AOL Close to Buying TechCrunch

http://gigaom.com/2010/09/27/aol-close-to-buying-techcrunch/

by afrombie • 16 years ago

188 78 16 years ago

lotusleaf19872• 16 years ago

Will they just integrate it with Engadget or how will that work out? Keep both separate but competing? Like the way Kellogg's has their divisions competing against each other like Rice Crispies vs. Mini-Wheats?

gfunk911• 16 years ago

They're profoundly different blogs, don't think they're candidates for a merge at all.

lotusleaf19872• 16 years ago

Crunchgear is basically the same as Engadget. And yes I agree they differ, but they have a fair amount of overlap.

melvinram2• 16 years ago

Congrats to MA & crew if it's true. Regardless of whether people care for his style of writing or what TechCrunch has become (I don't mind most of it), it warms me up to see people who bust their asses get rewarded handsomely (assuming the payoff will be good.)

I just hope AOL won't kill it by injecting content from random Seed.com writers, similar to the way Demand Media turned eHow and LiveStrong into content beds. Sure the quality of TC isn't as great as it was in it's early days but it could a whole lot worse.

aaronbrethorst5• 16 years ago

IMO, the quality of MG Siegler's writing is barely a step up from content farms.

pavs2• 16 years ago

You are being too kind.

omouse• 16 years ago

Yeah, it's amazing that anyone pays attention to TechCrunch :|

davidu3• 16 years ago

Aaron --

MG is one of the few TC writers who editorializes pretty liberally in his posts. I appreciate that as it makes it more interesting and it doesn't bother me as I happen to agree with most of what he says. To editorialize successfully requires you to have a strong grasp of the industry, the market forces and what direction it's moving in -- all of which I think he does quite well, along the likes of MA or Om Malik.

You may not like his writing but it's a far cry from a content farm. He's a writer. He's paid to write. That's what he does.

I have no idea why you have so many upvotes, and I guess I'm really surprised so many people agree with you.

inmygarage• 16 years ago

MG is one of the very few tech writers with both intellect, style, and sass, and it's this type of writing that differentiates TC from some tech-content-wasteland. He has a voice and a following, though maybe that following doesn't reside here on HN.

Saying that MG's writing is barely a step-up from content farms is like saying The Wire is barely a step-up from Cops.

zacharycohn• 16 years ago

(I would hope that) AOL should know enough to identify what makes something like TechCrunch successful. If they start filling it with shammy writing and mediocre content, it will lose its audience and die.

[edit- grammar]

prawn• 16 years ago

And possibly create a great opportunity for someone new to emerge and fill that vacant space left by the 'old' TechCrunch?

patio11• 16 years ago

Just an observation: Techcrunch for page rank with high-end electronics reviews bolted on would give your neighborhood SEO enough money to buy his soul back, twice. Try convincing an external MBA that that is off the table.

aberkowitz• 16 years ago

They did okay with engadget and the rest of Weblogs, Inc.

GavinB• 16 years ago

I guess this is the one story on which Arrington doesn't mind getting scooped.

swombat2• 16 years ago

Going out on a very frail limb here, but it seems to me that MA wants to build a (small, but "his") empire, not just make money. In that context it makes no sense for him to sell TechCrunch. That said, stranger things have happened...

melvinram2• 16 years ago

Every business is for sale at the right price :)

swombat2• 16 years ago

Dubious. I imagine you could give Steve Jobs $100 trillion and he still wouldn't sell Apple. What would he do with his life? Buy Apple back?

jonpaul• 16 years ago

I don't know about that... consider Facebook's billion+ dollar offers. Zuckerberg has turned them down. He's stated many of times that's he not in it for the money. Once you reach a certain level of money, e.g. 10 million or so, much more won't be as life changing.

So I disagree. Not all businesses are for sale at the 'right' price. What are other's thoughts?

webwright• 16 years ago

He's said before that he's fairly tired (it was a bit of a tempest in a teakettle when he said this... right around the time he moved north).

http://www.businessinsider.com/techcrunch-editor-arrington-h...

""It has been five years, and I can tell you, I am ready," he said."

staunch2• 16 years ago

"I moved my primary residence from Silicon Valley to Seattle"

Hmm, that's very specific wording there. In my world, filled with tax advisors and lawyers, this translates to "I'm trying to avoid paying California state income tax on capital gains I will accrue in the near future."

