
Why We Sold TechCrunch To AOL, And Where We Go From Here - ssclafani
http://techcrunch.com/2010/09/28/why-we-sold-techcrunch-to-aol-and-where-we-go-from-here/
======
pavs
Since this is Arrington you have to take things with a grain of salt.

The technical reason seems like a very bogus reason. Its true that the TC
design could use some help and the general site layout and speed could use
some improvement. But any half-decent developer and a designer who is worth
his balls could solve this problem. After all they are running on wordpress
using PHP. In regards to the speed of the site, its no so much of a technical
problem as it is a "widget problem" they have more external JavaScript widgets
pulling in than the site itself. The only solution to that problem is a reduce
the number of external calls.

The other reason he used was that he is tired. I can understand that, it is
very much possible to get tired of something that you have been very involved
with for several years, even if the project is the love of your life. It can
be both mentally and physically taxing. But he is not going anywhere... he is
staying with TC even after the sale. What responsibility is he offloading
other than the technical aspect of the site? And it isn't much offloading
because its not like he is sitting behind the computer and developing the
site, he would be hiring someone to that job.

The only thing that he doesn't mention and doesn't talk about (anyone else in
his position would have done the same), is money. It is possible that AOL
offered something that was too good _for him_ to refuse or he really needed
the money. Everything else he mentioned sounds like a bunch of hogwash to me.

~~~
bad_user
> _The technical reason seems like a very bogus reason_

That reason isn't a technical one. As an administrator of your small company
you have to hire people that are good enough and keep them happy.

All small companies have this problem. Programmers don't want to work for
small wages, feel unappreciated, work on uninteresting problems forever, or be
second-class citizens. Those that do and are half-decent, would rather prefer
the job security of a big company.

Another reason would be the stress of any small business to be profitable. Not
only that, but you've started the business partly to get rich.

If what he's saying is true, and AOL can't interfere with their writing, and
it's in the contract, and he also earn a handsome sum of money, then I can see
why they agreed.

~~~
shadowsun7
To be honest, both the TC blog and Crunchbase aren't that complicated to do.
Arrington could theoretically hire contract programmers to do upgrades to the
software if and when they need them.

Perhaps what Arrington means is that it's really hard to find programmers
willing to work on these two products for the long term. It is a blog and a
database, after all, and the nature of the software doesn't make for terribly
exciting work.

~~~
enjo
It's never as easy as "hire some contract programmers to [insert thing here]."
Management is a pain in the ass. Finding talented contractors is hard. Finding
one's whole be available past that one feature you need is harder. Finding
folks who will deliver when they say they will is even harder than that.

Making sure that the 3 guys working together are actually working ltogether is
tough. Then you deal with schedules, deployments, personality conflicts, and
the whole thing.

Managing things is a profession unto itself. My guess is Arrington doesn't
like doing it.

~~~
randallsquared
_Finding one's whole be available past that one feature you need is harder._

It took me a while to parse this as "Finding ones who'll be available after
finishing that one feature you need is harder." :)

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mycroftiv
Arrington's post says all the right things, but it does not contain the word
"money". It's not a dirty or shameful word, and a discussion of a sale of a
company that makes no reference to it is obviously incomplete.

~~~
tapp
"Tim asked me how things were going at TechCrunch. I told him I was exhausted
after five years but that a recent move to Seattle made it easier to balance
my life."

Translation: Dear California FTB, my move had absolutely nothing to do with
tax avoidance on a cash windfall and I really am a Washington resident. I had
NO idea we were being acquired when I made the move 4 months ago... I'm as
surprised as you are. Seriously. For reals.

Teasing aside, Mike's built an impressive media business from scratch over the
last 5 years. It's been fun to watch, and I'm sincerely happy for him. If
you're reading, Mike - congratulations!

~~~
jackowayed
Could CA do anything to him even if he came right out and said, "I moved so I
could avoid California taxes"? There's nothing illegal about that.

~~~
bbatsell
Yes. They would re-classify him as a permanent California resident with a
temporary residence in WA, which would make him subject to CA franchise tax.
Not paying his taxes would then be illegal.

~~~
count
But if he's no longer living in California, and has a WA address, drivers
license, etc. then how can California do anything?

~~~
jseliger
_then how can California do anything?_

There are probably rules about how long you need to be there to establish
residency. And the franchise tax board is notoriously nasty. I remember
reading an article about how they go after athletes who play games in CA
(read: all of them). So if you're a basketball player and you play the Lakers,
if you earn $200,000 that night, CA wants $20,000, even if that's the only
thing you've done in the state.

