Kushner's assigned an Observer staffer to put out the newsletter, on top of her regular duties, for no extra pay. Insane! Which is why we don't blame said staffer for the mangled subject line on today's VSL — or for any of its other issues with the second VSL mailing of the Observer era.

We also noticed the newsletter is back to running ads for Design Observer, the blog we're told is run by VSL founder Kurt Andersen's friends and thus likely not forking over much, if any cash for VSL exposure. Presumably the Observer sales staff is hard at work finding new advertisers.

Finally: A plug for Two Lovers, a hidden gem of a movie that's barely been reviewed in all the major papers and features an up-and-coming young actor named Joaquin Phoenix. Welcome to the "smart set!"

Why the New York Observer itself! The high-brow culture newsletter has been, as was expected, renamed "The Observer's Very Short List," though the art at the top obscures that banner change.

Confirming our earlier reporting, IAC officially announced that the New York Observer will take over Very Short List. Despite its all-star founders, the email shopper reportedly sold cheap.

Observer owner Jared Kushner picked up VSL for somewhere under $1 million, a source tells the New York Post. In comparison, Daily Candy, which inspired VSL, sold last year for $125 million. The sales price must vex the VSL founding team Barry Diller (of IAC), Kurt Andersen (of Spy and New York) and Michael R. Jackson (the British television producer). On the other hand, at least they didn't have to shut the thing down.

The Post put Kushner's stake at 80 percent. Kushner told the Post he planned to shut down VSL's niche spinoff lists, like "VSL:Science," and concentrate on trying to make money off the core property, which will be renamed "The Observer's Very Short List." Kushner's not sweating that fact only one-fifth of subscribers are said to open their copies of VSL:

Kushner declined to comment on VSL's open rate, but said that it was above industry average and compared favorably to peer group newsletters like Daily Candy, Thrillist, and Flavorpill.

Of course, unlike the new VSL, those lists have the advantage of being published by more than half a staffer.

(Pic: Rubenstein)

The deal slinging Barry Diller's attempt at reaching for some of that Daily Candy scrilla, Very Short List, was officially finished around Thursday night, we hear. Brief history: Diller, pissed on missing out on some of that email-blast money that he thought would be a shoo-in for solid ad sales with Daily Candy, decided to form a literal, cultured, once-a-day mailer for high-minded consumers to read. Diller, ever fond of his media buddies, got Spy-founder Kurt Andersen to jump on board. And it was highly enjoyable!

But then they didn't make any money off of it, and had to find an easy mark to unload it on. Enter New York Observer boy wonder Jared Kushner, stage left. Cut to: Thursday night. Six full-time VSL employees are given notice to pack their boxes, and get their shit out, as Friday would be their last day. After a messy, messy ordeal. A (now former) IAC employee writes in:

Timeline: We get a bunch of emails Thursday morning. At 10AM, the GM said he might have news (at 6PM, that news would finally be delivered). Someone else said that the deal had already gone through, and that it was finally over. And yet someone else said that we still had assignments for the next week, so it would stretch for another week. And then we heard that the person who was supposed to take over at the NYO had been fired the week before in their bloodbath. So nobody knew anything. Thursday night, the news came through. Our last day was Friday, after SIX WEEKS of being told we were going to be laid off. The worst part: some of us were on the phone with the NYO's people on Friday, trying to teach them how to do our jobs.

The image associated with this post is best viewed using a browser.

Very Short List recently won a Webby Award! :)

But now Observer staffers - who're probably a little overworked since a grip of their most able colleagues were fired - are going to be running Very Short List. :( So who knows what's actually going to happen to the mailer, or what the Observer plans on turning it into.

Most people familiar with the deal are pretty shocked by it, and by how easily Kushner was rolled on this one. The fact that the young mogul thinks he can make money off of VSL where Diller - with all of his resources - didn't is pretty incredible, and rather audacious. Lesser so is the fact that Kushner just fired a stable of some of the most able writers in New York, possibly capable of turning the Observer's web presence into a viable product. Right before acquiring VSL, something - again - actually proven not to make money.

Among other problems IAC had with Very Short List: the only people who have time to look at some bullshit emailer telling them what to read are broke writers like me, who don't have the money to spend on advertisers' products. Besides which, I already know what book I'm buying next week, because I have the time to figure it out. The high-minded, high-income consumers VSL originally set out to target are actually out there earning money, and are too busy to look at an email telling them how to spend it (besides which, they can typically suss that kind of thing out for themselves). So instead VSL had to depend on a niche audience, and at last count, that was only 200,000.

No telling how many people are going to hit that "unsubscribe" link over the next few mornings as VSL does (or doesn't) begin to hit their in boxes, quality control of the thing in check, or otherwise. For that matter, The Observer's daily mailer, too.

Update: Just found out that Sara Vilkomerson, a onetime VSL editor, will be working on the product at the Observer, where she already is. She'll be working on it there on top of her current responsibilities for no additional pay. And an email, sent to 30 or so VSL staffers, stringers, etc. that went out today:

Dear Team VSL:

Needless to say, this has been an intensely bittersweet week. Last Monday we picked up our Webby, which was the sweetest part, and testament to how inspired your work has been. Tomorrow, The New York Observer is taking over majority control and day-to-day management of VSL from IAC. Unfortunately, as part of the transition, they will not be taking any of VSL's existing staff. But as this extraordinary team disperses, we wanted to tell you how incredibly grateful we are for everyone's great work and dedication to this project. We are very proud of it, and aware of just how hard everyone has worked.

