
Tim Armstrong: We Got TechCrunch - ssclafani
http://techcrunch.com/2010/09/28/tim-armstrong-we-got-techcrunch/
======
aresant
Wonder who's going to scoop the TechCrunch buy out price, since that's usually
TechCrunch's job.

~~~
alain94040
There clearly is some kind of earn-out, meaning that the founders get the
whole money only if they stay long enough and/or if the business remains
healthy. On stage, Mike Arrington mentioned that he'd stay for sure on board
for 3 years, due to "incentives." So it's possible that the sale price is $25M
upfront, with another $25M in 3 years. That would make both sources (one that
says the price was only $25M, and one that says it was in the $40 or $50M)
correct.

~~~
pmjoyce
Would a sale in that region make Techcrunch a "dipshit company" in Arrington's
parlance?

[http://www.avc.com/a_vc/2010/07/lead-investors-dipshit-
compa...](http://www.avc.com/a_vc/2010/07/lead-investors-dipshit-companies-
and-funding-every-entrepreneur.html)

~~~
adammichaelc
It wasn't Arrington who said that. He was quoting VC's who had said that.

 _There’s a worry among venture capitalists, [Arrington] said, that angels are
training “an entire generation of entrepreneurs who are building dipshit
companies” that sell to Google for $25 million. In fact, that criticism might
be extended to Y Combinator as well, which could be seen as “the king of the
dipshit companies.”

Arrington said he isn’t on-board with all of that criticism, but that it holds
a “kernel of truth.”_

[http://venturebeat.com/2010/07/29/angelconf-ron-conway-
micha...](http://venturebeat.com/2010/07/29/angelconf-ron-conway-michael-
arrington/)

~~~
pmjoyce
Point taken; he was quoting an unnamed VC who said that and he believes
there's a kernel of truth in it. He's also been characterised as supporting
that point of view; on stage yesterday Chris Sacca straight out placed "his"
words feet and he didn't take the opportunity to refute it:

 _MA: No one is talking about the entrepreneurs._

 _CS: That’s not true. You call some smaller companies “dipshit” companies,
but they’re not._

[http://techcrunch.com/2010/09/27/the-panel-thats-
definitely-...](http://techcrunch.com/2010/09/27/the-panel-thats-definitely-
maybe-not-about-angelgate/)

Another quote from VentureBeat: _"TechCrunch Editor Michael Arrington, who
moderated the panel, had previously criticized some angels for funding
“dipshit companies” that think too small and aim to be acquired by Google for
around $20 million"_

[http://venturebeat.com/2010/09/27/angel-investors-defend-
sma...](http://venturebeat.com/2010/09/27/angel-investors-defend-small-
valuations-and-dipshit-companies/)

------
kevinholesh
Though I disagree with Arrington quite often, congratulations on the
acquisition. He worked his ass off to build TechCrunch to where it is today.

------
bond
So we were right to suspect the move to Seattle was tax based...

~~~
vgurgov
am I the only one who thinks that IF its really the case, its kinda ...
unfair. cmn, MA is good writer and he 100% deserves his money but he made it
writing about SV! I think CA certainly deserve its 10,3% back, hey?

~~~
sdp
I don't think SV is SV _because_ it's in CA. I think SV is SV _despite_ being
in CA.

~~~
_delirium
People have been arguing about it forever, but I think there's at least a
relationship. The UC and Cal State systems have been feeders to many tech
companies, and during the Valley's formative period, even the private
universities were heavily state-subsidized (California used to have an
extremely generous CalGrants scholarship that would pay for any CA high-school
student with good grades to go to _any_ CA university, public or private).

------
vaksel
it's kinda funny....Techcrunch makes it a point that they don't accept press
releases...and they announce their acquisition with a press release.

~~~
djacobs
He doesn't even mark up the press release with semantics. Not even header tags
for subheadings. What is this?

~~~
lachyg
I call it a 'rushed post'.

------
kloncks
Best comment from TechCrunch:

"Shouldn't Techcrunch be acquiring AOL?"

~~~
pedalpete
You probably don't realize how many AOL sites you interact with regularly.
They don't do a lot of 'hey this is an AOL site', so I suspect just like TC,
you won't be aware of any major changes.

------
kloncks
This is epic. For all the crap we give AOL, they really did a nice job with
the Weblogs acquisition. A lot of those blogs are still around and the leaders
in the field.

I wonder a) what's happening to the amazing conferences b) and where Mike's
future will be like.

~~~
InfinityX0
Huge props to AOL for showing that a massive company CAN pivot and use their
brand equity/buying power to maintain a successful business.

Myspace, take notes.

~~~
jrwoodruff
Gannett, take notes. Or continue dying.

------
iamdave
I've always kind of disliked Arrington, thought he came off as a douche on a
lot of occasions.

And yet, I'll give the man props. He started a business, hustled his arse off
and made a big sale. Haters gonna hate, but good job.

