History is repeating itself. During the last internet bubble, Rupert Murdoch's News Corporation used its Page Six brand to launch a new entertainment website, Pagesix.com. The property has had an even shorter life this cycle: Pagesix.com, which was largely independent of the newspaper's Page Six print column, is being shuttered immediately; it had been live only since December. The URL already redirects to the New York Post's main website, and the site's staff have had their access to email cut off. Managing Editor, David Boyle, told the site's Los Angeles staff. "Given the difficulty in the economy, it was not the right time for this launch," said Jennifer Jehn, one of the site's managers. A total of 18 editorial and support staffers will be let go and three reassigned within the New York Post.

So, are readers finally tiring of the torrent of shallow news about no-name celebrities, as Salon believes? The reasons for the abrupt decision are more prosaic, and depressing. Pagesix.com experienced its first day with more than 1m pageviews, last week, when the site published a gallery of photographs of Eliot Spitzer's hooker, Ashley Alexandra Dupré. But it was not making sufficiently rapid inroads into a market dominated by Time Warner's TMZ, and gossip blogs such as Perez Hilton. But the decision to shutter the spinoff gossip site likely owes even more to the Australian media mogul's pessimism about the US economy, and advertising spending.

Murdoch, disclosing a slowdown in ad revenue at his Fox television stations and newspapers, has predicted a "temporary downturn for a year or so." Other media companies, such as the New York Times, are also suffering from the advertising downturn, and have cut costs by making piecemeal layoffs.

The News Corporation boss, who has funded a decade of losses at his tabloid, the New York Post, is typically a patient investor. But he can also be decisive. He will be wary of overstretching the company, particularly after stretching to acquire the Wall Street Journal. During the last big advertising downturn, Murdoch nearly lost control of his company.

Anyway, before competitors gloat at News Corporation's reverse, they should remember this: if advertising spending has indeed turned down, the downturn will not spare web sites. The web's boosters hope that newly cost-conscious marketers will simply redirect their budgets from print and television to the web; that was the hope during the last recession, and it was wishful thinking, then and now. Murdoch will be embarrassed for a day; other media groups will be subsidizing loss-making websites for months before they come to the same conclusion.