December 21, 2007 | Los Angeles Times

By Michelle Quinn

SAN FRANCISCO — At first glance, it seemed Goliath succeeded in crushing David.

After a long battle with Apple Inc., a Harvard University senior said Thursday that he would shut down Think Secret, the website known for landing scoops about the company’s latest products. Apple was peeved by the leaks and sued him in 2005.

The site’s demise prompted outrage from some Apple followers, but in this case David — aka Nicholas Ciarelli — got his own happy ending: freedom from having to run the site anymore. Ciarelli, 22, graduates this spring and said he was more than ready to abandon the site he had run since he was a 13-year-old Mac fanatic.

He also received a payment from Apple, according to a person familiar with the case. Both sides declined to discuss details of the agreement.

“For some time, I’ve been ready to move on,” said Ciarelli, a social studies major. “My hope would be that my professional career is not defined by a project I launched while in junior high. Now I have that opportunity.”

For its part, Apple probably was relieved to say goodbye to a pesky rumor site that broke stories on its upcoming products before Chief Executive Steve Jobs could announce them in his choreographed keynote speeches at Macworld conferences.

Despite the buzz that those leaks build for Apple products, the company is famous for meticulously controlling its product launches.

The Cupertino, Calif., company also saved itself the embarrassment of having its case, in which it accused Ciarelli of misappropriating trade secrets, tossed out.

The fight highlights a collision between Apple’s culture of creating innovative products under great secrecy and the blogosphere’s ability to reveal those secrets.

With its “Got Dirt?” online solicitation, giving tipsters multiple ways to share information anonymously, Think Secret is among a host of websites that are hybrids between journalism, rumor mills and celebrations of Apple’s products.

Industry analysts and journalists at mainstream news organizations frequently rely on these sites, including MacRumors.com and AppleInsider.com, for tips leading up to Apple events.

“Steve Jobs is like a little Dutch boy putting his finger in the dike,” said Andrew Leckey, director of the Donald W. Reynolds National Center for Business Journalism at Arizona State University. “But the water is higher than he first thought.”

Although terms of the settlement are confidential, Ciarelli said he did not have to cough up his sources for the stories that prompted the lawsuit, as Apple wanted.

Growing up in upstate New York, Ciarelli worked on Think Secret under the pseudonym NickdePlume before and after school — and even during cross-country family trips. His first big scoop came in 2001 when he reported that Apple would unveil a music player — several weeks before the iPod was first shown to the world.

Apple regularly sent him letters asking that he stop publishing rumors. But it didn’t sue him until January 2005, shortly after Think Secret reported that Apple planned to introduce a $499 Mac Mini computer and the iLife ’05 software suite at the then-upcoming Macworld.

He was unmasked shortly thereafter by a story in the Harvard Crimson, the university’s student newspaper of which Ciarelli is now an executive editor.

Apple also challenged two other sites, AppleInsider and O’Grady’s PowerPage, seeking to force them to disclose their sources. But it lost; a state appellate court ruled that the 1st Amendment made no distinction between online and traditional journalists, giving the next-generation reporters protection under California’s shield law that provides legal protection for confidential sources.

Lawyers for the Electronic Frontier Foundation successfully countersued Apple for the bloggers’ legal fees.

But the Think Secret case dragged on uneventfully for more than three years. Ciarelli kept reporting rumors, and Apple kept sending him “cease and desist” letters, said his lawyer, Terry Gross.

“Apple was acting like a bully,” Gross said. “Apple knew it didn’t have a case.”

Kurt Opsahl, a senior staff attorney with the foundation who advised Ciarelli, said Apple faced losing the case and had to find a way to delicately extract itself.

“I hope Apple learns a lesson from this — it’s not wise to sue the fans, and if you do they’ll fight back,” Opsahl said.

Apple spokesman Steve Dowling declined to comment other than to say the company was pleased.

Brian Lam, editor of Gizmodo, a technology blog, said Apple appeared to be letting up after years of fighting rumors and refusing to acknowledge publications that printed them. The media landscape has changed, blogs have gained credibility and mainstream outlets publish more rumors, he said.

Ciarelli isn’t sure what he will do next — maybe start a business or pursue journalism.

“I didn’t enjoy being sued by Apple,” Ciarelli said. “But I’ve always been an enthusiastic fan of Apple products. I still am.”