TechCrunch had a complicated holiday weekend. On Thursday, news emerged that Michael Arrington, the Silicon Valley blog's founder, longtime editor and opinionated public face, was starting his own venture capital firm with funding from his bosses at AOL and would inevitably invest in the same companies that TechCrunch covers. At face value, we sensed that the new situation created a big conflict of interest--some other journalists got downright angry about it. Within hours, TechCrunch writers shifted into defense mode, The New York Times's media critic David Carr wrote a reactionary column, TechCrunch writers shifted into offense mode, confusion over Arrington's future involvement at the blog mounted, and by Monday night, TechCrunch's MG Siegler declared bluntly, "TechCrunch as we know it may be over."
The series of events is playing out like a Shakespearean tragedy. On stage, TechCrunch's stable of bloggers are conspicuously warring with the rest of the journalism community over Arrington's new fund and how it will affect TechCrunch's coverage. To sum it up, writers like Siegler and his foul-mouthed British coworker Paul Carr defend TechCrunch with two arguments. One, Arrington has always disclosed his (many) conflicts of interest. Two, TechCrunch writers operate independently and won't have anything to do with CrunchFund, Arrington's new venture project. The journalism community takes issue partly with the blatant violation of ethical standards. But they're also trying to figure out exactly what's going on. We'll come back to that confusion in a second.
What makes this debate matter more than your typical spat over journalistic ethics is what it reveals about TechCrunch's owner, AOL, and its head of content, Arianna Huffington. AOL is in financial trouble, and many think that the company can only survive if it breaks up and sell off the parts to private equity. CEO Tim Armstrong has been trying hard to turn the company around, and as he explained when AOL bought The Huffington Post earlier this year, his strategy banked on AOL becoming a content company, a real journalism outfit. "At this point, it seems that AOL executives would open up a lemonade stand in front of their headquarters if they thought it would help their bottom line," wrote David Carr in his reactionary column on Sunday. "But the idea of a news site that covers every aspect of nascent tech companies sharing a brand name and founder with a venture capital firm financing these same companies seems almost comically over the line."
At first, AOL tried to redraw that line. Tim Armstrong told The Times on Thursday that TechCrunch isn't the same kind of news site as The Huffington Post, whose writers are prohibited from covering companies they've invested in. "TechCrunch is a different property and they have different standards," he said. "We have a traditional understanding of journalism with the exception of TechCrunch, which is different but is transparent about it."
Even TechCrunch's writers couldn't believe their CEO said this. Paul Carr (no relation to David Carr) wrote:
My position is this: the vast majority of TechCrunch writers are justifiably proud to be called journalists. They have unimpeachable ethical standards and they have no financial stake in the companies they cover. The launch of the CrunchFund won’t change that. Tim Armstrong’s preposterous bullshit won’t change that. However, that doesn’t mean nothing changed yesterday. A lot changed yesterday. The ham-fisted way this announcement has been handled means that Mike Arrington--partly through his own fault--is no longer in charge of what appears on this site.
Indeed, Arianna Huffington made it very clear on Friday that Michael Arrington was no longer in charge of TechCrunch. "Michael has stepped down and is no longer on the editorial payroll effective immediately," she told David Carr, who asked if Arrington would still influence the coverage at the blog that he founded, edited, and embodied for six years. "David, honestly, don't be silly. It is very, very clear that they are distinct entities and Michael will have no influence on coverage."
But MG Siegler's late Sunday night post about the end of TechCrunch as we know it does make clear the fact that everybody is still very confused about what's going on:
TechCrunch is on the precipice. As soon as tomorrow, Mike may be thrown out of the company he founded. Or he may not. No one knows. And if he is, he will be replaced by--well, again, no one knows. No one knows much of anything. Certainly no one at TechCrunch. This site is about to change forever and we're in the total fucking dark. I’ve been able to piece together little bits of information here and there, and it's not looking good.
This is not looking good for anybody involved. A notoriously divisive figure to begin with, Arrington has alienated himself not only from the journalism community but also from his writers. As Siegler says, the future of TechCrunch is entirely in question, and he doesn't seem optimistic at all about things working out. However, the most pessimistic outlook of all is that of AOL. Inevitably, TechCrunch and even Arrington seem somewhat victim to AOL's terrible mismanagement of the entire situation. Not only was it unclear to begin with whether AOL supported Arrington's new venture, but it remains unclear if AOL even knows what's going on. Leaving their own employees in the dark and the journalism community enraged, there's no doubt that AOL has stumbled again. And like we've said before, they can't afford many more stumbles.
Update (2:55 p.m.): Michael Arrington has broken his silence on the series of events. In a blog post entitled "Editorial Independence," Arrington confirms that AOL has made "multiple conflicting statements" and says TechCrunch has proposed two possible outcomes:
1. Reaffirmation of the editorial independence promised at the time of acquisition. Given the current circumstances, that means autonomy from Huffington Post, unfettered editorial independence and a blanket right to editorial self determination. To put it simply, TechCrunch would stay with Aol but would be independent of the Huffington Post.
2. Sell TechCrunch back to the original shareholders.