Inside the $3B 'Gossip Machine'

The behemoth gossip industry relentlessly ferrets out any and all scurrilous details about celebrities, churning out "rivers of cash" that amount to about $3 billion a year, and often tossing privacy laws by the wayside, reports the New York Times in a lengthy look. And thanks in part to the media feeding frenzy that erupted over Arnold Schwarzenegger's love child, there is a growing movement to shut down that explosion of personal information of dubious legality. “They ought to maybe hook up with the CIA,” said the judge presiding over a case involving Michael Lohan, after seeing the volume of private information the major gossip sites dug up.

“It’s a business,” says Lohan. “If they want to write stories about me, why shouldn’t I get paid to tell the truth?” “We’re trying to build what they call addicts online,” David Perel, the managing editor of Radar Online, which often posts more than 30 exclusives a day. With gossip sites willing to pay millions for top stories—photos of Michael Jackson in the coroner's office could have fetched $2 million—but with rehab and medical workers earning as little as $22,000 a year, there's little sign that those paydays are going away. (More RadarOnline stories.)