Celebrity tabloid blog PerezHilton.com is very popular. With a WebSearch.com ranking of 698 and an Alexa rank of 1,539 its fair to say there are a lot of readers. The site also happens to make a whole lot of money — estimated at around or over $100,000 a month.

With a popular blog making a whole lot of money you’d think they’d ensure that all images they posted were properly licensed. Wrong. The NY Daily News reports that seven Hollywood photo agencies are ready to sue unless the site’s owner, Mario Lavandeira, starts paying royalties.

PerezHilton isn’t the only one doing this. I can’t recall ever seeing any copyright credits on any of the many celeb blogs that dot the web. There is a grey area between fair use and violating copyright. Posting print-sized images without permission or credit isn’t going to cut it; even if you write a little dumb comment on it in Microsoft Paint.

Plenty of web site owners get away with blatently violating copyright law. The bigger guys use the DMCA (user submitted content, e.g. eBaumsworld and CollegeHumor.com), the smaller guys just fly under the radar. If you are big — or have any plans on being big — make sure you do things the right way.