Will Investors Leash Arianna Huffington's Spending?

It's a bold new future at the Huffington Post: investors have installed their own CEO; a CBS producer will launch a Gotham edition next month. Nevertheless, insiders are murmuring about belt-tightening, starting at the top.

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.

Will Investors Leash Arianna Huffington's Spending?

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.