TechCrunch controversies seem to appear, to varying degrees of severity, with the reliability of religious calendar events. And now, here's the latest.
It began to unfurl five days ago with the announcement of the ill-judged CrunchFund, a $20m venture capital fund attached to TechCrunch, the powerful technology news site. Cue controversy about the conflict of interest about writing about startups and then investing in them. Or investing in startups and then writing about them. Can anyone not see a problem with that (even if $20m is, by VC standards, miniscule)?
Photo by Muffet on Flickr. Some rights reserved
TechCrunch, as of September last year, is owned by AOL. From the minute that deal was announced there was speculation over how long 'colourful' TechCrunch founder Mike Arrington - who inspires a unique and intriguing mix of respect, terror and fuckyouness - would last as part of a major corporate, as he is known for an aggressive style and pathological need for power. It's unlikely any acquisition price, even the estimated $25m of this deal, would change Arrington's modus operandi.
After the CrunchFund announcement, Arrington became the subject of a very fair and analytical piece by New York Times reporter David Carr, who rightly observed that "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". TechCrunch, he pointed out, can make or break a startup. To what extent would millions of dollars of investment influence that coverage?
Retaliation after Carr's post was swift and ferocious - quickly, lazily and wrongly characterised as old media jealousy at TechCrunch's success. But Carr tracked down Arianna Huffington - president and editor-in-chief of AOL's content - in Brazil, who told him Arrington had stepped down to become a venture capitalist. "It is very, very clear that they are distinct entities and Michael will have no influence on coverage," Carr was told.
That though was rather at odds with Arrington's characteristic statement earlier that day that: "I am TechCrunch and TechCrunch is me."
Photo by JayT47 on Flickr. Some rights reserved
The situation blew up. AOL confusingly stated that Arrington was no longer paid by AOL, but that he would disclose any conflicts in any editorial, while chief executive Tim Armstrong said TechCrunch has "different standards".
Huffington apeared to be forcing Arrington's resignation and said she'd be recruiting a new editor-in-chief to replace Arrington - but then Arrington then threatened to step down. (Are you taking all this down, Aaron Sorkin?) Yesterday TechCrunch's senior writer MG Siegler wrote that he doesn't know whether Arrington is still employed or not, and said AOL was close to "breaking TechCrunch".
Arrington followed that with a post about editorial independence - thus washing everyone's dirty laundry in public, or being transparent about the 'negotiations' with its owner, depending how you see it. He claimed that AOL's conflicting statements about CrunchFund demonstrate that TechCrunch does not have the editorial independence it was promised at acquisition, and issued an ultimatum:
"We've proposed two options to Aol.
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.
or
2. Sell TechCrunch back to the original shareholders."
What next? It's AOL's move. Or as Wired put it, "both sides are holding each other hostage." It's a two-way classic Mexican standoff - Armstrong, Huffington and Arrington, like the showdown of The Good, The Bad and The Ugly. Which one, though, is Clint Eastwood?
Arrington's take seems to be that readers just have to trust TechCrunch to do the right thing, but is that protection enough? Whatever the editorial commitment, TechCrunch is and has to be run like a business. It's far too simplistic for TechCrunch fans to dismiss any criticism that comes from established news organisations; whatever the market dynamics that drive competition, universally recognised ethics have developed over a very long period of time, and for good reason.
Arrington may simply have to recognise that his desire to return to his investment roots, and his adrenaline-fuelled ego-flattering journalism are not compatible. Nobody enters journalism for the money. No-one said it better than AllThingsD's Kara Swisher, who cut through the bluster with a light sabre and a sizeable side order of vitriol, saying all Arrington needed to do was resign, to wholeheartedly pursue his VC ambition:
"A giant, greedy, Silicon Valley pig pile... Not that any amount of tsk-tsking about it matters, I suppose, as Arrington finally gets his fervent Pinocchio-on-a-star wish to be a real-boy VC, can add yet another tainted buck to the pile of billions his venture pals already have, and just call it another typical day in Silicon Valley."
Oh, Kara, enough sitting on the fence. What do you really think?
Meanwhile, AOL has remained silent about Arrington's ultimatum. Doing nothing, though, does not look like an option: if Arrington remains, Huffington is undermined. If Arrington goes, will he try to take TechCrunch writers with him, and what sort of non-compete clause would they be under?
We've lost count of how many rounds it's been. But the bell is ringing and the fighters are coming back to the middle....