------
hop
I wonder if TC was owned 100% by Arrington. That would be a big check in the
mail. Hope the rest of the writers there get some dough.

~~~
joshfinnie
I have heard that Arrington is the majority owner (by a large scale). I think
the CEO and a third person own a small share. I will look for the source I am
remembering...

------
edw519
"You've Got Capital Gains"

~~~
melvinram
That's called a good problem to have :)

~~~
pierrefar
I'm of the opinion that people who say something is a good problem to have are
people who have never had that problem.

~~~
loewenskind
I don't think you understand what the phrase means if you think that. Having
the "problem" of dealing with capital gains means you made money that is
capital gains taxable. The alternative is to not make that money. Get it?

~~~
pierrefar
Oh I understand it perfectly and I think you misunderstood me.

Whether you say "scaling is a good problem to have" or "paying CGT is a good
problem to have", it just means you never experienced how hard it really is to
scale, and how hard it is to deal with taxes/accountants/lawyers and lose
money. They're still problems and when you're in the thick of them, they're
not good.

~~~
loewenskind
Of course they are. If you have scaling problems that means you have a ton of
users. A hard problem but I'd rather have it than not have it. Same with
capital gains tax. I'd rather make enough that I have to pay attention to this
stuff then not ever have to think about it because I've never been financially
successful enough for it to matter (and with taxes you're not "losing money",
you're paying for the services that helped you get there. Of course that's not
as clearly the case in the US tax system but that's the idea anyway).

If everything were effortless then anyone could do it.

~~~
pierrefar
I think we're both looking at the same coin from different sides and
disagreeing. As I understand my and your argument, we're arguing cup is half
empty vs half full. My "half empty" argument is centred on the how stressful
it is for people to go through these "good problems".

~~~
loewenskind
Possibly. Your messages read like "it would be better to not have that problem
at all than to have it". I'm trying to say "it would be better to have it
because you've succeeded than to not have because you haven't. Of course (and
I haven't focused on this part or even mentioned it because I assumed it
obvious), it would be _best_ to have the success and no problems".

------
thought_alarm
Send your comments to arrington1970@aol.com

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AlexMuir
That post is such a canned press release it's untrue. [insert name] CEO,
commented: blah blah natural complement... Blah excited ... Blah great future
together.

~~~
henrikschroder
"Tim Armstrong and his team have an exciting vision for the future of AOL as a
global leader in creating and delivering world-class content to consumers"

...and they also had a big wheelbarrow of cash.

------
bond
Video of the deal: [http://techcrunch.com/2010/09/28/the-aol-techcrunch-
disrupt-...](http://techcrunch.com/2010/09/28/the-aol-techcrunch-disrupt-
tcdisrup-videos-tctv/)

------
bretthellman
Anyone know for how much $$$ ?

~~~
gojomo
I hope he got a Bebo-like valuation... and can then buy it back for cents on
the dollar 2 years later.

~~~
zipzap
I would love to see this. As much as they say the site will be independent,
it's hard to believe AOL won't ask for a few favors every now and then.

------
robryan
It's interesting that with AOL trying to assemble a collection of new media
websites/blogs they probably would have been better off spinning off another
company that doesn't have such a bad reputation in media.

------
markkat
This bums me out. A TC that can't call AOL a pile of dung isn't TC to me. I
really enjoyed TC, and have a lot of respect for Michael Arrington. I don't
blame him at all for cashing in. But this will decrease the quality of TC.

~~~
josefresco
AOL owning Engadget and Autoblog, two blogs I visit daily, hasn't affected the
quality one bit.

~~~
kalid
But gadgets and cars aren't areas AOL is heavily involved in, as far as I
know.

How would reporting of something like AOL's search privacy leak
(<http://techcrunch.com/2006/08/07/aol-this-was-a-screw-up/>) go?

------
templaedhel
I am worried about the long term of this deal as well. Can techcrunch post AOL
leaks anymore (Not that AOL really has leaks anymore)? Will the upper echalon
corporation politics effect the writings? Will the Disrupt and TC50 events
still happen? I would assume they would, who knows. I am also curious about
the crunchpad/jojo lawsuits going on. Will the added aol resources help? Not
effect it? Hopefully techcrunch stays roughly the same, or I will need a new
main news source.

------
Mystalic
Congrats to the TechCrunch team.

------
olalonde
I couldn't help myself from laughing when I noticed AOL's first post was one
of those press releases that Michael Arrington despises.

------
jiganti
Interesting follow-up to the talk of companies being acquired yesterday at
disrupt. Arrington was surprised that Conway et al seemed to not have a
problem with companies who were content with being acquired at less than
billion dollar valuations and dramatic "change the world" dreams.

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carlos
will Mike move out from Seattle now?

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ck2
The only problem is AOL has driven every acquisition into the ground:

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

But still, congrats to the TechCrunch bunch.

