The AOL-TechCrunch Investing Controversy

http://kara.allthingsd.com/20110428/godspeed-on-that-investing-thing-yertle-but-i-still-have-some-questions-for-your-boss-arianna/

by apievangelist • 15 years ago

41 13 15 years ago

kara.allthingsd.com

kylelibra• 15 years ago

Well written and articulated argument. How is Arrington's investing different than a corporation owning a news station and that news station not disclosing that every time they cover something else owned by the corporation? I feel like this happens all the time without much uproar. I'm not saying what Mike is doing is right or wrong, I'm undecided, but I like Kara's take on it.

gregory802• 15 years ago

agreed, not sure why this is comment is getting down voted. Journalists need to disclose such facts. Conflicts of interest are real. For that matter conflicts of interest aren't limited solely to journalism to begin with.

After all, Eric Schmidt had to step down from Apple board when google started to compete in that area out of concerns of conflict of interest. Why does Arrington get a pass?

http://money.cnn.com/2009/08/03/technology/schmidt_google_ap...

kloncks2• 15 years ago

Isn't Arrington disclosing his conflicts of interests, though? AND going out of his way to not report on them?

He was even outed by one of his own as an investor and didn't do anything to stop it.

Where's the problem here?

kloncks2• 15 years ago

Now this is just ludicrous. I say this is one of those old rules of an industry that needs changing.

We have an image of a journalist as this hopeless romantic, broke, and poor guy who's walking around taking care of our first amendment rights.

As far as I'm concerned, as long as this doesn't impact a startup's coverage on TechCrunch - and it seems like it doesn't, and besides it's not like Arrington writes much lately - then I'm perfectly fine with this. It's just like any other investor; why should we deprive Journalists of the right to invest in anything as long as it's transparent?

I'm sure journalists can own stock in companies (and might disclose it). This is no different.

Let's stop with the Arrington/TechCrunch-bashing. Whether you agree with their positions or not, they're not in the wrong here.

SoftwareMaven• 15 years ago

How would you feel if Arrington failed to cover your tech startup (even though you are getting other coverage) and you found out he was heavily invested in your competitor. It isn't likely to be about what he writes as much as about what he doesn't write.

Nobody is suggesting he shouldn't be allowed to invest. The question is how much investing in the companies he is covering will cause problems. The fact that AOL is saying nobody else gets to do it implies they tend to think it will cause problems.

The most interesting twist to this, though, is that there is a lot of potential value from Arrington being directly in the game instead of watching it. But to brush it off and say there is no potential for significant abuse here is naive, IMO.

EDIT: One other thing, we aren't talking about some writer at TechCrunch. We are talking about the guy to drives it. That also colors it significantly, and not in nice hues of rose.

jallmann• 15 years ago

The media makes no pretense about providing fair and unbiased coverage. Especially bloggers. And this is Techcrunch we're talking about. If they omit covering a startup (or give it a bad review) due to staff investments elsewhere, well, that's how it goes. Roll with the punches, there are other ways to get press.

benologist• 15 years ago

You'll never know if it does impact a startup's coverage. Tons of startups email and most get ignored legitimately. When you're competing with w/e investment of Arrington's that provides them all the excuse they need to make sure you don't get a writeup. Either way all you're going to see is no reply.

hornokplease• 15 years ago

This does seem a bit afield for HN, but since it is being discussed here are a few relevant links:

http://www.businessinsider.com/exclusive-qa-arrington-says-t...

Michael Arrington gave an interview to the Business Insider today where he discusses this issue, and also raises the (legitimate) point that conflicts of interest in journalism go beyond monetary investment and touch on personal relationships between journalists and the subjects they choose to write about.

http://www.siliconvalleywatcher.com/mt/archives/2011/04/like...

Veteran tech journalist Tom Foremski spells out the more traditional objection to journalists investing in the industry they cover:

"It's about protecting a trusted relationship between reader and reporter, and equally important, reporter and source."

[EDIT for clarity and grammar]

gyardley• 15 years ago

Mike's absolutely right. Unless you're attached to an old-school news organization, there's no real journalistic standards in tech, and everyone writes favorably about their buddies. Since venture capitalists all read the industry blogs, this favorable coverage can be very, very useful at key points in your startup's life. Personal relationships are also great for getting a more moderate viewpoint out there when you've cocked up and the industry blogs are doing the usual rush to pile-on. (Internally, I referred to this as a 'combo breaker'.)

I was terrible at this game when I first became aware of it - probably because I'm a pretty private guy with only a few close friends. But after seeing others do it well, I'm convinced that it's important. Should I ever run a VC-backed startup again, I will employ a head of marketing who knows how to make nice and buy drinks.

protomyth2• 15 years ago

"Unless you're attached to an old-school news organization"

I would say that even there, prejudice shows. I sometimes think it is worse because they are try to say they are something they are not.

ChuckMcM• 15 years ago

" ... there's no real journalistic standards in tech, "

While I don't disagree, I can be sad at this reality. Journalism fails when it doesn't have standards.

The AOL-TechCrunch Investing Controversy

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