(Photo: Digital Trends)

Rupert Murdoch's less than two-year-old foray into digital-only publishing has officially come to an end with the news that The Daily, News Corp.'s iPad-only magazine, will cease publication on December 15th. Some of The Daily's assets and 120 employees will transition over to other News Corp. entities; Jesse Angelo, its editor-in-chief, will serve as the new publisher of the New York Post.

Mr. Murdoch wrote in a press release:

From its launch, The Daily was a bold experiment in digital publishing and an amazing vehicle for innovation. Unfortunately, our experience was that we could not find a large enough audience quickly enough to convince us the business model was sustainable in the long-term. Therefore we will take the very best of what we have learned at The Daily and apply it to all our properties. Under the editorial leadership of Editor-in-Chief Col Allan and the business and digital leadership of Jesse, I know The New York Post will continue to grow and become stronger on the web, on mobile, and not least, the paper itself. I want to thank all of the journalists, digital and business professionals for the hard work they put into The Daily.

The news comes on the heels of downsizing that took place at the iPad mag this past summer, when it went from 170 employees to 120.

News Corp.'s brazen bet on an iPad-only format raised eyebrows when it was announced two years ago, and it may have been the mag's inability to expand its audience within the cluttered app market that led to its demise. Likewise, the company's hacking scandal, which caused it to split News Corp assets like The Daily and The Post away from profit-filled pocketbooks like film and broadcast, may have prevented it from supporting money-losing ventures.

While many seem saddened by the news, new media evangelists on Twitter have already taken to gloating. "How well did that pay wall religion work at The Daily,@rupertmurdoch?" tweeted CUNY journalism professor Jeff Jarvis.

(Photo: Network World)

Microsoft Outlook now operates in-browser and is apparently a legitimate Gmail competitor? No flipping desks for Steve Ballmer today. [Wired]

Things are not looking good in iPad mag land. The Daily has laid off a 1/3rd of its staff. [AllThingsD]

Kevin Rose did an AMA, just in time for the release of the new Digg. It got less than 1,000 upvotes and apparently he didn't actually answer any questions. [Reddit]

Two online poker sites are paying millions in damages following fraud and money laundering charges. Guess the government called their bluff. [New York Times]

Times Square will broadcast the Mars landing on one of those gigantic screens. The space geek in us is currently fighting with the person in us who fucking hates Times Square. [NASA]

UBS lost $356 million in the Facebook IPO. Yikes. [The New York Times]

Punch!

A cabal of New York media notables has been working on the most secretive editorial product for the iPad since The Daily, and after more than a year in development, it's out today: Punch!, an "interactive satirical app" styled after a bookshelf lined with games like "Hedge Fund or Organic Farm?" and "Test Your Pop Culture IQ," is light on substance and heavy on delight. It's nothing like The Daily, cofounder and creative directory Dany Levy, founder of DailyCandy, told Betabeat.

Every feature, from "Closet Case," in which you can dress up Rick Santorum like a paper doll, and "Visit the New North Korea," a theoretical pitch to North Korea's tourism board, demands swiping. The app has no ads, although its first sponsored content will roll out in conjunction with the Tribeca Film Festival, which is its first sponsor. Eventually, there will be a fee to download, Ms. Levy said.

"It's a nice departure from DailyCandy. It's less sort of product pushing and more sort of commentary on pop culture," she said. "It's meant to be really easy on the eye and it's meant to be sort of just fun. There's not a lot of text-heavy stuff."

Punch draws some of its brand of subversive cleverness from the classic New York alt-magazines Radar and Spy. The format is influenced by mobile games. "Most news-y apps look like pages of a magazine stuck on an iPad. We set out to build an experience from the ground up that has nothing to do with print, and can only exist on a tablet," CEO and cofounder David Bennahum said in an email.

Eventually the app will update daily, but now it's updating "when culturally relevant stuff appears," Ms. Levy said.

Punch's other cofounders include Mr. Bennahum, who came up with the idea with former Radar editor Maer Roshan. Daniel Wyszynski, as chief technology officer, is also part of the founding team. Kate Elazegui, who has worked in art departments including New York, Money and Radar, oversees the design. The team of about 12 people including interns, Ms. Levy recalled, works out of an office on West 27th St.

The reception has been good, Ms. Levy said, although they won't know until some time tomorrow how many downloads the app got. It got mostly coverage in tech blogs, but that's all right, she said. "We're a technology company," she said, echoing Nick Denton's famous quip about Gawker. "We're a media company, but we're really a technology company."

Seed funding for Punch came from Betaworks, David Tisch (TechStars), Ms. Levy, Jason Calacanis (formerly of Silicon Alley Reporter and Weblogs, Inc.) and New Enterprise Associates.

flickr.com/photos/stewtopia

Local oenophile, investor and The Daily contributor Gary Vaynerchuk announced today he's retiring after five and a half years of producing "the most! passionate! wine program!" on the internet and the one that launched his career as an author and social media expert.

"It was never in the cards for me to spend my entire career being a 'wine critic,'" he said, marking the title with air quotes. "But wine will always be a massive part of my life ... will I come out with a wine brand one day? Maybe."

