Michael Arrington, founder of TechCrunch, announced that he would go back to investing in companies (and their competitors) that he writes about. It’s all okay, according to Arrington, because he’ll disclose any conflict of interest.
To be clear, every publication for which I’ve ever written forbade investing in any company I wrote about. It’s standard practice everywhere. Or, at least it was until now.
Arrington was an investor before TechCrunch and stopped investing because, as he writes, “In 2009 the accusations of conflicts of interest by our competitors became somewhat distracting.” Arrington’s announcement was retroactive—he’s apparently been actively investing in the companies his publication covers for “several months.” Most observers have passed it off as Arrington being Arrington. “In other words, it’s a kind of there-he-goes-again thing, vaguely icky but hardly surprising and completely genuine,” as Kara Swisher wrote for the Wall Street Journal‘s All Things Digital.
Arrington, of course, pre-dissed Swisher and other detractors as not-to-be-trusted competitors with sour grapes. Swisher is married to a Google vice president. But Arrington and his publication are no longer independent. Arrington sold himself and his publication last September to AOL. That’s right, he was part of the deal.
Just when you thought this couldn’t get any weirder, AOL itself weighs in by saying that its editorial employees cannot make investments, except Arrington. “Arrington operates from a unique position,” AOL said in a statement to Nicholas Carlson writing for Business Insider.
The tech press has always been putrid. As Arrington says in a follow-up interview, “... friendship conflicts are the real issue. And they are. We all have our friendships and the people who have done right by us. And I’ve written about this before, that’s the real issue and there’s not much you can do besides trying to be an educated reader.”
“Vaguely icky” doesn’t begin to cover it, and I can’t wait to see how Arianna Huffington, AOL’s president and editor-in-chief of its Huffington Post Media Group tries to extricate herself from this mess. In February, AOL announced it would acquire the Huffington Post for US$315 million.
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