We're also pleased that Very Short List will endure — and sincerely hopeful that it can maintain the remarkable standard of excellence established by all of you, so that our 200,000 subscribers will continue being uniquely surprised and enlightened and entertained every weekday.

Thank you. And let's raise a glass together soon — date and place TBD.

Kurt Andersen, Gary Foodim, Michael Jackson, Emily Oberman and Bonny SIegler

Very Short List was, from the beginning, an act of hubris. In 2007, Diller failed to buy Daily Candy, losing out to former AOL executive Bob Pittman. So the IAC chairman decided to round up some buddies and start and shopping list of his own. If Dany Levy could make a mint, why couldn't they?

Besides, VSL would be highbrow where Daily Candy was mass market, targeting a "smart set" of billionaires looking for a shortcut to cultural literacy. Diller is said to have seeded the list with own rich friends, but the early results were unimpressive, at least from a media standpoint: The list reportedly had collected just 20,000 subscribers.

By last year it was up to 100,000 subscribers; now it's 200,000. No matter: It's widely believed a dud, with no real revenues to speak of. Diller needs to dispense with VSL. Which means he needs, as P.T. Barnum would put it, a sucker. Luckily, he may have found one.

A quick sketch of the characters in this shakedown:

The image associated with this post is best viewed using a browser.Barry Diller - The wily old ringleader. A consummate dealmaker who got the better of his evil master John "Darth Vader" Malone in a court fight over IAC. VSL was once his favorite toy; he once told a reporter, ""Without Very Short List, I would be much diminished." But he's moved on. He's putting $18 million into the Daily Beast, his new favorite toy.

The image associated with this post is best viewed using a browser. Michael Jackson, the legman. A highflying television executive in Britain, Jackson has been vexed by the failure of VSL.A sale would help Jackson save face. After all, he co-founded VSL and has overseen it at IAC.

Yes, VSL has 200,000 email addresses. But one source tells us only 40,000 of readers open a typical mailing. And Jackson would appear to have fallen out with Diller, losing his title as IAC's president of programming right around the time Tine Brown came on board for the Beast. We hear his remaining portfolio at IAC consists entirely of VSL.

The image associated with this post is best viewed using a browser.Kurt Andersen, the pretty girl (a.k.a. the bait). Like Diller and Jackson, Andersen was also a founder and also wants to save face. But he has a unique asset: His experience as a founder and writer at places like Spy, New York, the New Yorker and Inside.com help make VSL — or at least a meeting with VSL — attractive to prospective rubesinvestors or buyers.

The image associated with this post is best viewed using a browser.Jared Kushner, The Mark. The 28-year-old media mogul came into possession of the New York Observer just as the newspaper industry entered its death throes. He's rumored to be in talks with Diller about a joint venture.

While Kushner is likely impressed with VSL's 200,000 subscribers, he should ask IAC for specifics about the list's "open rate" — the number of subscribers who actually read it. Then, if he still wants to buy after learning only a fifth of readers do so, he should ask about those frequent ads from the blog Design Observer. Run, we hear, by Andersen's friends, the site is unlikely paying much, if anything, for the spots.

It might just be too late: Observer scuttlebutt has it that the "joint partnership" would amount to the newspapers' remaining staff writing the VSL. In that case, chalk another one up for Diller, an operator no more ruthless than his New York peers would expect him to be.

(Michael R. Jackson pic via Cityfile; top Diller pick by Esther Dyson on Flickr.)

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.

Apparently it's another attempt to clone the Onion, though this time with an infusion of Daily Show DNA by way of the Huffington Post. Slated for birth in 2007, the "continuously updated satirical Web site" will "deliver throughout the day the kind of humor that has been the preserve of late-night talk-show hosts like Conan O'Brien and the Comedy Central stalwarts Jon Stewart and Stephen Colbert." The site will be overseen by one Ben Wikler, "a comedy writer who has worked closely with Al Franken." With luck, Wikler will bring a little of that Air America magic to the table.

Diller claims no interest in big-ticket acquisitions, dismissing such as the domain of "media imperialists." He and Jacskon prefer "starting their own ventures and investing in nascent ones." So no Facebook-style deals, but when you're talking nascent, you can't ever be too nascent to attract (or continuously plead for) a little investment injection.

Most pregnant with foetal potential is one final throwaway line in the NYT article, reading thusly:

[Jackson] said his next area of focus might be news — a site that aggregates and edits news and helps point people to the best information available — but he was not ready to talk about specifics.

Diller's Web: Think Cable of the Past [NYT]
[Photo: zachklein]

Sample pages from Spy [VSL]

Content after the jump.

We've had our fill lately of documentaries that breathlessly tell us things we already knew — global warming is scary, fast food is unhealthy, and so on. Which is why we approached /Jesus Camp/ — a doc about an Evangelical summer camp that trains kids to be soldiers in "God's Army" — expecting to be bored.

But by going deep into the lives of preteens Levi, Rachel, and Tory,
both before and during their attendance at Pastor Becky Fisher's "Kids
on Fire" camp in North Dakota, the filmmakers present an absolutely
riveting, intensely personal view of the Christian Right.

There are many, many gasp-inducing scenes, including one of a church
filled with little kids crying and speaking in tongues as they cluster
around a life-sized cardboard cut-out of President Bush, who is
presented by camp counselors as a savior who is helping "take back
America for Christ."

And yet, for all that, it's a nuanced portrait of the subculture, much
more Fred Weisman than Michael Moore.

Website [VSL]
Earlier: Barry Diller Officially Penetrates Boys of CollegeHumor
Colors: In the Hood