Arrington (TechCrunch) and Tim Armstrong (AOL)

Kerfuffle at TechCrunch/AOL Over Arrington’s CrunchFund

Arrington (TechCrunch) and Tim Armstrong (AOL)Last week’s announcement that Michael Arrington, the founder and current co-editor of the infamous TechCrunch blog, would be starting his own startup fund dubbed “CrunchFund” has caused an almighty backlash across the printed and online press. Arrington currently holds a lot of sway in the technology and start-up worlds as a post on TechCrunch can make or break new companies and services, and the worry is that if he becomes an investor in those companies his reporting, and that of the other TechCrunch bloggers will be more influenced by his return on investment than actual positives and negatives of the new company.

It appeared at first that Arrington had the full support of his overlords at AOL, the internet behemoth to which he sold TechCrunch last year, as they were the biggest investors in the new fund. But the established journalists that he so often rightly mocks for being slow to publish a story have been offering less than positive responses – with the general claim being that even if Arrington is upfront about which companies he has invested in, there is still a massive conflict of interest. And they’re right.

Arrington gives other TechCrunch bloggers a lot of freedom and constrains them very little editorial oversight – which is what made TechCrunch stand out from the more traditional technology press and made it the dynamic money-making machine it has become today. But he does still influence a lot of the coverage on the site, with MG Siegler noting in his piece on the situation today when he says Arrington “permeates the entire site”. Or in other words – Arrington’s personal influence holds a lot of sway at TechCrunch, and he in turn will be influenced by money from his investments. Yes it is true that so far his angel investments in AirBNB and others have not meant that he avoided reporting on the bad news as much as the good, but I’m just not sure it will always stay that way – especially if Arrington is having to allay the concerns of other CrunchFund investors.

I don’t know Arrington personally, and those that do seem to think he will be able to step his way through the conflicted interest minefield no problem, but the one thing you can be certain of is that everyone will view TechCrunch articles a little differently. The trust will be eroded away every time Arrington isn’t first to post about a problem in a company he invested in, or talks up a product release that doesn;t quite live up to expectations. These things happen in tech journalism all the time, but TechCruch readers will be viewing it through lenses with a different tint.

Even AOL head honcho Tim Armstrong could see the massive conflicts of interest that would not have even been considered had Arrington not created one of the few profitable parts of AOL’s current empire when he said:

TechCrunch is a different property and they have different standards… we have a traditional understanding of journalism with the exception of TechCrunch.

Except, it isn’t a different kind of property – it is a blog that has a reputation for being straight to the point and avoiding the PR-speak and bullshit that pervade many other similar sites. AOL may only expect money, but readers expect at least the most basic journalistic integrity. Maybe Arrington will be able to avoid the conflicts in his head somehow, but I think that’s almost impossible, and Arianna Huffington seems to agree – with rumours abound that she has already sacked Arrington from his editorial role.

TechCrunch is, and has been over the years, the best resource for breaking news and analysis on start-ups and new tech companies. It was one of the major influences in me starting up TechFruit in an attempt to have a similar focus but on UK companies and issues. Much (in fact most) of that success is down to Arrington who has disrupted the industry to a huge degree, but once he sold TechCrunch to AOL – however much he tried to say otherwise, TechCrunch had become part of the mainstream. This always happens once a new company gets traction and gains influence, and isn’t necessarily a bad thing – but it does stop you being able to claim that you work under different rules.

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