Conspiracy: A True Story of Power, Sex, and a Billionaire's Secret Plot to Destroy a Media Empire

Chapter 1: The Inciting Incident

"The beginnings of all things are small," Cicero reminds us. What becomes powerful or significant often begins inauspiciously, and so, too, do the causes that eventually pit powerful forces against one another.

The conflict at the heart of this story is no different. Its genesis is a largely obvious, mostly unremarkable blog post-not even four hundred words long-that outed a little-known technology investor as homosexual. Written by a gossip blogger named Owen Thomas, for a now-defunct tech news website owned by Gawker called Valleywag, the piece was published at 7:05 p.m. on December 19, 2007, under a headline that would sear itself into the mind of its subject:

Peter Thiel Is Totally Gay, People.

It wouldn't be fair to say, as some partisans have in the intervening years, that Owen Thomas was some reckless blogger who plucked some private citizen from nowhere for his story. He'd been a reporter for over a decade, and Peter Thiel had a media profile as an investor and an entrepreneur. Thiel had made a fortune as a founder of PayPal and put the first $500,000 into Facebook. The man had previously posed for photographers and agreed to be interviewed by reporters who were covering him or his companies. And it was not disputable that he was, in fact, gay.

Peter admits that his sexuality was no revelation. "I think everyone already knew in 2007," he told me. By that he means that his parents knew he was gay. His friends knew and so did his colleagues. But it was not a fact he advertised. A friend would say that Peter burned to be the best technology investor in the world. To insert "gay" into that, to be seen as the best gay technology investor, seemed artificially limiting. Like it was cheating him of something he was desperate to earn. And so Peter Thiel's sexuality stood as a kept but open secret in the close-knit community of the Silicon Valley elite.

To the modern mind, this reticent gay identity seems like an anachronism, but when you do the math, you quickly realize how different the world was in 2007. The Democrat who would be elected president in less than a year's time was still five years away from announcing his support for same-sex marriage. The woman who opposed him in the primary would take an additional year to come around. 2007 was also much closer to the burst of the dot-com bubble than it is to the present day. Facebook's IPO lay five years in the future and most of the astonishing success of this class of start-ups from Twitter to Netflix still lay ahead.

While Thiel was not no one in late 2007 when the story broke, Peter Thiel was not then Peter Thiel. He was not the person he would be at the end of this story, the idiosyncratic lion of Silicon Valley venture capital or controversial political power broker. Thiel was more like all the other technology investors most people have never heard of. Do the names Max Levchin or Roelof Botha sound familiar to the average person? They were Thiel's partners in PayPal. Or the name Jim Breyer? He put a million dollars in Facebook less than a year after Thiel put in his half million. What about Maurice Werdegar, who put in money with Thiel in that famous seed round? Few have even heard of these people, let alone cared whom they slept with. They are, as far as popular culture is concerned, as Thiel was then, barely notable. And he was, above all, a quiet, private person.

When one considers Thiel's burning ambitions against this backdrop, and the potential for this Valleywag story to be the first thing to broadly define him outside the Valley, one might better understand Thiel's reaction to Owen Thomas's small, unexceptional story and the flippant headline that went with it.

"It was like a full-on attack out of the blue. There was nothing I had ever done to these people in any way whatsoever. On a superficial level, the article was just about outing me," Peter said. It wasn't the outing itself, however, that most got to him, but the second narrative, that he has psychological problems because he didn't want to be outed. "It was never about the Owen Thomas article," Thiel eventually admitted to me. "It was the Nick Denton comment."

In the comments section at the bottom of Owen Thomas's story, Nick Denton, Valleywag's editor and the founder of its parent company, Gawker Media, had posted a few sentences in the form of an accusation that seemed to respond to itself: "The only thing that's strange about Thiel's sexuality: why on earth was he so paranoid about its discovery for so long?"

By normal, journalistic standards, this commentary would be extraordinary. For a founder and publisher to editorialize and speculate from the peanut gallery of his publication's own comments section? Yet by 2007, this kind of combative, adversarial approach to the news and its subjects was standard operating procedure for the somber, perpetually scruffy Englishman with cherubic cheeks, a love of technology, and a passion for gossip.

