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Remember the Chinese blogging firm called BlogChina that was claiming it would go public with a $1 billion valuation? Well, it has since changed its name to Bokee and is now laying off one-quarter of its staff, or about 100 people, allegedly (unnamed sources) claiming that the Chinese blogging business isn’t such a big business after all. As others have pointed out, it is a surprise that a blogging company could hire 400 people in the first place (although remember how cheap it costs to employ folk over there). But that is indeed an awful lot of people, given the company isn’t making much money.

A China Interfax report quotes an unnamed Bokee.com director as saying that the decision was made because the board was “not confident about the future of the blogging industry in China.”

We find this odd, though, because this comes just a few months after Bokee raised $10 million in a second-round funding from…

several investors with U.S. ties, Mobius, Bessemer, Softbank Asia Infrastructure Fund and Granite Global.

And when we visited Granite’s Jenny Lee in Shanghai last month, she was upbeat about blogging, and said the opposite to the quote above. She believed blogging content was hot. So we contacted her about this latest story, and here’s how she responded:

“Not sure who this director is or any director who will say something like this. Certainly not GGV. Can’t comment any further because we don’t know where this came from.”

The layoffs may simply be a case of good business sense. The VCs are now involved, and perhaps realizing that the company has hired way too many people. But we don’t know enough to be sure.

Or perhaps, these gloomy predictions are just a Machiavellian effort to scare off investors from investing in competitors?