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!

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.