-- master's prediction http://news.ycombinator.net/item?id=1314487

ojbyrne2• 16 years ago

Which should give it some urgency as WA has a state income tax on the ballot this fall.

qq66• 16 years ago

Wouldn't he have to be living in WA for a year for that to take effect?

riffer• 16 years ago

State income taxes are generally pro-rated on the number of days in the calendar year.

The only place I've really seen the one year clock is just as something universities made up to keep their tuition price discrimination effective.

macrael2• 16 years ago

Is this guy phishing? Why the link to hn.NET? Is that a sanctioned mirror? Why would I need to login again?

Likely an honest mistake, but what is news.ycombinator.net anyway?

staunch2• 16 years ago

Hah! Weird. No idea how I got a .net link. Fortunately ycombiantor.net is owned by Paul Graham and news.ycombinator.net points to the same IP as news.ycombinator.com

You would need to login again because your cookie was set for .com not .net.

andreyf• 16 years ago

Easy way to tell: try logging in with a bad password.

davidmurphy• 16 years ago

Arrington deserves a lucrative cash-out. He's put so much hard work into TC, and grown it into such a media force.

I'd hope AOL would keep it as a separate unit. But if not, and AOL changes it, it could be an opportunity to, uh, Disrupt Techcrunch as the market leader.

alphadog• 16 years ago

Poor Yahoo! Always shows up late to the party.

zaidf• 16 years ago

Dark, dark day for the Valley :(

hristov• 16 years ago

Who keeps giving AOL money???

dcurtis• 16 years ago

The AOL you knew before November 24th, 2009 is dead.

Don't make the mistake of underestimating the new AOL. It's a profitable media empire that is growing rapidly and knows what it wants. It made $500mm in revenue last quarter.

Here's AOL's 10-Q filing last quarter: http://ir.aol.com/phoenix.zhtml?c=147895&p=irol-SECText&...

It's hard to parse because last quarter ended the first three month stretch AOL has had as an independent company from Time Warner. It contains a ton of information about the IPO and spinoff leading up to November 2009, but if you read carefully, you'll see that AOL made $557mm in revenue last quarter, had $495mm in normal expenses, and made a net profit before tax of $62mm. Sort of. These numbers are dubious because there was a $1.4 billion charge for "unusual expenses," including a write-off from the IPO for disintegration costs and a total write-down for Bebo.com.

The real balance sheet in the 10-Q from last quarter is further obfuscated by a $182mm stock purchase of AOL by Digital Sky Technology, the Russian investment firm that bought a chunk of Facebook a while ago. A few hundred pages are devoted to that and some calculations are skewed.

Together, the things above make it look like AOL as a business is unprofitable, but I don't think that's true.

We won't know how much the company really makes until its next 10-Q filing, but I am inclined to believe the backwards projections suggesting that AOL made profits during the four quarters prior to its IPO of $34.7mm, $1.4mm, $74mm, and $90.7mm.

fortes• 16 years ago

Interesting. Got any details?

johnglasgow• 16 years ago

It sounds like Time Warner moved a lot of write-offs to AOL right before the spin-off to hide their own losses. Then AOL was forced to "take a bath", where you toss out all the huge one time write-offs(i.e. Bebo) in one earnings season and return to good numbers in the next earnings season.

_delirium• 16 years ago

Their long, slow decline in subscribers is really long and slow, and has given them years of cushion to retool--- their legacy subscription revenues last year were about $1.5 billion.

petervandijck• 16 years ago

Best sentence in there: "Perhaps that’s when the announcement is likely to be made." :) Om must be pretty pleased to be able to post this news about a competitor.

jsherry• 16 years ago

Arrington's timing on breaking angelgate was impeccable - likely sweetened, or at least helped seal the deal at the 11th hour.

chrisgoodrich• 16 years ago

As much as like to see deals happen in the Valley, I'm saddened by this news. Not that I find the content of TC that compelling anymore, but I doubt that this will do anything to improve the quality of content.

You can hate all day long on MA, but there is no denying that he has done a lot for the startup community.

I think this signals MA's eventual departure from TC and that, to me, signals the end of TC's dominance in startup news.

duck• 16 years ago

I know this is different, but I still think of Reddit and Condé Nast while reading this.

code_duck• 16 years ago

That sure is an odd fellowship, isn't it?

aresant2• 16 years ago

I get why AOL - the cash, their focus on content, etc.

