An employee of BuyWithMe who was laid off today, along with what he estimates to be about 55 percent of the staff, says the company went under because it got greedy.

"They were trying to raise a hundred million dollars at a $500 million valuation and there were no takers. If they had done a more conservative round, the company wouldn't be in this kind of trouble."

This employee says there is no hope of raising a round now and that the company is looking for a buyer. "They are hoping to just sell and get some of the value back."

BuyWithMe had been on a buying spree itself, acquiring six companies in the last six months. "The only one they paid a lot for was Edhance. And that company is the only reason a buyer would be interested."

The employee said people were expecting news around Thanksgiving, but today's layoffs come as a big surprise. "We had no idea. They didn't offer us severance or anything."

Asked whether this was a reflection of conditions in the daily deal / group buying industry as a whole, our source demurred. "Nobody has figured out a profitable model yet, but if someone does, then maybe they could make it work."

Image via Gadling

Betabeat received an email this morning from Grant Martin, Editor-in-Chief at the travel site Gadling, alerting us that Jerry Guo, the notorious Newsweek writer and startup scammer, had a troubled history with AOL as well. From Mr. Martin's email:

Jerry was a blogger for Gadling for a couple of years and then was removed in November of 2008. Curiously, his bio photo on Gadling was of him holding a panda.

Jerry was terminated because he
was taking old, past published posts and tucking them into the recent (but out of sight) queue so that our payment system would automatically sweep through and double pay him.

That same week we found out that he was trying to farm out blog posts for our site for $5 each on elance. Still have the screenshot on that one.

Jerry's tenure at Gadling was full of him trying to work our system, squeeze us for more money and earn free travel. I'm glad that he's gone, but I wish that I had been more proactive in reaching out to his other/future editors.

In talking with editors at Newsweek and The Atlantic for this story, Betabeat often heard the same refrain. Typically editors regretted not doing more to out Mr. Guo as a bad seed, but felt it was wiser to sweep things under the rug and protect their own publication. This allowed Mr. Guo to hop from one big name to the next. Since 2008 he has written for the NY Times, Washington Post, Newsweek and Foreign Affairs.

Check Out Our Slideshow of Jerry Guo's Adventures Around the World>>

Image from Widget and Stone

We can't help but feel a little responsible for this one. Yesterday Betabeat ran a story about an email from Moviefone Editor-in-Chief Patricia Chui informing freelancers that they were going to be let go, but offering them the opportunity to participate as part of their "non-paid" blogger system.

Well now Kara Swisher reports that Chui got the boot herself.

This was the second public gaffe for Chui in the past month. Moviefone sent Techcrunch writer Alexia Tsotsis an email asking her tone down the snark in a post about the film Source Code. After Tsotsis called them out, Chui wrote a blog post defending her company's cozy relationship with the film studios.

UPDATE: An AOL staffer from a recently downsized website writes in to say -

It's embarrassing that such an experienced journalist bought the AOL party line that Chui was responsible for the "you're fired, now work for free" message.

We got handed that message long before Patricia Chui's email. Execs gave it during call-in meetings during the merger. Everyone expected it, HuffPo promised we were wrong, and we were right.

Chui was a scapegoat. Her firing means nothing. Everyone left at AOL will be a lot more callous toward bloggers and their journalistic responsibilities than she was.

It is an important, will-affect-shareholders issue that AOL's content team will continue to destroy what was left of journalistic integrity there, and that they'll hide behind Chui's firing until the next scandal breaks.