More web 2.0 cred showdown news has broken since I wrote on the front page about this advertising controversy involving blogs using Federated Media. Now crunchnotes.com is sounding this rather bitter note:

‘I’m now pissed off at every single person involved in this. Denton for bringing up a non issue to attack competitors, Malik for folding immediately and making it seem like someone did something wrong, and now Battelle, our agent, saying he wished we had made a disclosure on this.

Any competing ad networks out there want our business, and promise not to throw us under a bus whenever Valleywag attacks?’

This story seems to be breaking very quickly–and Battelle is admitting that “we certainly stepped in it.” In what? Microsoft money?