Comcast paid an un-fucking-believable $125 million for DailyCandy — just a simple shopping e-newsletter, if you're not familiar with it — just over a year ago, greatly enriching former AOL exec Bob Pittman, who had previously acquired it for $3 million. Amid all the investment, DailyCandy expanded from New York to London, Los Angeles, Chicago, San Francisco, Miami, Dallas, DC, Boston, Atlanta, Seattle and Philly.

DailyCandy will now stop publishing city-specific editions in all but five of those 12 cities: New York, London, LA, Chicago and San Francisco. Subscribers in the other cities will now receive an "Everywhere" edition, supplemented with local news and events twice a week.

The email publication appears to have been bulking up dramatically. When last we checked it had 20,000 subscribers, too few to get much attention from advertisers. A year ago, VSL contributor Kurt Andersen told Charlie Rose it was up to 100,000 subscribers.

We checked in today with VSM general manager Gary Foodim, who says the list is up to 200,000 subscribers.

Tenfold growth is a commendable achievement for a list that targets a "smart set" of well-to-do would-be sophisticates. The question is whether VSL still has any claim on that set or whether, as we hear, the list has been diluted with users from other IAC brands, resulting in an open ad rate surprisingly low for a database of upscale consumers. One anecdote making the rounds even says that Diller's friends have abandoned the service; of 25 buddies he used to seed the VSL list, all but one is said to have unsubscribed.

Apparently retaining at least some highbrow airs, VSL hasn't responded to our request for comment on that scuttlebutt.

But it's easy to imagine that Diller, who once said he would be "much diminished" without VSL, has moved on. Rumors that he wants to offload the site have been rife this year. Now VSL is said to be in talks with Jared Kushner's ailing New York Observer. And Diller would appear to have a new favorite toy, judging by the $18 million he's feeding into the bonfire that is Tina Brown's Daily Beast.

On the one hand, a childhood pal — Russell's mom was reportedly best friends with Levy's mom — can do far worse than guiding one to tens of millions of dollars in wealth. And Pilot Group did more than passively watch its investment grow. From what we hear, Pittman's salesmanship was key to growing Daily Candy's advertising base. Such involvement would be in keeping with Pilot Group's focus on taking a "control position" in its investments. After the investment firm acquired Daily Candy, the newsletter's subscriber count grew tenfold to 2.5 million.

But not everyone buys that version of events. Said the tipster, an AOL veteran who followed Daily Candy closely:

For Pittman to brag that subscribers have increased since he made

the investment is just private equity puffery and delusion. That

would be like my grandmother taking credit for the business success of

the stocks she owns.

Perhaps Russell's help was not so selfless. As our source notes, Russell's advice on the deal would have been "highly conflicted," Russell having worked for Pittman for several months before the Daily Candy investment closed in late 2003.

His line to other potential portfolio

companies and strategic partners is that through his friendship with

Dany, HE was responsible for the early success of Daily Candy as a

startup, so he didn't feel compunction about duping the original

shareholders... Whatever the case, Pittman was not a genius to have his

junior guy abuse a family friendship in a predatory deal.

Let this be a lesson to startup founders who are not yet sufficiently cautions about venture capital investment, or who spend too much time worrying about whether their fameball girlfriends really truly love them for the right reasons: If you're not careful, you might have to settle for a paltry $25 mil when the big payday comes. After taxes, you'll barely be able to afford a decent loft!

A year ago, the boa-sporting Touby sold Mediabistro.com for $23 million. But lots of other people had smaller stakes in that company, so Touby walked off with a significantly smaller amount of cash than the total purchase price. She can't even afford to move out of her sixth-floor walkup! Meanwhile, Levy can now afford to buy as many Daily Candy-endorsed trinkets as she wants, forever until the end of time and beyond.

Still, Touby and Levy are the two most cash-rich media-centric internet entrepreneurs NYC has thus far produced. And they're both women! Is that notable? Not yet, but if Arianna Huffington decides to sell the HuffingtonPost for an ungodly sum and turn Republican again, it will make three, and an official trend. Until that time it means nothing.

[More about Levy's privileged family background at CityFile]

Bob Pittman's claims to have founded MTV were overstated, but he was closely associated with the cable music channel's gigantic success in the 1980s. It was said of his wife Sandy, who later attempted to conquer Everest, that she gave a new meaning to the term "social climber." And Pittman himself was equally ambitious on the Manhattan circuit, though he scaled the social and business heights with a good deal of charm and grace.

