Francisco's project Vator.tv, which lets companies post elevator pitches, was backed by Paypal co-founder Peter Thiel. MarketWatch was aware of the venture and asked Francisco not to write about Thiel or the companies featured on Vator.tv. But the WSJ noticed a number of articles where that separation didn't hold, and plenty of bloggers picked up on the story. A few minutes ago, Bambi posted on MarketWatch to say she is now leaving to work on Vador.tv full-time, almost certainly pressured to make the decision after the fracas that erupted.
Bambi likely doesn't see it this way, but it couldn't have worked out better: most tech bloggers - and even members of the mainstream press - are now familiar with the name Vator.tv as a result of the incident, and the startup will probably be one of the most talked about subjects today. Vator.tv isn't that great right now, and most bloggers wouldn't have given it much time: thanks to a little controversy, however, it's attracting buzz, and buzz is the lifeblood of the blogosphere.
Will Vator.tv take off? I can't say I'm impressed by it, but a good backstory or prominent founders/investors can heap oodles of attention of startups that have yet to prove themselves: Joost (Skype founders), Citizendium (Wikipedia cofounder), Wikiasari (Wikipedia founder), Rupture (Napster founder) and Socializr (Friendster founder). No one is saying these startups won't work, but most were hyped a long time before they actually delivered anything, solely due to prominent founders/investors. And actually, sometimes they really do suck.