Apple v Gizmodo: Gawker's Nick Denton on the battle over the lost iPhone

Ed Pilkington
The Guardian, Monday 3 May 2010

It is late morning in the New York headquarters of Gawker Media, the network of 10 savvy and gossipy websites that between them act as irritant-in-chief to the US establishment. Above the reception desk there's a flat-screen TV displaying automatically updated data about the network's traffic: Gawker's so-called Big Board lists the 10 posts across the Gawker Media empire that are at any moment attracting most reader attention. The No 1 slot today is an item headlined The Washington Post Cannot Tell Obama From Malcolm X, which the board shows has received 3,725 visits in the past hour. Second slot goes to Funeral Home Displays Shooting Victim, followed by Bigots Now Targeting Lesbian Teen's Graduation. But it's the article in fourth place that catches the eye – This Is Apple's Next iPhone. It has attracted a modest 2,032 visits over the past hour, but an astonishing 4,014,535 since it was first put up two weeks ago.

That Big Board figure is testimony to the extraordinary saga that has recently gripped the world of Gawker Media, bringing it head-to-head with one of the world's most powerful corporations and culminating in a late-night police raid backed by the threat of criminal prosecution. It has been a David and Goliath confrontation set in motion by the audacious move by Gawker's technology arm, Gizmodo, to acquire a prototype of Apple's upcoming 4G iPhone and disclose its highly secret make up two months before its official launch. The breach of Apple's legendary wall of security revealed a great deal about the state of new media in the US today.

Beautiful products

At the centre of the conflict stands Nick Denton, a British web entrepreneur who has injected his irreverent brand of journalism into the US media for eight years. We meet in his apartment near Gawker's SoHo offices. He is playing last night's episode of John Stewart's Daily Show featuring the Apple v Gawker battle, on an iPad. For a man who has faced the ire of the great Apple Corporation, he is steeped in Apple admiration. "Apple makes beautiful products. I own a Mac Pro, a Mac Book, a Mac Mini, an iPad, an iPhone, pretty much the entire collection," he says. The office is full of Macs and other Apple products.

But, over the past weeks, Denton has witnessed a different side to the Apple behemoth. It began on 18 March when Gray Powell, an Apple software engineer, was drinking in Redwood City, California, to celebrate his 27th birthday. Somehow he left the prototype of the next generation iPhone in the bar. It was picked up by another drinker who took it home when nobody claimed it. The next day the phone wasn't working, but when its finder tinkered with it he found that its thin outer shell – in the guise of an old iPhone – peeled off to reveal a shiny square object unlike anything he had seen before. He contacted Apple helplines, but no one took him seriously, and eventually he went to Gizmodo and sold it to them for $5,000.

Gizmodo's editor, Jason Chen, and his team deconstructed the machine, analysed it, became convinced it was a genuine prototype, and posted articles about it.

It was an almost unheard-of blow for Apple, whose security is renowned. Denton says: "They have these incredible devices that everyone wants to buy and read about, and that gives them the power to be so controlling of their marketing."

But for once, such control was smashed by a determined media outlet. The backlash was quick and stunning. Steve Jobs himself reportedly called Gawker executives to demand the phone's return, and there was a flurry of legal letters. Then, four days after Gizmodo posted the story, Chen and his wife returned home to find police in their apartment, investigating, they said, a possible criminal offence relating to the receipt of stolen property.

The raid, in which Chen's computers were seized, was conducted by officers of the Rapid Enforcement Allied Computer Team (React), a taskforce set up a few years ago to deal with computer crime tied to Silicon Valley. It was later revealed that Apple Inc sits on React's steering committee.

"It is strange," Denton says, clearly measuring his words in the light of the ongoing legal argument. "It's extraordinary that one would have a police force that was so aligned with corporate interests." Denton, a steely character of part-Jewish, part-Hungarian extraction, goes on: "Jason Chen, one of our bloggers, had his house broken into by a police force close to Apple. I'm not usually flummoxed, but when I had a call in the middle of the night, I was absolutely shocked."

The police action, and the threat of possible charges, has raised a central question of this media age: are bloggers journalists? Under California and federal law, journalists are shielded from prosecution if they are protecting their sources from identification. But does that apply to bloggers?

Denton believes the authorities are unlikely to attempt to trample over the rights of bloggers on the grounds that they are not journalists. "Chen does more real tech journalism than 90% of the hacks in the valley who rely on doled-out press releases. I think it will be discussed, but resolved fairly quickly."

Denton refuses to comment on the possibility that Apple will take out a civil action against Gizmodo. His legal difficulties seemed likely to ease once it became clear that both Apple and the police have discovered the identity of Gizmodo's source – the drinker who found the lost iPhone – and have approached him, although he has not been named. That takes away the onus on Gawker Media to protect its source.

But Gizmodo has come under fire for naming Powell as the Apple engineer who lost the iPhone in the first place. One of Gizmodo's bloggers complained that this had been "tackily done". There has been further criticism of the $5,000 the blog paid for the phone, an action that has been derided as chequebook journalism.

Soul brothers

But Denton remains utterly unrepentant. "Powell lost the phone!" he says, in response to those who quibble with the decision to name the engineer. He wrote on his Twitter feed, nicknotned: "Yes, we're proud practitioners of checkbook journalism. Anything for the story!"

The peculiarity of the face-off between Apple and Gawker is that in many ways they are soul brothers: they have both cultivated a youthful, futuristic, hip image and enjoy an overlapping following. Gawker readers are three times more likely than the average person to own an Apple product.

But the iPhone saga and the raid have underlined for Denton the contrast between what he describes as the mischievousness of Gawker and Apple's control-freakery. He doesn't blame Apple for wanting to shape its own coverage – that's what corporations do, he says. He reserves his disdain for the technology reporters who are prepared to go along with Apple's dictates in the hope of being thrown crumbs from Jobs.

Denton calls it "access journalism" and says he has been allergic to it since he first moved to the US in the 1990s to report on Silicon Valley for the Financial Times. "A few clueless geeks believe 'real journalists' wait for Steve Jobs or his publicists to make an announcement," he tweeted. "Screw that."

It's that kind of independence of spirit that has earned Gawker Media a loyal and growing support base of around 28 million unique visitors a month and revenue that analysts put at about $20m a year (Denton won't confirm this). That same spirit has informed Gizmodo's coverage of the iPhone drama - the site has continued to poke fun at Jobs, posting a Photoshopped image of Chen in chains in a torture chamber, even as the threat of criminal proceedings continues to hang over it. "It's been important throughout this to retain a sense of the ridiculousness of the whole affair," Denton says. "This is about a guy who lost a phone – admittedly a very important phone – after a night out celebrating his birthday. It's kind of preposterous that it's turned into such a gigantic deal."