The Web’s dominant traffic counter is in the midst of overhauling its traffic-counting system in response to years of complaints from publishers who insist that their traffic has been undercounted.

Turns out, the publishers were often right.

ComScore’s old data, for instance, say the Huffington Post attracted 9.95 million unique visitors in December. But its new numbers peg HuffPo’s December traffic at 20 million uniques.

The difference is that comScore’s (SCOR) old system tracked small panels of users and extrapolated their traffic patterns across the Web. But its new “hybrid” system uses panel data along with records generated by actual visits to the site, counted via tracking cookies. Publishers that cooperate with comScore (SCOR) agree to let the company “tag” every Web page on their sites.

“This is a much much better, much more methodologically rigorous way of doing this,” says Linda Abraham, comScore’s chief marketing officer.

ComScore has been rolling out the new system for months and says it can now use it to report on 25 percent of the 50 biggest sites on the Web. Another 50 percent of the top sites have agreed to work with the system, Abraham says.

ComScore lets publishers who are already clients participate in the program for free. But it will charge everyone else $10,000 a year, which the company says helps cover the cost of new servers and other equipment it needs to process the new deluge of data.

UPDATE: Some more detail on comScore’s fees, which generated a Web flare-up after this piece ran. Abraham notes that comScore’s set-up fee is $5,000, which she says covers implementation costs and gives publishers access to its data for six months; comScore charges publishers who want to keep receiving reports an additional $5,000 for each subsequent six-month period. However, Abraham notes, “If you choose not to purchase report access, you are free to do that, and we’ll continue to report you as hybrid, free of charge, as long as you continue to beacon correctly.” For more from Abraham, see her response to Mahalo CEO Jason Calacanis’s criticism; here’s the company’s blog post on the subject.

The new system doesn’t necessarily generate a traffic boost. AOL’s (AOL) Living channel saw its numbers decline by two percent in the new system, for instance, and its radio site saw traffic drop by 20 percent. AOL’s overall traffic, though, is up nine percent by comScore’s count.

Hybrid measurement is particularly kind to small Web sites and those that generate a lot of traffic from users who visit while at work. Both categories have always been difficult for comScore to measure using panels.

TheStreet.com (TSCM), for instance, has watched its traffic shoot up 86 percent under the new system, to 3.3 million uniques. That’s still much less than the site itself reports–in its last quarterly filing, the financial network reported an audience of 8.1 million uniques.

The fact that comScore is tracking some Web sites using the new system and the rest of them with the old one will make things a bit sticky for some time. The company has stopped releasing its monthly Top 50 list until May, when it says it will have moved almost all participating sites into the hybrid system.

But some sites won’t end up working with comScore at all, which means that comScore will measure them with its old panel methodology. At some point, the company will be presenting apples-to-oranges numbers when it compares different sites.

Does any of this really matter? Yes and no.

Ad buyers do pay attention to comScore rankings when figuring out where to place their money, even as Web publishers have presented their own, higher numbers from their own server logs. For some sites, the new data will make their pitches more compelling.

On the other hand, this does nothing to solve the real problem facing most publishers: They can’t sell ads against all of their inventory, no matter who’s counting it. And a measurement system won’t ever be able to help with that one.

I know that “The Daily Show” host Jon Stewart does not need even more praise for his spot-on comic and very real jabs at the CNBC financial cable network and its milquetoast coverage of the financial crisis, pre and post.

The silliness that prevails too much over doing serious and rigorous reporting that Stewart takes perfect aim at is a major problem.

Taking CEO spinning at face value and letting them yammer on on air without being challenged much at all has always been excruciating to watch at best and woefully irresponsible at worst.

But, to my mind, the most important thing that he elicited out of CNBC’s most famous stock jester, Jim Cramer, was the part of the interview discussing using the malleable press to float fictional rumors about companies in order to make money on the negative news.

While Cramer at first tried to deny he did it, Stewart had the videotape of the “Mad Money” host talking about the practice, specifically in regard to Apple (AAPL).

His appalling idea to make a quick buck? Making it up that the mobile carriers did not like the iPhone right before Macworld, in this case in 2006.

