By Peter Sterne 6:14 a.m. | Dec. 11, 2014 follow this reporter

The "gamergate" controversy cost Gawker Media "seven figures" in lost advertising revenue, the company's head of advertising Andrew Gorenstein said at an all-hands meeting on Wednesday afternoon, according to two people in attendance at the meeting.

The Gawker staff gathered at the Sunshine Cinema on Houston St. at 4 p.m. for the meeting, three hours after Gawker C.E.O. Nick Denton sent a 4,000-word staff memo announcing a new management structure.

The antifeminist "gamergate" movement, which accused Gawker Media of unethical journalism practices, began targeting Gawker's advertisers after Sam Biddle—then an editor at Gawker Media's Silicon Valley blog Valleywag—tweeted an obviously sarcastic endorsement of bullying.

"Ultimately #GamerGate is reaffirming what we’ve known to be true for decades: nerds should be constantly shamed and degraded into submission," Biddle tweeted on Oct. 16.

In response, gamergate enthusiasts began contacting companies that had advertised on Gawker in the past and Gawker's ad tech providers, and succeeded in getting a number of former advertisers—including Adobe and Mercedes-Benz—to distance themselves from the company.

Gawker's response to the gamergate controversy was inconsistent and confused. Then-editorial director Joel Johnson wrote an apology post of sorts and asked Gawker writers to be more careful about tweeting inside jokes that could be misinterpreted. In response, Gawker editor Max Read published a post stating that gamergate was willfully misinterpreting Biddle's tweets in order to criticize Gawker. Gawker should not apologize to critics who were acting in bad faith and looking for any excuse to criticize the company, he said. Biddle eventually apologized for his comments—an apology, two people at Gawker told Capital, that Gawker C.E.O. Nick Denton demanded over objections from Johnson and Read.

During Wednesday's all-hands meeting, according to two staffers present, Denton playfully referenced the controversy when Biddle asked a question.

Biddle asked how much the company was spending on its content management system Kinja, and Denton replied that it was about five times as much as his tweets had cost the company, leading to laughter from the audience.

Gawker's recently named executive editor Tommy Craggs defended Biddle, who is now a senior writer at Gawker. Craggs reminded Denton that it was Biddle who had written a recent Gawker story about leaked emails between Sony Pictures co-chairman Amy Pascal and producer Scott Rudin, which Denton had praised earlier in the meeting as an example of the kind of stories Gawker should write.

When another staffer asked Denton about the company's response to gamergate, Denton demurred and passed the microphone to Craggs—a gesture that some in the audience saw as an acknowledgement that he had made the wrong call in asking Biddle to apologize.

Ultimately, the gamergate controversy had more of an effect on Gawker's management than its bottom line. The company's revenue has increased 30 percent year-over-year, and Denton announced to the newsroom before the all-hands meeting that the 2015 editorial budget is $14 million. But the internal dissension over gamergate was one of the things that prompted Denton to replace Johnson with Craggs and name a seven-person managing partnership to run the company.

Johnson, who is still technically editorial director of Gawker Media until Jan. 1, was not at the meeting. Though Denton has offered him non-editorial positions at the company, he may leave the company altogether.

In the staff memo, Denton said that he and Johnson remained friends, though he also called his decision to hire Johnson as editorial director "a mistake." At the all-hands meeting, two people in attendance told Capital, Denton said that he and Johnson may no longer be friends going forward.