Last Thursday, TechCrunch founder Michael Arrington and Tim Armstrong, CEO of AOL, announced the creation of a new venture capital fund named CrunchFund. But some folks, including David Carr, see a potential conflict of interest.
Here’s why: Arrington’s blog is arguably the most influential source of news about tech and silicon valley, and he evidently pitched this fund to Armstrong, who put $10 million of AOL’s money in it, or half of its total capital. (AOL bought TechCrunch for an estimated $30 million a year ago.) This is arguably equivalent to the editor in chief of the Wall Street Journal owning JP Morgan… and also reporting on JP Morgan and its competitors.
Folks involved with AOL and TechCrunch insist the blog and fund will be separate entities. But there’s an uncomfortable assumption of synergy between the two when they share a founder and a name. Many close to the announcement, including two of TechCrunch’s prominent writers, were not exactly thrilled by this move. This is a potential conflict of interest in the tens of millions of dollars—something that’s entirely unprecedented.
More unprecedented is Armstrong’s naive disregard: “‘TechCrunch is a different property and they have different standards,‘ Armstrong … said in an interview.”
I agree with him. Arrington himself doesn’t write about the companies he’s invested in, TechCrunch’s coverage of those companies is not always positive, and the guy embodies full disclosure. Every other writer picks up his or her own stories and writes candidly, including MG Siegler, who shares his view that “if AOL tries to bring in their own Editor-in-Chief to run TechCrunch, it will be a colossal fucking mistake.” Even if Arrington is mired in conflicts, provided they’re all disclosed, I still want to hear what he thinks.
But he should probably stop pulling histrionic shit like posting an ultimatum that begins with a picture from 300. He should also care that he’s undermined his blog’s credibility.
I’m surprised anybody thinks TechCrunch still had any credibility left to be undermined. “Histrionic Shit” should just be their subtitle. This whole affair is the perfect encapsulation of how much TC has always wanted to be the story. With any luck, it really will be the end, although since I don’t trust a thing MG Siegler has to say about anything, I’m afraid that it might not end up being the end of TC. Sadly.
Arrington is well-known as a childish dickbag. Of course everyone is gleefully talking about his ouster by Huffington.
See http://www.businessinsider.com/arrington… – where Arrington told a bunch of CEOs that if they gave TechCrunch exclusives on company news, he’d be sure they always got positive coverage at TechCrunch, even going so far as to point out blowjobs he’d given to GroupMe for going exclusive with him.
He’s a douche.
Looks more like a stock market blog than a tech blog, where are the actual tech posts there? Stock market blogs are usually just hot air heads talking anyway.
Arguably, you should take a few minutes, read through this again, and delete any arguably unnecessary words.
Hopefully, this will somehow lead to a point where Arrington ends up in prison for fraud of some sort, or at least very, very broke, within the next decade.
Of course AOL who owns HuffPo who owns TechCrunch derives 80 percent of its revenues from senior citizens who have no idea that they are paying membership fees for something that is free…yes, these are legacy AOL users from the days “before the web” when $20 would buy you a god awful PC client and ability to dial in and discuss the Clinton Administration with others…that’s where AOL got the $300 million purchase price to buy HuffPo in the first place.
So, when you’re based on a foundation like that…anything goes.
Whatever you think of Arrington, what I see in this story is another example of old media trying to pretend that if they freak out about explicit, disclosed conflicts, they can keep acting like they’re objective. It’s all a lot of bullshit. Nobody’s objective, but at least these kinds of potential conflicts are completely out in the open, and readers can decide for themselves. There’s no evidence that Arrington has written only positively about companies he has an interest in. This isn’t the first time he’s backed somebody.
@7 Every time there’s something new, people think the rules no longer apply.
Some rules are universal. Fairness will always be important in the world of influence. Maybe the problem is we didn’t do it well enough in the Old Media. That’s why we have WikiLeaks and Anonymous.
#7 is correct, there never was and never will be this illusion of fairness, but that in itself is as fair as anything.
If TechCrunch gets too conflicted, I’m sure I can find some other aggregator of silly valley press releases and publicist packages.
Count me in the “no big deal” camp, I guess.
TechCrunch is the Huffington Post of tech. It’s garbage.
Michael Arrington is a stupid fucking shitbag. It’s just AOL is even fucking dumber than him.
@7 – The news coverage of this whole this is largely irrelevant and a waste of time. What is worth thinking about is the casual disregard that Arrington has about conflict of interest. It’s clear that TC plays favorites, it always has, and Arrington himself has repeatedly made it clear that his coverage is dependent on what he personally thinks of the company. Perhaps you’re right that it’s better to have it all out in the open, the devil you know and all that. But to me, it’s another symptom of our continued vertical integration in corporations, as we now have an example here of “journalism” (sorry for the scare quotes, but TC really only barely qualifies with their toxic mix of re-heated pressers and solipsistic rambling) and venture capitalism getting into bed. I’m glad it’s out in the open, but I hope that the public’s reaction isn’t a shrug and to continue to read TC, as Arrignton’s stooges would have us do, but instead to discard TC entirely as having permanently dropped below an acceptable level of credibility.
TechCrunch only exists as a hype vehicle for Arrington’s friends’ startups.