Scott Jones, serial entrepreneur, has received an additional $8 million in funding from Mort Meyerson, formerly of Perot Systems and EDS, for his startup ChaCha. You'd think with such wealthy backers, Jones wouldn't have to tap the public till. But no: ChaCha was recently granted $2 million from Indiana's 21st Century Technology Fund administered by the Indiana Economic Development Corporation to build new, innovative features. What are these innovations that will debut next year, and how did the already well-funded startup receive this state-funded aid?

In a post on Silicon Alley Insider about Gilt Groupe, a website which runs private couture sales for an invite-only clientele, disgraced stock analyst Henry Blodget includes the following disclaimer:

We hear that Marcy Simon, the PR consultant briefly installed in Google's New York office, is more than a mere mistress to Google CEO Eric Schmidt. The rumors are resplendent: That Schmidt funded Simon's acrimonious divorce; that he is separating from his wife Wendy; that he is buying a $25 million Manhattan apartment in which to live with Simon. But why should anyone care about such tawdry personal details? If the latter two bits of hearsay have any truth to them, then shareholders should be extremely worried.

Marcy Simon, left, the girlfriend of married Google CEO Eric Schmidt, is no longer a PR consultant at Google. So much for her reign as the Duchess of West Chelsea. The terms of separation are unclear: Simon has maintained to friends that she quit, while other insiders say Google executives Elliot Schrage and David Lawee fired her, with Schmidt stepping out of the matter. Schmidt's recusal may not be the only way in which he's staying out of Simon's affairs. Rumor is that Schmidt is now seeing Kate Bohner, right, a journalist and ex-wife of author Michael Lewis. No word on whether a Google gig is forthcoming for Bohner, though she does have a channel on the Google-owned YouTube.

A Valleywag tipster whispers that a company that had made the initial cut of 20 companies for the Techcrunch40 conference — back when it was known as "TechCrunch20" — got bumped when conference organizers "doubled down" and expanded the list to 40 startups. The company's sin? Competing with a startup funded by one of TechCrunch40's four VC sponsors. The competitor got bumped, and room was made for a sponsor-backed startup. "Ah, the Valley mafia at its finest," the tipster concludes. Of course. Sand Hill Road was built on conflicts of interest.

Whom the gods would destroy, they first make mad. I'm not sure if Euripides, the Greek playwright, had Google's management team in mind when he wrote that, but it sure fits. Google, despite the occasional lost deal, billion-dollar lawsuit, and PR black eye, continues to succeed spectacularly as a business. "Somehow they continue shitting more money than you or i could realistically comprehend," writes one Valleywag reader. Indeed. And that money is driving the people who run Google insane. CEO Eric Schmidt's cosseting of girlfriend Marcy Simon with a plum PR job is just the latest, most blatant sign of that madness.

A Google spokesperson obliquely concedes, in a follow-up item on Valleywag's scoop, that Marcy Simon, CEO Eric Schmidt's gal pal, is working as a consultant at the company. [New York Post]

Marcy Simon, Valleywag has learned, doesn't just have a coveted desk and a phone line in Google's cramped New York offices. She also has a seemingly hot assignment: PR for the yet-to-be-launched Googlephone. All this, simply for serving as married Google CEO Eric Schmidt's piece on the side? Yes, that's right: Schmidt's girlfriend, despite having no experience in wireless or telecom, is handling the launch of one of Google's most-whispered-about initiatives. Why the Duchess of West Chelsea, as Valleywag has dubbed Simon, is handling this, and not say, David Krane, Google's telecom-savvy director of corporate communications, is telling about both Schmidt's character and the fate of the phone project.

When Larry Page and Sergey Brin hired Eric Schmidt as Google's CEO because, among other reasons, he'd been to Burning Man, they must have known they were getting a boss with alternative values. But did they know that their newly hired grownup would prove to be Google's adulterer supervision? Schmidt is famous for having a series of girlfriends, despite being married, to whom he's reportedly promised marriage. Ones known to Valleywag include Rita Koselka and Marcy Simon. But it's Simon, his current fling, who might concern Page and Brin. Why? Because Simon has apparently wangled a desk and a phone line in Google's cramped New York offices.

Updated below. Why is Robert Scoble, videoblogger, using the immature, unstable Kyte.tv website to host his latest videos, when he's a vice president of PodTech, a rival video venture with its own video-hosting infrastructure? Isn't that a bit like Valleywag's Megan McCarthy, say, cracking jokes on Julia Allison's blog when she should be filing party reports for Valleywag? Clearly, PodTech is going under, and Scoble needs to keep his options open. His delusion that he can work anywhere he wants has been dashed — his dream job at Facebook doesn't appear to exist. Jason Calacanis's Mahalo may be a perfect match, but we suspect that Kyte is Scoble's emergency backup. Scoble even hints at such, telling readers, "I'll have more to say about Podtech soon."

TechThatOut believes it's caught Morgan Webb, host of derivative, me-too, copycat tech videoblog WebbAlert, exposing her ... scalp? The screenshot is a bit blurry, raising questions about whether Webb is actually missing some follicles or just had her hair pulled back too tightly. But it does make one wonder why TechCrunch editor Michael Arrington went gaga and declared her "fairly hot." A quick survey of Valleywag's temporary officemates got a different ruling: "fairly scary." But there's something equally scary, and even balder, about WebbAlert.