“And this is very easy because the people who write about Apple want that story, and you can claim that it’s credible because you spoke to someone at Apple, because Apple doesn’t…comment,” said Cramer cavalierly, as if he was not talking about a way to essentially steal other people’s money and hurt Apple unfairly, to interviewer Aaron Task, then at Cramer’s own TheStreet.com.

“So it’s really an ideal short. And again if I were short Apple, I’d pick up the phone and I’d do that today.“

Bernie Madoff would be so proud, if he wasn’t otherwise imprisoned for life!

Kind of puts all those Steve-Jobs-Is-Dead-Right-Now rumors of a few months ago into a new light?

It’s been obvious that the legendary Apple CEO has been quite ill from his appearance alone.

But, as BoomTown has always maintained, the rumors written without any serious reporting about him were also a troublesome issue because it was that clear short-sellers played a large part in stoking the fear about his imminent demise, given how important Jobs has been to Apple.

(Although, this has not seemed to stop Apple from releasing a lot of really cool stuff of late, like the new Shuffle, which Walt Mossberg reviewed here.)

While Apple has not been adequately forthcoming, either, about the Jobs situation, that does not mean the press–as Stewart correctly points out–should not try to actually do its job and dig for what is really going on rather than just slap up unsubstantiated blather.

“It’s not a f@#*ing game,” said Stewart perfectly. Indeed not.

You can see Cramer cynically discussing the Apple stock manipulation tricks at the 6:45-minute mark of Part 2, but here is the entire Stewart well-deserved roasting of Cramer in three parts.

(And at the bottom is the Task interview with Cramer too.)

Part 1:

Part 2:

Part 3:

TheStreet.com Interview:

Nope. Advertising was down 21 percent at TheStreet (TSCM) during its last quarter, and the company expects things to get worse. “Early indications suggest that the year-over-year decline in advertising revenue that we saw in the fourth quarter will increase in the first half of the year,” Chief Financial Officer Eric Ashman predicted in the company’s earnings release.

But wait: Unlike other online businesses, TheStreet isn’t completely dependent on advertising–it sells expanded access to its content via subscriptions. Won’t that help? Nope. Ashman: “The pressure on the subscriber base is likely to continue as many investors are no longer market participants, and job reductions in the financial sector reduce the pool of interested consumers.”

The one bit of hopeful news: TheStreet has a nice cash pile–$76 million at latest count–and no debt, and there aren’t many media companies that can say that. But that isn’t impressing investors, who don’t seem to think the company is worth much more than its cash on hand. As of yesterday afternoon, they were valuing the entire operation at a little under $81 million.

Huffpo’s newest round values the company at about $100 million, which means its investors think it will be worth much more one day. That’s the same value, more or less, that investors place on TheStreet (TSCM), even though it generated some $65 million last year and has about $80 million in cash on hand. McIntyre:

Huffington has several important advantages over TheStreet. For starters, it does not rely on one person for most of its traffic. If Jim Cramer left TSCM, the company would be in real trouble.

Second, Huffington has diversified beyond it political news base. Over the next year or so, it will become clear whether that was a good idea or not. Adding “style” and “entertainment” sections puts it into competition with a lot of other online success stories.

Third, Huffington aggregates a lot of content from around the web. The cost of doing this is remarkably low. The company pays little if anything to most of its bloggers. TheStreet has a relatively large staff and produces most of its own content.

The final difference between the two companies is probably the most telling. At its current rate of growth, which could be hurt by the end of the 2008 election process, Huffington may double in size again over the next year or so, if its efforts to diversify its content works.

It would be hard to find analysts who believe TSCM is going to expand its audience or revenue at a rate of 100%.”

I can think of some counter-arguments to this, but they’re half-hearted: TSCM’s affluent readers should be worth more to advertisers than Huffpo’s; TSCM still has a revenue stream from subscribers to buffet it from ad market turmoil; Huffpo’s aggregation model isn’t unique and could be replicated by anyone who wants to hire some devilishly clever Web editors, etc.

But better to acknowledge that the HuffPo crew have built something very big, very fast. And that anyone who does that gets rewarded for it, even in an econalypse.