Thursday, December 01, 2011

TechCrunch - Business & Controversy

In the web parlance, ‘TechCrunch’ is (was? Read full story ahead to know more) the Google for anyone associated with technology startup companies.
Ok, but what do they actually do? As per the company’s website “TechCrunch is a leading technology media property, dedicated to obsessively profiling startups, reviewing new internet products, and breaking tech news.” So, basically it is a one-stop shop (or rather café) where fellow and wannabe entrepreneurs can meet, share and learn, while the investors can track and follow worthy business ideas. As of today, the company’s website, including its network sites, boasts of about 37 million page views per month, and regularly reaches out to more than 12 million subscribers. TechCrunch also hosts the popular startup event – Disrupt Series; and The Crunchies Award.
Forty-one year old Mr. Michael Arrington is the brain behind ‘TechCrunch’, which he founded on June 11, 2005. Michael, a Stanford Law graduate, practiced as a corporate and securities lawyer with a couple of law firms, followed by trying his hands on web-based startups, before hitting it big with what essentially what was his personal blog. Honest views, opinions and an ability to break news first became some of the success mantras for the blog. Michael was able to grow the spread by hiring the right kind of people, and allied services such as virtual and real meeting places for entrepreneurs. Soon TechCrunch grew to a stature that investors started relying on the site for taking investment decisions. In May 2008, the Time Magazine named Michael as one of the world’s 100 most influential people.  
Michael became the poster boy of success for the blogger community. He was famous for his straight from the heart comments. One of his famous quotes and inspiration for the startup guys was at his speech at the 2010 UC Berkeley Distinguished Innovator Lecture Series, where he told the students that - “the best thing in the world is to go to Harvard for a year and drop out. Everyone knows you were smart enough to get in.” And he proved it when he managed to sell TechCrunch to AOL for a handsome USD 30 million, in around September 2010.
However, there aren’t happy endings to all fairy tale stories.  Post sale to AOL, differences were reported in the editorial style and process followed by Michael till now, and the way AOL wanted to run the show. Meanwhile Michael announced his plans of starting a venture capital fund to invest in web startups, named “CrunchFund”, to which AOL agreed to invest in USD 10 million. This was taken skeptically by the media who hinted at a possible collusion whereby Michael and his TechCrunch team would propagate only such companies, in which CrunchFund has or would be investing.  Even people close to Michael, like contributing author Paul Carr strongly condemned the venture capital business idea, stating that it would hurt TechCrunch’s editorial credibility. The NY Times in its story (dated September 4, 2011) summed it up as – “If insiders can trade on the news they publish, readers may become an adjunct to a business that is less about public information than private gain. 
AOL, which some say was anyways waiting to take some action against Michael, did not let go off this opportunity. According to last news on the issue, it is evident that Michael was shown the doors by AOL management. He is now managing the fund and has also started a new blog – ‘Uncrunched’ & the millions of ardent followers are waiting to read him again, afresh!  

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