My pal Owen Thomas, late of Valleywag, has published a piece for NBC’s Bay Area local site that suggests that Time Inc. wants to get into the hardware business and produce its own e-reader.

That’s something other publishers, like Hearst and News Corp. (NWS), are actually doing or have at least mulled. But multiple sources familiar with the Time Warner (TWX) unit’s thinking say that’s not the case here.

But the publisher certainly is thinking about ways to create specialized content for e-reader devices and about the best way to distribute that content.

Time Warner executives have talked about this openly for many months–see Time Inc. digital guru John Squires’s comments in June–and Thomas appears to have gotten his hands on an internal document that addresses the same topic.

Most intriguing, according to Thomas’s read of the documents: A Hulu-like spinoff that would do…something:

The presentation concludes that Time Inc. and other partners should form a new, jointly owned company. Time Inc. might spin out its Maghound service, a service which lets consumers bundle multiple magazines together into a single monthly subscription, to form the base of the joint venture. The company is also considering acquiring other businesses to jumpstart the venture.

No comment from Time Inc.

But I do know that Time Inc.’s executives have met with other publishers about collaborating on e-reader standards, etc. And I do know that Time Inc. executives  think a special version of their print products, designed specifically for e-readers, is a good idea. Most everyone I talk to in magazine publishing, in fact, believes this.

And I understand why they do. In their minds, the e-reader versions of their products function just about the same way magazines do: People pay to read them and advertisers pay to distribute their messages through them. And–this part is crucially important, from their perspective–publishers retain control of distribution and the billing relationship with their customers.

That relationship gets obliterated in Amazon’s (AMZN) Kindle model: Publishers wholesale the stuff to Jeff Bezos, who deals with consumers directly. This is also one of the music industry’s big regrets about the digital age. Even though labels are selling their stuff on the Web, via Apple’s (AAPL) iTunes and others, they still don’t have direct relationships with its customers.

Which is why publishers are desperately hoping that they’ll be able to push their stuff through someone other than Jeff Bezos. On the surface, at least, it looks as though their wishes are being met: A bevy of Kindle competitors–Sony (SNE), Plastic Logic, iRex, etc.–is surfacing. Surely one or more of those will figure out how to offer publishers the terms they want.

But even if one or more of the Kindle clones succeeds, print publishers still have a core problem: They need to convince consumers that content–in any form, on any device–is worth paying for. That will work in some cases, but for many it’s going be a very hard slog.

You owe me. I had to get off my sickbed today to call David Karp, the CEO of Tumblr, and ask him if he really was in talks to sell his company to Yahoo (YHOO), as you reported today on Gawker/Valleywag. For the record, David says your report is “categorically untrue.”

I’d spend more time discussing it, but, as I said, I’m feeling under the weather. And your story is not true. So here’s what Karp has to say via his Tumblr account.

And here’s what Marco Arment, who helped start Tumblr with Karp a couple of years ago, says:

And here’s what venture capitalist Bijan Sabet, whose Spark Capital helped raise a $4.5 million round for Tumblr last year, says via his Twitter account:

Now I’m going to return to my convalescing. Please give me a break for another day or so.

[Image Credit: Library of Congress via Flickr]

Yes, this is the third post I’ve written today about Gawker Media’s Nick Denton, who seems to prefer to get all of his news out at the same time.

But briefly:

• Denton has put Consumerist, his, um, pro-consumer site, up for sale.
• Denton is folding Valleywag, his Gawker-for-techies site, into…Gawker. Editor Owen Thomas will keep his job, and essentially become Gawker’s man in Silicon Valley. Writer Paul Boutin will contribute some stories, but likely fewer.
• Denton has more moves to come. Conveniently, he has provided a playbook for them via his post this morning, in which he spells out what Internet publishers should do in the face of a cratering ad market. Educated guess: If you sell ads for Denton, or work for one of his most successful titles (Gawker, gadget site Gizmodo, videogame site Kotaku), there are decent odds you will get to continue doing so in the future. Everybody else, all bets are off. Then again, that’s the same position that all those with a job in media finds themselves in these days. Cheers!

Don’t care what what a man who publishes gossip blogs predicts will happen to the ad market? Fair enough.Here are some actual data from the front lines: Online advertising sales results from Jupiter Media (JUPM), an odd collection of Web sites, trade shows and (until last month), stock photography businesses.

To spell that out–Jupiter is reporting that revenue per online advertiser dropped 29.6 percent in the last quarter, which ended Sept. 30. And recall that the financial meltdown didn’t really hit until the last two weeks of September.

The net effect: Jupiter’s online media business declined 4.6 percent in that quarter. What do you think the current quarter will look like?

If you want to argue that Jupiter’s an outlier, and that big Web players like Google (GOOG) and Yahoo (YHOO) are still going to be fine, you’re not alone. Yesterday, for instance, someone at Condé Nast’s Web publishing unit told me the company’s still forecasting high single-digit to low double-digit revenue increases for 2009.

But recall that Time Warner’s AOL (TWX) just recorded a six percent ad revenue drop during its third quarter. At some point Nick Denton is going to look less paranoid and more prescient.