Tim Armstrong, left, the Google sales chief ridden with conflicts of interest, is drawing unconflicted interest from junior staffers. Apparently the hunky executive is being tracked via Twitter, so ga-ga Googlers can maximize their eyefuls of Armstrong. Silicon Alley Insider's Henry Blodget, whom we hadn't previously thought as a connoisseur of manflesh, also recommends Google's Tom Phillips, right, a cofounder of Spy, as a target for Twitter stalking. So, readers, any other denizens of Google's Chelsea office handsome enough to deserve such excess SMS interest? Leave a comment or send in a tip, and we'll run a poll later.

Boosterism is a proud middle-American tradition, deftly parodied by Garrison Keillor. But even a fabulist like Keillor would be hard-pressed to come up with townspeople as self-satisfied and uncritical as the boosters of Bloomington, Indiana, who have stood relentlessly behind local search startup ChaCha. Despite the questions Valleywag and others have raised about a deal between ChaCha and Indiana University, whose president, Michael McRobbie, is a former ChaCha board member, the townfolk have stood steadfastly behind their local tech hero. Take, for example, the reaction to a story in the Indiana Herald-Times calling for "aggressive disclosure" (subscription required) regarding the deal. The conclusion was similar to ours and seemed obvious — but not obvious to at least one local booster.

After Valleywag pointed out the unseemly appearance created when Six Apart funneling donations from users' purchases to charities tied to investor Joi Ito, the company — right in keeping with its recent problems living up to its ideals of transparency — never publicly conceded the existence of a conflict of interest. But today, Ito, to his supreme credit, did just that on his own blog — and even acknowledged Valleywag in the post. Well done, Joi. If only the blog-software company you backed could learn from your example.

TechCrunch editor Michael Arrington has left the board of troubled start-up Foldera. Uncov states the situation eloquently: "This company has been fucked for awhile and the condom just broke." [uncov]

LiveJournal, the online community run by blog-software maker Six Apart is rowdy, contentious, and mostly undeserving of attention. But occasionally its cantankerous users, in their perpetual, pointless war with Six Apart management, make a decent point. For example, this one: Why do three of the four nonprofits chosen to benefit from a recent sale of paid LiveJournal accounts have ties to early Six Apart investor Joi Ito? Ito no longer serves on Six Apart's board, but he's the CEO and founder of Neoteny, a Japanese venture capital firm which provided Six Apart with much of its initial backing. Neoteny chairman Jun Makihara has a board seat. And Six Apart CEO Barak Berkowitz previously worked for Neoteny. I'd never say the organizations Ito's linked to — the EFF, Creative Commons, and Witness — aren't doing good work. But it all seems very cozy. So cozy that the supposedly pro-transparency company didn't care to disclose the fact to customers.

More than one person has described TechCrunch's Michael Arrington to me as "touchy." Which is putting it mildly. Try "hypersensitive." Or "thin-skinned." Or "prickly." The latest example? Arrington recently posted about the naming of three people to the advisory panel of TechCrunch20, his upcoming startup conference: French blogger Loic Le Meur, angel investor Ron Conway, and Sarah Lacy. The panelists, unexpectedly, proved controversial — and Arrington, predictably, overreacted.Commenters on TechCrunch started attacking Le Meur's politics and the conflict of interest faced by Conway, who might find himself judging startups that compete with companies in his portfolio. (No one, as far as we know, wrote anything bad about Lacy, so we will: Why on earth is the savvy former BusinessWeek reporter subjecting herself to Arrington's caprices?) Arrington first started deleting the critical comments — and then yanked the post itself. Chalk it up as another example of the startup critic who can dish it out, but can't take it.

The "Rahodeb" incident, in which Whole Foods Market CEO John Mackey was caught touting his company's stock on Yahoo Finance message boards, is not the first time Mackey has shown extremely poor judgment when it comes to the Internet. Around the same time he started posting on Yahoo Finance as "Rahodeb," a handle taken from the name of his wife, Deborah Morin, he launched a dotcom called WholePeople, which turned out to be an out-and-out disaster, as I wrote back in 2000. But as I reported that story, I also heard persistent rumors that there was a lot of sleeping around going on at Whole Foods, starting at the top. Sounds like the kind of thing we approve of. In most cases. But not the way Mackey did it. Here's why:

Associated Content, the startup backed by top Google sales executive Tim Armstrong, is controversial because of accusations — hardly denied by CEO Geoff Reiss — that the company is gaming AdSense, Google's system for placing advertisements on other websites. Specifically, Associated Content pays bloggers to write articles on niche topics designed to attract lucrative ads. The problem with the scheme, of course, is that Google's advertisers are interested in placing ads on relevant, high-quality websites, not pages ginned up solely to make a buck. But what's most suspicious about AC is how well, and how quickly, it pays people to gin up those articles.The blog AllSux.com recently reviewed AC along with competitors Helium and Triond. AC's distinction: Rather than just paying per pageview, Armstrong and Reiss's company pays bloggers upfront. What's the big deal about that? For that business model to make sense, Associated Content must have a very good idea of what keywords are worth, letting it predict how much AdSense revenue a given article will generate. And that suggests that Associated Content has hacked Google's algorithm, reverse-engineering it to profit at Google advertisers' expense. Not a very seemly activity for Armstrong to preside over. How much longer will Google, which up until now has sanctioned Armstrong's side venture, allow it to continue?