Gawker said it had paid an unnamed man 'low four-figures' for the story -published just one week before mid-term elections, in which Miss O'Donnell is running for Senate.
In an anonymous post, the 25-year-old Philadelphia man claims Miss O'Donnell was 'a decent kisser' - but that she told him she was a virgin.
He also claims the two did not have sex and makes intimate comments about her body and grooming.
Gawker's sister website Jezebel reported that the post had 180,000 hits in two hours.
But it has sparked a backlash against Gawker for publishing the story from media on both the left and the right - as well as commenters on Twitter and Facebook.