Even those who hate Nick Denton would describe him as brilliant. Born Nicholas Guido Anthony Denton to a British economist father and psychotherapist mother of Jewish-Hungarian descent, Denton attended Oxford University. He sold his first company, a networking group for people in the tech industry, for millions. When he started his online media company in 2002, his love for tech was at the forefront of his mission: Gizmodo, the first of the many sites that would comprise his publishing empire, was a "vertical blog devoted to superskinny laptops, spy cameras, wireless wizardry, and all manner of other toys for overgrown boys. All gadgets, all the time."

Roughly four months later, he launched a new site dedicated to his other, more primal passion: secrets and gossip. He named it Gawker. Technology may have been Denton's first love, but many would say this-his lust to expose, to reveal, to lob bombs-was Denton's true love, a side of him that ran parallel to his urge to build. He would name his celebrity site Defamer (one blogger joked, "Why not go all the way and call it 'Defendant'!"), and he would name his porn site Fleshbot, but it was Gawker that would stick as the name of the parent company, since it so well described the editorial ethos of Denton's online empire and captured the pathos of its founder perfectly.

Gawker's first editor, Elizabeth Spiers, was paid $2,000 per month for twelve posts a day, seven days a week. Her job was to mock the club of New York elites she had never been invited to join. Her job was to, with a kind of humorous contempt that's come to be called snark, dismiss people and institutions as laughably unimportant, even as, in writing about them, she was in fact admitting how important they actually were (and that perhaps, deep down, she'd like to join them some day). Denton had a knack for recruiting talent like her, and for cultivating their voices as he did with Spiers and, eventually, Owen Thomas. He liked young writers with drive and wit, and a gift for pointing at hypocrisy and vulnerabilities that brought audiences quickly and cheaply. Within six months, Denton's sites were pulling in more than 500,000 page views a month. Within a year, the blogs were making more than $2,000 per month each; within three years they were estimated to be generating at least $120,000 in advertising revenue per month. A little over ten years into Gawker's run, its revenues would be nearly $40 million a year and the sites would have more than 40 million readers a month. Denton had struck a rich and dark vein. He had harnessed a modern, digital take on the old tabloid sensibility that, George W. S. Trow once observed, requires a sort of "back and forth of loathe and love of old authority." This pinging between self-pity and self-importance would be Gawker's secret formula.

"As a publishing entrepreneur who built an operation out of nothing, I had to go where the energy was," Denton would say. That energy was mostly the energy of disillusioned youth, of outsiders criticizing insiders. In being anti this and that, and rarely for something else instead. Mankind has always crucified and burned, a great playwright once said. We take a secret pleasure in the misfortune of our friends, said another wise man. For Gawker it was no secret pleasure but a conspicuous one and to it they added the power of blogging. Nick's instincts were captured and compounded by the economics of his instruments: twenty-something writers with school debt and little income. Overeducated children of Boomers, the children of parents whose idealism became materialism, the writers believed they had something to say because those same parents had told them they were special and important and talented.

Previous generations of writers came to New York City with a dream. This generation came with a bone to pick-for the broken economy, for the collapse of old industries, for the hypocrisy and fakeness that had finally become acute. They wanted a seat at the Algonquin and ended up sharing a bedroom in Bushwick, writing twenty articles a week (nineteen of which no one would read) for $12 apiece. Of course they were pissed. A New York Times writer would later dub this ethos the "rage of the creative underclass." A Gawker headline captures it better: "It's OK to Be a Hater Because Everything Is Bad."

The existentialists spoke of ressentiment, or the way that resentment creates frustration which fuels more resentment. Philosophers might have said this feeling was pointless, but they knew it was a fearful force. Gawker would revel in ressentiment, of its writers and readers. Like most movements that harness the power of an underappreciated class, the environment was temperamental and volatile, but you could not argue that the results were not also entertaining and forceful. Especially when combined with financial incentives.

