Seed did a terrible job at managing this -- they should have known there would be resistance to a name like PepsiCo sharing billing on ScienceBlogs, and they should have consulted their bloggers about how to announce it, how to label it, etc. At the very least, they should have given them a heads-up!
I'm also a little puzzled by what PepsiCo is going to talk about. The intro post talks about using "behavioral economics" to "improve health outcomes around the world"... I thought PepsiCo mostly used behavioral economics to sell people stuff?
That said, I do think the reaction is a little overblown. Karl Zimmer eloquently sums up what a lot of the angry SciBloggers are saying:
...Bly seems to justify the Pepsi affair by saying Scienceblogs has hosted blogs from corporations before. Somehow that means this new situation is okay. I can’t stop thinking of the line from As You Like It, “More villain thou.”
PepsiCo is more "villainous" than Shell? I'm not so sure about that, guys... Pepsi might be shortening lives, but they aren't setting us up for an ice-cap meltin' Armageddon...!
I suppose it feels more dirty co-residing with a shill blog for Pepsi than a shill blog for Shell, because the latter is -- in practice -- more concerned with marketing to lobbyists, while the former is targeting the consumer. It's not like if Shell stops advertising, people are going to stop consuming fossil fuels. But if Pepsi stops advertising... So yeah, I guess I can see that. Allowing Shell to sponsor a blog on ScienceBlogs is not going to make a substantive difference in the public conversation about fossil fuels (unless they go all AGW-denialist, but obviously nobody is going to stand for that on ScienceBlogs). On the other hand, we could imagine PepsiCo influencing the public conversation to their benefit.
In any case, it will be interesting to see how this plays out.
Update: I may have just changed my mind about how serious this is... reading about all controversy is making me crave a cola. Seriously. In fact, I think I might go get one. I rarely drink soda (I'm a coffee and beer guy personally), probably no more than a couple times a month usually. So this is not a typical craving for me. Wow, it's working already...