The one-eyed mogul, now 54 years old, came tumbling down after he took over management of revenue-inflating AOL during the bubble. The online access service cashed in on the funds being invested in late 1990s dotcoms, much of which was spent on advertising partnerships which gave the startup brands a place on AOL pages.

The Dulles-based online service was never going to survive unscathed a downturn and the erosion of the dial-up market, and Pittman's reputation would have suffered anyway. But the infamous 2000 merger between AOL and media giant Time Warner ensured he would not merely be despised by investors who bought into AOL at its revenue-inflated peak; he personified to Time Warner veterans the arrogance and empty rhetoric of the AOL upstarts. Pittman managed to sell $94m in stock in the aftermath of the merger, but the dilution of Time Warner shareholders ensured the hatred of a large part of Manhattan's media establishment.

Pittman's contribution to Daily Candy has been more constructive. His salesmanship transformed Dany Levy's cute little newsletter into a marketing machine for fashion and retail brands. Pittman's reputation as a canny internet investor is made by this transaction, by some measure the best return of his fund. To be sure, the web may eclipse email as the preferred online medium for advertisers, and Comcast may have bought a property that's past its peak. But the cable company's bosses are in Philadelphia, a city that Pittman can easily avoid. In terms of Manhattan media, the former wonderboy is back.

Comcast, mind you, also recently bought internet address book Plaxo. Its explanation of the acquisition was mind-numbingly non-sensical:

Comcast’s ambition is to make more and more content available to consumers across all platforms,” said Samuel Schwartz, executive vice president for strategy and development at Comcast Interactive Media, in an interview. “When you add the social dimension to these products, you can navigate through those platforms based on what your friends are doing.”

Uh, right. Whatever. Schwartz went on to say that people would be able to use Plaxo to send an episode of Lost to their friends, which is also bizarre, because the hard part of sending a TV show to a friend (WTF?) is not finding your friend's email address — it's sending the show.

Since Comcast is famous for canceling the service of its most Web-savvy customers and for sneakily disallowing certain programs from connecting to the internet, some (smart) people think the company should maybe focus on fixing those problems instead of spending tens of millions of dollars on awkward internet acquisitions. But where's the glory in that? Being a media company is way more fun than trying to meet the needs of millions and millions of customers!

[IssTumBul]

Pittman's history within Time-Warner lay primarily with MTV, so he's cool with what the kids are saying. He's also done boardroom time at places like Cendant and videogame factory Electronic Arts. He definitely has a thing for the e-mails, as in addition to Daily Candy, Pilot reputedly tossed about $300K into the manly coffers of male-mail service Thrillist. Incestuous side note: Thrillist lordling Ben Lerer is the son of Ken Lerer, cofounder of the Huffington Post, which Pilot may also have a minority stake in. Beyond that, Pilot has amassed a small portfolio of net-friendly small media properties, like the Double O radio network, 21 TV stations via Barrington Broadcasting, and a net marketing company (and former iFilm subsidiary) called OTX.

And Pittman has his socially conscious side as well, from throwing money at Eliot Spitzer to the "venture philanthropy" of the Robin Hood group. One assumes he's perhaps not quite so cavalier these days about personally flying planes at shareholder expense. There is one puzzling component of Pilot's portfolio, that being the Contours Express chain of women's gyms. Not sure what that has to do with new media, but to their credit, Daily Candy hasn't started gushing about the benefits of positve and negative resistance.

That aside, Daily Candy remains Pilot's prize, but you have to wonder — how does one realistically turn even an admittedly fine e-mail list into an $130 million valuation? Skittish investors didn't buy it either — at least not yet — even though DC's self-projected 2006 revenue comes in it at "somewhere less than $20 million." Given that, the asking price could have been even higher than $100 million, and yet it wasn't, and nobody bought it anyway. The AOL/Time-Warner merger debacle aside, Pittman and the Pilot Group have a reputation for being among the most canny new media investors out there, but the deciding hand in their big buy remains mostly unplayed.