Denton experimented with different forms of compensation in the early years, but his most important shift was away from a raw number of posts per day (how many things can you make fun of today) toward page views (how many people agree with what you're making fun of). Denton's mind gravitates toward small publishing innovations like these. His sites were some of the first to post the view count at the top of the article. He notices that his writers obsess over this number, refreshing the stat counter over and over, and begins to pay them accordingly. He puts up a large screen in the office that ranks the writers and the articles based on traffic. He calls it the "NASDAQ of Content," but it's closer to the millennial id. If the untapped energy of young people was his first great breakthrough, this is his second. The first offers the power of being heard, the second provides the power of reach and then of quantification-turning blogging into something you can win. How? By getting the most readers. With what? That's for you to decide.

What Denton did, in effect, was turn writing, social commentary, and journalism into a video game. Writing wasn't a craft you mastered. It was a delivery mechanism. The people and companies you wrote about, like Peter Thiel, weren't people, they were characters on a screen-fodder for your weekly churn. And the people you got to read this writing? They were points. The score was right there next to your byline. Views: 1,000. 10,000. 100,000. 1,000,000. The highest prize, the best ticket to traffic? Scandalum magnatum-going after great men and women. But in a bind, and with so many posts to get out each day, ordinary people would do just as well.

Gawker Stalker: Elijah Wood Emphatically Not a Gay

Joe Dolce: Portrait of an Asshat

Danyelle Freeman Sucks: The Marrow Out of Life, in General

Which NYC Food Critic Is an Idiot? (Hint: Danyelle Freeman!)

Morley Safer Is a Huge Asshole

Stubborn Jew Rolled by More Stubborn Jewier Jew

Nightmare Online Dater John Fitzgerald Page Is the Worst Person in the World

Andy Dick Gets the Beat-Down We've All Craved

It's Not That Adam Carolla Isn't Funny, It's That Adam Carolla Is a Dumbfuck

Peaches Geldof's Heroin-Fueled One-Night Stand at Hollywood's Scientology Center-with Pictures

When Gawker creates "Gawker Stalker," a feature that lets anonymous users write in with sightings of celebrities so their locations could be tracked online in real time, or when a Gawker writer in 2007 wrote a piece that began, "When is it okay to hate a 4-year-old? Maybe when the kid's name is Elijah Pollack," and tagged it "The Sins of Their Fathers," they were practicing journalism by tomahawk. And it isn't scoops that the sites were looking for, it was scalps: who can we get, who did something stupid, what are other people afraid to say, and who are they afraid to say it about?

If a piece didn't go hard enough, if there were rumors the reporter wanted to talk about but couldn't justify even with Gawker's thin standards, there was always the comments section to push the story from behind-or the bottom, as it were-and drum up tips and speculation and titillation that might lead to more attention. It had always been Nick's nature to push deeper, to speculate, to needle, to drill down to the interesting stuff-and there was no deeper well of ressentiment than the endless scroll of the comments section.

It was all great fun for him, for his writers. Why wouldn't it be? Especially when the old guard yells at you, and you are the type who takes that as a sign you're doing everything right. Journalists, competitors, and leaders alike criticized this editorial style that Nick had invented. Watchdogs were on the lookout for the first Gawker victim suicide. Some inside Gawker even shared these concerns. But it cannot be said that readers didn't love Gawker. There was a unique freeness to what Gawker wrote, a kind of raw unfiltered honesty, an exaggerated way of telling the truth. Peter Thiel is totally gay, people! If something was true, if they thought something was true, they published it. The writers said the things that people thought in private-they fulfilled their wishes. They gave their readers-the people who made up those numbers at the top of each post-what their own bitterness and ressentiment had always craved but no one had seen fit to give them before.

A movie executive once described the "honeyed sting" of the notorious twentieth-century gossip Hedda Hopper as a black widow spider crossed with a scorpion, weaned on prussic acid and treacle. In a way, that was Gawker, too. The perfect conduit for the envy and schadenfreude and jockeying for power that goes on in this world. It's why their tip lines were never dry.