He doesn't know where he's going next.

"I just feel ready. I have a lot of ambition in life and there's a lot of things I want to accomplish," he said.

Mr. Vaynerchuk retired from Wine Library a few months ago, and has been producing daily wine videos at Daily Grape. But it was a false start, and making daily videos was taking a toll on even the insanely-energetic Mr. Vaynerchuk.

"I know this is disappointing for a lot of people," Mr. Vaynerchuk said to the camera. "I know some of you just discovered me. I know that for a lot of you I've beena part of your day-to-day life, like you literally come home and you watch the show. That's a big deal to me. That's something that I take very seriously and I feel selfish. A part of me feels like I'm letting you down. It does, and I hate that. But it never felt more right to move on and see what else is out there for me."

He finished the episode with a swish.

No word yet on whether the vlogger will continue his monthly social media tips for the iPad newspaper.

But earlier today, on Twitter: "Wait ...... did my retirement just cause an Earthquake #THUNDER" Mr. Vaynerchuk asked.

Mr. Yang.

Not everyone was pessimistic about Myspace, writes Dan Primack over at Term Sheet. At least one VC tried hard to wrest control of the company back from News Corp before the media dinosaur could drive it into the ground: Redpoint Ventures partner Geoff Yang, who tripled his money by investing in Myspace months before the acquisition. 

Mr. Yang, who previously invested in Excite, Ask.com and TiVo, currently has investments in Formspring, Scribd, and the gaming site Machinima.com. Mr. Yang wanted to spin Myspace out of News Corp, allowing the parent company to retain some stake, and turn it into a $1 billion company--sort of like the Prehype model.  For whatever reasons, News Corp said no, opting instead to slash costs and chase after the music market in an attempt to make the social network profitable.

The tale of woe reminds us of News Corp's current experiment with new technology it doesn't fully understand at the height of said technology's hype: The Daily--the world's first iPad-only newspaper!--which has not been considered a success and is currently bleeding talent. Any interest in tablet publishing, Mr. Yang?

"We've been downloaded almost a million times," said Clayman. "Which kind of puts us in the pantheon of large apps. We are consistently now in the top grossing apps."

The competition is rough, Clayman admitted. "You sort of take a look at the top ten, we're always there. Today we were number three. Tomorrow, somebody will spend a lot of money on Smurfs, you know, and will be number four."

While it seemed strange to many pundits for News Corp. to launch a publication that seemed squarely targeted at the demographic of USA today on device that was owned principally by early adopters, Clayman says that isn't the case anymore.

"I think, there was a perception, I certainly had it, that the iPad is this sort of early adopter medium, and it's tech geeks, you know, it's going to New York and San Francisco. And when you look at our subscribers and you map them out over the U.S., what we find is, hey're everywhere. I mean as we have as many subscribers between Florida and Texas as we do in L.A.."

When folks do share a story from The Daily via a service like Twitter, it gets posted to the web as a static image, which is a pretty poor experience. Users can't expand photos within the article or clink on any links to related stories or ongoing coverage.

Maybe that's why social activity has been falling, down to roughly a quarter of what it was back in early February when The Daily launched. According to a piece at the Nieman Journalism Lab, daily readers were sending out over 200 tweets per day the second week of February, compared to around 50 the last day of March.

Both of those data points are pretty alarming, considering that News Corp. has said hundreds of thousands of people downloaded the app. Sure, their audience probably is the trigger happy types from sites like Mashable or HuffPo, who rack up hundreds and even thousands of tweets on single story. But for a fully fledged news staff producing a sizeable paper each day, 50 tweets is an alarmingly low level of activity.

Source: mixergy.com

Gary Vaynerchuk will contribute to The Daily for a video feature called "The Next Wave." It's not about wine; it's about Twitter!

"Beginning this week, best-selling author and radio host, Gary Vaynerchuk, will be an on-camera contributor for The Daily. In this role, he will offer analysis on the latest developments in business, technology and social media trends,” the iPad app announced today.

Mr. Vaynerchuk is a talented Twitter-er who issues dozens of @ replies a day to keep his audience engaged.

The Daily's 15 minutes of fame ended a few weeks ago so here's a reminder from the press release:

About The Daily

The Daily is a first-of-its-kind daily national news publication built exclusively as an application for tablet computing. It provides readers the engaging experience of a magazine combined with the immediacy of the web and the need-to-know content of a newspaper, all while elevating user experience beyond the printed word. The Daily is a subscription-based news product, published 365 days a year, at the cost of $0.99 cents a week or $39.99 a year.

The exercise was fun, he wrote. "They seem like a nice bunch of folks, and I hope they succeed with their big publishing experiment."

Mr. Baio offered to hand over the keys to the Tumblr should a Daily fan express interest in maintaining the index, but so far the only comments on the ultimate Daily: Indexed post are "Oh man. Sad. And...ends my reading of the Daily" and a link to the final post in Gawker's short-lived "Already Over" feature. Haters are going to hate, but anyone who wants to continue reading The Daily's content for free on the web can catch a few links on The Daily's official Tumblr.

ajeffries [at] observer.com | @adrjeffries