~~~
mikeryan
Weblogs Inc seems to be doing okay, not sure if this would be much different.

~~~
thereticent
I agree. The major difference between Weblogs Inc/TC and many of the other
acquisitions is that they serve audience-relevant content (to use Armstrong's
words). It makes sense that AOL would focus more on high-quality content than
on vehicles for content delivery in light of the Weblogs Inc success.

------
erickhill
So, content-based sites _can_ make money after all. TC apparently made decent
profits off of their events business, and the site was basically a large
marketing spend.

Arrington's legendary workaholism paid off nicely.

------
danielnicollet
I was at Netscape 8 years ago when AOL spent $4.2B on it so that TC deal seems
like peanuts and AOL might be on the up and up but it sure isn't as grand as
it once was! AOL and Web were never friends.

------
maguay
So who's going to be the next TechCrunch now that they've been bought out? For
that matter, seems like this leaves GigaOm as one of the largest independent
blogs right now...

------
aonic
[http://corp.aol.com/2010/09/28/aol-to-acquire-techcrunch-
net...](http://corp.aol.com/2010/09/28/aol-to-acquire-techcrunch-network-of-
sites/)

------
jim_dot
I wonder how many more Armstrongs can show up on HN's front page? Maybe get
something about Hellcat Records on here and we can have two Tim Armstrongs!

------
samratjp
Let's hope Arrington will continue to be loud even after the acquisition and
not have to worry about pissing off some advertiser with AOL or something.

------
aberkowitz
Did AOL acquire the rights to the CrunchPad as well? It was never clear
whether it was completely spun off as a separate entity.

~~~
chc
IIRC, TechCrunch didn't even acquire the rights to the CrunchPad.

~~~
aberkowitz
To clarify: I am leading to whether or not AOL would represent the interests
of Michael Arrington's Crunchpad v. joojoo d/b/a Fusion Garage Pte Ltd in
their current legal battle.

------
benologist
Coming soon ... more ads, less journalizm!

------
alphadog
But I thought Yahoo! were making content plays . . . .

Perhaps they only make moves for blue collar content?

------
DevX101
Anyone have any thoughts on the impact of leaks on accelerating/killing deals?

------
rishi
Not sure what to think. I really like TechCrunch and hope it stays awesome.

------
alttab
The title says "We Got TechCrunch" like a general coming back from battle.

------
NHQ
We interrupt this disrupt to join AOL's "audience-relavent" department.

------
jlees
I just hope AOL starts paying all TC writers the ridiculously low monkey
writer rate that it pays Weblogs writers. Ooh, and TC posts now get entered
into the digg voting ring too!

------
paolomaffei
Will they now stop with gossip or do even more?

------
steve19
Techcrunch is dead. Long live Techcrunch.

------
duck
Did anyone see this coming?

~~~
bond
The acquisition? Yes.

From AOL? No.

------
omouse
I hope the hack writers get fired...

------
wiks
I wonder what Mike Arrington will be doing after this? 1) Go for pilgrimage 2)
Run for public office 3) Start another tech blog 4) open a law firm

------
michaelhalligan
This seems like a good fit, certainly an equivalent quality of editorial
content.

------
jw84
Consensus amongst my hacker community: sellout. But we all drunk some haterade
this morning.

~~~
pedalpete
Is that a consensus of one?

From a business perspective, this is a successful exit, though I seem to
recall $100m valuation about a year ago.

From a hacker perspective, I don't really think much about TC. They aren't a
technology company, though they've done a really nice job with open data on
the crunchbase.

~~~
jw84
Cute.

The consensus is of six successful and pretty popular serial
entrepreneurs/hackers and five of my high up tech hacks contacts that's been
reading TechCrunch even before '05, when Arrington published on his first
site.

The hackers thought he was a startup hero but this is a sellout move to give
it up like this. The hacks think the flacks must be effing elated. Now the
process to get their bullshit published is streamlined when there's
shareholders to account for.

~~~
jrockway
What's great about selling out is that he doesn't have to care that you think
he's selling out. He has a hundred million dollars now...

~~~
jw84
You don't need money to not care. That's a childish notion.

------
bearwithclaws
I'm absolutely certain I will be downvoted for this, but I'm really saddened
about this deal. Well...

Congratulation to the TechCrunch team; my condolences to TechCrunch.

<http://37signals.com/svn/posts/2565-acquisition-condolences>

~~~
josefresco
What a troll. And no I don't mean you bearwithclaws I mean 37 Signals. Cherry
picking two failed acquisitions to support your knee-jerk reaction to this
deal is just lazy. I don't think I need to point out that AOL has done just
this before (bought popular blogs) with great success. The shot at AOL's 'age'
is just icing on this lame attempt at getting some free press cake.

~~~
jimboyoungblood
Not a "knee-jerk reaction"- the 37s post was written two weeks ago..

