

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

======
kylelibra
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.

~~~
gregory80
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...](http://money.cnn.com/2009/08/03/technology/schmidt_google_apple_board/)

~~~
kloncks
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?

~~~
gregory80
> He was even outed by one of his own as an investor and didn't do anything to
> stop it.

Journalists who are using full disclosure, shouldn't need to be outed. They
are supposed to be upfront about such things. Outing suggests he was not.

Second, mere disclosure doesn't prevent a conflict of interest.

~~~
protomyth
I am rather curious where you get your news from. Every TV networks and major
newspaper in the country (including PBS) has business interests.

------
kloncks
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
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
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.

------
hornokplease
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...](http://www.businessinsider.com/exclusive-qa-arrington-says-the-
real-conflict-of-interest-in-tech-reporting-has-nothing-to-do-with-
money-2011-4)

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...](http://www.siliconvalleywatcher.com/mt/archives/2011/04/like_it_or_lump.php)

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
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.

~~~
protomyth
"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.