~~~
jtbigwoo
This is true everywhere, not just in California. All forty-one states with a
personal income tax have laws on the books to collect taxes from non-residents
who work in their state. If you're affiliated with a pro team (including
players, coaches, trainers, etc.), you can expect to file your taxes about a
dozen states (plus Canada.) If you're a musician or other entertainer (circus
clown, for example) on a huge tour, you could conceivably file 41 state
returns plus a few for other countries.

~~~
protomyth
Technically, MN and ND have a reciprocity agreement where residents of one
state that work in the other can pay tax in the state they are residents of
and not the state they are earning money from. It is generally there because
of the Grand Forks / East Grand Forks and Fargo / Moorhead areas crossing
states.

------
philfreo
Best comment:

"Congratulations, Mike! Now stick to your roots and leak the price! :-)"

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petervandijck
He mentions their "endless tech problems". Never noticed that.

~~~
markbao
They're on WordPress VIP. I don't know why they would have endless tech
problems seeing that they're hosted on the largest WordPress system.

EDIT: Yes, I know that WordPress VIP does go down, but that's WordPress.com's
problem, not TechCrunch's.

~~~
justin
TC downtime on Wordpress VIP: [http://techcrunch.com/2010/06/10/wordpress-
gives-us-the-vip-...](http://techcrunch.com/2010/06/10/wordpress-gives-us-the-
vip-treatment-goes-down-on-us-again/)

------
jtbigwoo
> _Tim told me that he doesn’t want whatever makes TechCrunch special to go
> away. He also said it was important that we feel free to criticize AOL when
> we think they deserve it. And the agreement we signed with AOL fully
> reflects this._

I can't figure out how this agreement could actually be enforced. If AOL shuts
down a story on TC, what's going to happen? It's not like TC/AOL is going to
sue corporate/AOL for breach of contract. There are almost certainly
performance and tenure based incentives in the buyout to push Arrington and
other higher-ups at TC to be a good soldiers. (They might choose not to be
good soldiers, but their only option at that point is to quit.) The editorial
freedom of TC is entirely dependent on the honor of upper management at AOL.

~~~
protomyth
Look at the history of some of Paramount's divisions (book vs film/tv). I
remember there was some threats of lawsuits there.

------
gfodor
The reason TechCrunch is TechCrunch is because they are TechCrunch, not AOL.
Now everything they write is going to (legitimately) be put under the
microscope to find a pro-AOL slant.

Arrington got his FU money and so what does he care at this point. I'd be
surprised if you don't see the startups AOL is courting get positive spin on
TC, and the startups AOL loses to in acquisitions to suddenly drop from the
headlines. I wouldn't blame them, as the pressure is going to be absolutely
huge on them to shift their reporting as AOL is in negotiations with startups.

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k33n
Yeah, I'm sure the CEO of AOL just mentioned that he wanted to acquire
TechCrunch out of the blue and that Arrington had no idea.

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Kaizyn
If this means we don't have to see any more TechCrunch headlines on Hacker
News, then I'm all for it.

~~~
zackattack
Aw, give him this one.

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there
does arrington get an @aol.com address now?

~~~
fleaflicker
They were all recently changed to @teamaol.com from @corp.aol.com

------
chrisgoodrich
I don't care what MA says, it's a sad day for getting the controversial
embargo-breaking news that TC is known for.

------
Nate75Sanders
Anybody have thoughts on what will happen to CrunchBase? Will the terms of use
stay the same?

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yayitswei
I like the comment about halfway down:

A $25M – $40MM sale, doesn’t this make techcrunch a “dip shit company”?

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paramendra
I think instead of TechCrunch now losing its character, Arrington will take
TechCrunch to new heights. This "merger" makes sense to me.
<http://goo.gl/fb/GAxZ5>

~~~
JoachimSchipper
This isn't Twitter - you can write out your comment, or at least your URLs.

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bosch
The whole post was FAIL due to the fact he never once mentioned price - even
though he's dying to do that about every other deal in the tech scene!

Do as I say, not as I do Mike?

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kingkawn
AOL?

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chailatte
"Internet Innovation Is Like The Auto Industry In The 1950s — Big, Stagnant
Companies Rule", an article posted on Techcrunch earlier this week, is
indicative of why Arrington sold. He is sitting at the forefront of the
consumer internet space, and as such, sees the death of startups in that
space. I am sure he got tired of putting out press releases for big companies.

At an age when the giants (facebook, google, amazon, zynga) can quickly react
to your new startup and assemble a team and build your website features in a
few month, all the while retaining distribution power, what chances do
startups have against them?

------
vl
Most of the spam I get comes from AOL addresses, I actually think about
blocking the entire domain altogether. I'm sure same competent engineers will
help TechCrunch shine.

