
AOL Close to Buying TechCrunch - afrombie
http://gigaom.com/2010/09/27/aol-close-to-buying-techcrunch/
======
staunch
_"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>

~~~
macrael
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?

~~~
staunch
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.

~~~
macrael
Cheers, thanks for following up.

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melvinram
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.

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

~~~
davidu
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.

~~~
aaronbrethorst
David - I feel he has a weak grasp on many fundamentals of modern
technology[1]. His grammar and spelling are the subject of widespread
mockery[2].

I must respectfully disagree with your conclusion that he has a strong grasp
of the industry, market forces, or direction. I have a good deal of respect
for both Arrington and Malik, and I cannot say I have one iota of the same for
Siegler.

He is a writer, and he is paid to write. But the same can be said for the
people producing articles for Demand Media. MG's prolific rate of content
production doesn't inform its level of quality.

[1] A trivial example is this article:
[http://techcrunch.com/2009/11/17/twitter-just-ui-puked-on-
my...](http://techcrunch.com/2009/11/17/twitter-just-ui-puked-on-my-timeline/)
where MG fails to differentiate between Twitter's CSS files failing to load
and new features. I could find more if you'd like, but this is one of the more
egregious from recent memory.

[2] [http://plankhead.com/blog/1146/mg-siegler-destroys-the-
engli...](http://plankhead.com/blog/1146/mg-siegler-destroys-the-english-
language-–-episode-2)

~~~
davidu
In regards to the poor grammar -- I've no doubt they prioritize posting speed
in exchange for a more liberal writing style policy.

In regards to his grasp of tech -- I see nothing offensive about your example.
He says it's probably a bug, and it was. I think his ability to grasp the
implications of tech is pretty solid.

Apparently we disagree, and perhaps I even hold the contrarian viewpoint in
this community. At least you can cite your criticisms which is more than I
expected. :-)

~~~
wensing
His ability to grasp tech is missing the instinct that sees those numbers (re:
the Twitter UI "bug") and _immediately_ thinks "Oh, duh, ordered-list tag is
showing numbers when it shouldn't be. CSS file error. Happens a lot when I use
Facebook and static files don't get loaded properly. Not worth writing about."

Not saying that means he shouldn't write, but as a webdev it's easy to see
what's wrong with that article.

------
chrisgoodrich
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.

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

A: When AOL wants to buy your blog.

------
hristov
Who keeps giving AOL money???

~~~
dcurtis
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&...](http://ir.aol.com/phoenix.zhtml?c=147895&p=irol-
SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTAtMTc2MDk1L3htbA%3d%3d)

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
Interesting. Got any details?

------
aresant
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...](http://www.businessinsider.com/aol-tried-to-buy-techcrunch-
twice-before-2010-9)

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

~~~
bl4k
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.

------
davidmurphy
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.

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

------
swombat
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...

~~~
melvinram
Every business is for sale at the right price :)

~~~
swombat
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?

~~~
aaronbrethorst
Why does a price have to be monetary in nature? I'm sure that, were it
entirely up to Steve, there is something that would make him sell Apple.

~~~
borism
sure, if you gave him second life he might consider it.

~~~
parfe
Puts that new liver in context.

------
aresant
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)?

~~~
ig1
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
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.

------
ig1
According to Valleywag, MA turned down a $20 million offer in 2008:

[http://valleywag.gawker.com/5024888/aol-wants-to-buy-
techcru...](http://valleywag.gawker.com/5024888/aol-wants-to-buy-techcrunch-
at-a-70-percent-discount-to-arringtons-nine+figure-price-tag)

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

------
alphadog
Poor Yahoo! Always shows up late to the party.

------
zaidf
Dark, dark day for the Valley :(

------
petervandijck
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.

------
markkat
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. :(

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

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

------
ck2
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.

------
skbohra123
Confirmed: <http://twitter.com/Sequoia_Capital/status/25800338477>

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

------
Zakuzaa
My guess: $50 Million

What do you say?

~~~
petenixey
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.

~~~
petenixey
Looks like maybe I was wrong

------
betaPass
what value would AOL get from the aquisition??

------
lotusleaf1987
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
They're profoundly different blogs, don't think they're candidates for a merge
at all.

~~~
lotusleaf1987
Crunchgear is basically the same as Engadget. And yes I agree they differ, but
they have a fair amount of overlap.

~~~
carbocation
I agree with both of you. To borrow your analogy, they're like Rice Crispies
and Mini-Wheats. Depending on your point of view, they're the same (wheat
products consumed for breakfast with milk) or different (a frosted cereal in
big chunks, versus a puffed rice kernel that snaps and crackles).

