They haven’t put out November numbers yet but I’ll update when I get them).

ComScore (SCOR) says U.S. traffic at Google’s (GOOG) YouTube also dropped that month, but by a much smaller margin–0.006 percent. And since YouTube is a global property, those numbers are less telling. Hulu, meanwhile, is a U.S.-only site (much to the dismay of blog commenters).

Apologies for not figuring out how to show you this data in graph form–I’ll figure it out eventually. For now, click to enlarge.

This makes plenty of sense: Hulu was one of two places were you could (legally) see the “Saturday Night Live” Sarah Palin clips, which were huge sensations. The other one, NBC.com, dropped a whopping 50 percent–from 14.1 million to 7.2 million, comScore says.

And all sorts of Web sites that enjoyed a bump during the run-up to the election have tailed off a bit since then. ComScore says the Huffington Post, for instance, is down 20 percent– from five million uniques to four million. Presumably Oak Investment Partners was aware of that before it sank $25 million into the site last month.

Meanwhile, Hulu still shows impressive growth. If I could have figured out how to create a graph, you’d see that Hulu has still had a huge run-up since March, when it left beta.

Speaking of beta, video site/blog punching bag Joost has logged its first full month of traffic since its Web video player became open to the public. ComScore pegs traffic at 1.1 million uniques; the company says that its data, which include global traffic, show 2.1 million.

Those aren’t huge numbers–I can think of several text-only blogs, which cost a lot less to build and operate than Joost’s site, that garner more eyeballs than that–but they’re not terrible either. Still, Joost has a lot of ground to catch up if it wants to give Hulu a run for its money.

Last but not least! Here’s an excellent clip from the smart folks at the Onion. It’s a month old, but news to me. Enjoy:

Huffpo’s newest round values the company at about $100 million, which means its investors think it will be worth much more one day. That’s the same value, more or less, that investors place on TheStreet (TSCM), even though it generated some $65 million last year and has about $80 million in cash on hand. McIntyre:

Huffington has several important advantages over TheStreet. For starters, it does not rely on one person for most of its traffic. If Jim Cramer left TSCM, the company would be in real trouble.

Second, Huffington has diversified beyond it political news base. Over the next year or so, it will become clear whether that was a good idea or not. Adding “style” and “entertainment” sections puts it into competition with a lot of other online success stories.

Third, Huffington aggregates a lot of content from around the web. The cost of doing this is remarkably low. The company pays little if anything to most of its bloggers. TheStreet has a relatively large staff and produces most of its own content.

The final difference between the two companies is probably the most telling. At its current rate of growth, which could be hurt by the end of the 2008 election process, Huffington may double in size again over the next year or so, if its efforts to diversify its content works.

It would be hard to find analysts who believe TSCM is going to expand its audience or revenue at a rate of 100%.”

I can think of some counter-arguments to this, but they’re half-hearted: TSCM’s affluent readers should be worth more to advertisers than Huffpo’s; TSCM still has a revenue stream from subscribers to buffet it from ad market turmoil; Huffpo’s aggregation model isn’t unique and could be replicated by anyone who wants to hire some devilishly clever Web editors, etc.

But better to acknowledge that the HuffPo crew have built something very big, very fast. And that anyone who does that gets rewarded for it, even in an econalypse.

I’ll update if I get any more info, or any kind of response from founder Arianna Huffington or her people. A source “close to the company” informs Silicon Alley Insider that the reports are “stupid and false” and “wrong across the board”; Huffpo cofounder Ken Lerer is an investor in SAI (see lengthy disclosure below).

That said, the size of the round and the valuation both sound plausible. And they reflect the rocket ride the site has been on for the past year or so (someone who should know better allowed the New York Times to float a $200 million estimate earlier this year, but no one takes that seriously).

ComScore pegged the site’s traffic at 4.5 million unique visitors in September 2008, up from 800,000 the year before. Meanwhile the DrudgeReport, the site’s conservative counterpart/model, was at two million. Both sites will claim their traffic is much higher, because that’s what every Web publisher says when confronted with outside numbers (this one included). But by any count, it has gotten very big very quickly.

The big question is whether Huffpo can sustain even a fraction of that growth rate in the aftermath of the election (and sell ads, too, though that’s another matter). Huffpo’s standard answer to that question is that that only 50 percent of its traffic comes from political stories. And indeed, there is plenty of real estate dedicated to topics like Lindsay Lohan’s love troubles, and those of Madonna, as well. And here’s a page called “Sex.” Guess what it’s about?

But there are lots of sites that can tell you about those topics–and indeed, Huffpo is primarily in the business of aggregating that stuff in an eye-catching way, not creating original content. And while the Huffpo people are absolute wizards at optimizing the site for search engines, and maniacally focused about tweaking the site in real time for optimal click-throughs, it really will be hard to sustain growth without political fervor.

If you had to bet on political Web sites that will grow for the next four years, you’d be better off placing a wager on sites that cater to conservatives/Republicans/etc. for the same reason that nonprofits of that ilk will raise more money during the same time–anger and frustration are great animators. Recall that conservative talk radio really exploded once Bill Clinton took office–and yes, this augurs well for Fox News, owned by News Corp. (NWS), which owns this Web site. (And while we’re at it, I most recently worked at Silicon Alley Insider, which has a loose distribution relationship with HuffPo. Phew.)

One hopeful note: New politics/stats/forecasting site 538.com, using an admittedly crude measurement, says both HuffPo and Drudge have been able to keep their post-election audiences.