But the right fit?

Some of the stuff Arrington writes would probably be struck by a sales / publicly traded editing bay yah?

Beyond that I would love to see a list of TechCrunch's most visited articles over the past year.

It might just be the HN bubble but I feel like 2/3 of the non-fluff stuff comes from arrington's deep connections.

And it doesn't just seem like Arrington playing "founder" rolling out the big news, it seems like genuinely developing from his passion for the tech space.

After his extended vacation a few years ago, and the thoughts he expressed on loving / hating / being exhausted w/TechCrunch I can't imagine he's going to stick around.

Examples of other blogs built on a founders passion that made it through an aquistion (EG discluding Weblogs topical gossip rags)?

ig12• 16 years ago

Another issue is embargo breaking which TC does frequently. A lot of companies have the policy that if a news outlet breaks an embargo, than that outlet _and_ it's parent & sister companies are banned from future embargoed releases. So I'd imagine AOL would have to put a stop to that.

wikyd• 16 years ago

That's very far from the truth. If TC was frequently accepting and then breaking embargos, then very quickly their sources of embargos would dry up.

TC very clearly announced to everyone that they no longer were going to accept unsolicited embargos. Their motive was that many of their competitors were breaking embargos by a few hours and then claiming it was accidental. The competitors that were breaking the embargo weren't being reprimanded by the PR firms, etc. at all. There was a clear advantage to breaking the embargo (more traffic, better ranking on news aggregators, etc.) and those who played fairly, like TC, were essentially being punished for it.

ig12• 16 years ago

According to Valleywag, MA turned down a $20 million offer in 2008:

http://valleywag.gawker.com/5024888/aol-wants-to-buy-techcru...

wilschroter• 16 years ago

If not AOL, who would be the most likely (i.e. biggest cash out) for TC?

Zakuzaa2• 16 years ago

My guess: $50 Million

What do you say?

mpat• 16 years ago

What's the best estimate on their revenue?

Zakuzaa2• 16 years ago

$10 million per year (I read it somewhere, not sure)

petenixey2• 16 years ago

I would suspect much higher than that. TC was rumoured to be making over $10m a year even 4 years ago before their conferences and Crunch Gear etc. It's a solid blog network and still growing in influence and mediums (TCTV, Disrupt etc).

Given how much stick MA gave entrepreneurs for not swinging for the fences in the angelgate panel this morning I would guess over $100m.

petenixey2• 16 years ago

Looks like maybe I was wrong

dstein• 16 years ago

Q: How do you know you're in a bubble?

A: When AOL wants to buy your blog.

aresant2• 16 years ago

More interesting tidbits on this:

- "A source close to the negotiations tells us AOL has tried to buy TechCrunch twice in the blog's five year history"

- AOL didn't execute purchase price @ $30m in 2009 because TechCrunch didn't fully own it's conference biz, that it's since seperate from Calacanis.

VIA -

http://www.businessinsider.com/aol-tried-to-buy-techcrunch-t...

jackowayed• 16 years ago

$30M seems like a steal. (Though I'm sure it's gone up since then.)

bl4k• 16 years ago

Ye I would expect at least $60M+ esp for a few reasons:

a) Arrington has proven that the site can still grow even with him stepping back

b) The conference business is now theirs alone and that the value in Techcrunch 50 was Techcrunch, not Calacanis

c) They can convert their readers to conference attendees, party attendees, sponsors or almost anything else - a very large, loyal and well-off reader base.

A few ad and layout tweaks could see their ad revenue rise 30%+. I also don't know why they aren't allowing readers to fire up blogs and take the advertising. I also don't know why they aren't rolling up smaller blogs (like insidefacebook, some of the social gaming blogs etc.) using their stock+cash. With a year of solid work they could double ad revenue and then sell.

betaPass• 16 years ago

what value would AOL get from the aquisition??

ck2• 16 years ago

Hasn't AOL basically destroyed anything they bought?

http://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL

Or at least let dust grow and cover them.

markkat• 16 years ago

Great News for MA, bad news for TC readers. I hope Mike's ego prevents them from making TC go lame.

No doubt he will have a non-compete if he totally cashes out. :(

skbohra123• 16 years ago

Confirmed: http://twitter.com/Sequoia_Capital/status/25800338477

AOL Close to Buying TechCrunch

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