• New York-based e-mail startup Daily Candy gets a sweet deal: an investment valuing the company at $130 mil, which lets the company take down its "For Sale" sign and get back to the important business of making urban women feel inadequately shoed. [Gawker, link being fixed]
• So some big-city bloggers had a party for Six Apart's new Vox blogging service, right? And some guys sat in a hot tub on the roof? And probably someone called this the bubble? Hon, it's not a bubble until what's in the hot tub can get you drunk. Anyway, click through for topless shots of Gawker Media managing editor Lockhart Steele. [Teen Drama]
• Damn it, Gawker's stealing all the tech news today. As our catty sister notes, the New York Times is proud to name-drop Dodgeball.com founder Dennis Crowley, the man responsible for every New Yorker and San Franciscan constantly updating their friends on how drunk they're about to get. [Gawker]
• Pictured: The Times also uses a photo illustration to remind everyone of those wild days of free drink coasters for all. [NYT]
• Mooching off the "Get a Mac" commercials: You can make a clever parody or a creepy knock-off ad. (Please make the parody.) [iLoad]

But the 130-million-dollar question remains: who's the investor? Seriously, who the fuck would put down that kind of cash to validate their opinion on some fabulous little peep-toes from a Park Slope cobbler you've never heard of?

Idle and uninformed speculation is always welcome.

DailyCandy Sells Stake in Itself, Valuing Web Firm at $130 Million [WSJ]
Earlier: Like Candy From a Pittman

Tuesday night wasn't just the BlackBook party for A.M. Homes; it was also the fete for Daily Candy's new book, Daily Candy A to Z : An Insider's Guide to the Sweet Life. Staff photog Nikola Tamindzic and erstwhile Intern John Carney hit them both, but the Daily Candy affair left Carney too spent to write about it till today. After the jump, Nikola and John's adventures in Candyland — which, shockingly, was apparently populated with a lot of girls.

If you don't know what Daily Candy is, you must have a below-average tolerance for shopping tips dressed up with sickly sweet cartoon graphics. Either that, or you're a guy. You see, every last un-fat chick in New York — and dozens of other cities — gets a mind-numbingly chipper email every day from these ladies. If you don't believe me, ask your girlfriend. This is how they know where to shop and what color lipstick to wear and which day in spring is the official "Girls Start Wearing Skirts Day."

But that's only part of why I thought this party would suck. Also, there wasn't going to be anyone to fight. And also it was at Guest House, which is on 27th Street, the heartland of "Clubs You Won't Like." Then there was also... oh wait... never mind. Holy shit there were a lot of girls at this party.

See. There were lots and lots of girls at the party. They were cute, and soaked with free vodka.

This is Dany Levy. DailyCandy is her fault.

Smut king Rufus Griscomb was actually overheard giving parenting advice to DailyCandy CEO Pete Sheinbaum. Snore. But both were thinking, "Holy shit there are lots of girls at this party."

Daily Candy's Danielle Buffalini and former DCer Allison Griffin, now of Teen Vogue, had to guard the Rorschach Personality Test wallpaper from the vodka soaked guests.

DailyCandy investor Bob Pittman — the $100 million man — took time out from counting his money to drop by the party and thank all the little girls who are about to make him even richer.

amNew York's Justin Silverman and furniture porn king David Galbraith were thinking "Holy shit there are lots of girls at this party."

This girl was there. She hates you.

This is the famous metro metrosexual of The New York Times, Nick Confessore. You know what he was thinking? Yep. "Holy shit there are lots of girls at this party."

ICM super-agent Kate Lee stood by while Maxim's Eric Gillin and IAC's Mo Koyfman whispered to each other, "Holy shit there are lots of girls at this party."

Thrillist's AJ Daulerio and David Galbraith. Do I really even have to say it again?

• The tone is described as "gossipy," "cliqueish," and defensively independent.
• It's rumored that the writers aren't exactly raking in the dough.
• And yet the company manages to rack up a mythical $100-million selling price.
• There's precious little office space, and the staff would rather tease than invite a journalist over.
• It's really just Old Media with the Internet stirred in.
• It tries oh so hard to be sexy and trendy.
• All the guys involved are probably gay.

It just felt...eerie. As if...as if I already worked for this company. But one line relieved all Twilight Zone heebie-jeebies.

• "The company...fiercely combats any perception of impropriety."

Well fuck that.

How Sweet Is It? [New York Magazine]
Illo: Daily Candy [DailyCandy.com]

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From Chapter 2, "B is for Backtracking Female Progress."

Cleavage to Beaver [Daily Candy]

It s Monday, people. The word of the day is ambition.

Your inspiration: Sascha Lyon, the David Foster Wallace of chefs.

Other former sous-chefs might play it safe for their first solo outing. Not Lyon. His, appropriately (if immodestly) named Sascha, opens today. And it s the culinary equivalent of a 1,000-page first novel.

Sigh. DFW's first novel wasn't Infinite Jest, and even if it were, we doubt the menus at Sascha are weighed down with footnotes. Pretty Candygirls, please just steer clear of bookish stuff — it's horrible for your complexion.

Lyon's Den [Daily Candy]