David Carr has done a good job outlining the specifics of the TechCrunch/CrunchFund mess, and raising the spectre of self-serving publicity:
As business reporters, we are often pressed up against the glass, watching as others take risks, make investments and build companies. We are observers, not players. But the froth and money sloshing around has reached a whole other level, and looks enticing no matter what side of the glass you are on.
Michael Arrington kicked a hole in the glass. A former lawyer and investor who founded TechCrunch in 2005, he told his bosses at AOL in April that he was going to continue to edit the site, but resume investing in some of the companies TechCrunch covered.
When criticism followed, he said he would fully disclose any conflicts, and besides, he never saw himself as a journalist anyway, even though he often broke news. AOL swallowed hard and said Mr. Arrington was free to do what he wanted. Thus emboldened, he spent the following months both investing and directing coverage.
TechCrunch is capable of tearing the limbs off a baby company, but it’s been a generally nurturing place for start-ups when Mr. Arrington has skin in the game. On April 1, he invested in Supyo, a video-chat start-up created by Shawn Fanning and Sean Parker, the pair who changed the world with Napster.
Fourteen days later, M G Siegler, one of the TechCrunch’s highly regarded writers, wrote: “The new project is nothing if not interesting. Think Chatroulette done right.” Mr. Arrington’s involvement was duly noted.
On April 4 TechCrunch wrote a generally positive post about Milk, a mobile development lab created by Kevin Rose, one of the co-founders of Digg, the social news site. On April 26, a round of funding closed, which included Mr. Arrington’s investment, and his involvement was disclosed at that time in an article about the funding.
On June 30, Mr. Arrington invested in LikeALittle, a location-based flirtation site for young people. On Aug. 1, they got a favorable product announcement along with a video visit to their office in a home in Palo Alto where an employee talked about what an “awesome” workplace it was..
We know these things because Mr. Arrington was mostly transparent about the conflicts. But how many articles about equally interesting competitors did not get written?
All sorts of arguments can be made pro and con about the general and specific issues — Arrington is a good guy/bad guy, discloses all/conceals a great deal, everyone does it/no one should be able to do that — but something tectonic is being overlooked.
The subtext of this brouhaha is the incipient linelessness of new media. Arrington pushed the line, or jumped over the line, or erased the line. What line? Are there any lines left? Can there be lines?
I personally subscribe to the notion that potential conflicts of interest should be exposed, but I don’t believe that ends favoritism. My disclosure that company X is a client in a story about compnay X doesn’t mean that over the course of a given year I will not have written more about client X than non-client Y. It’s only natural that I would know more about a company that is a client, and less about companies that I am not in touch with.
And how would such an ‘imbalance’ of coverage be tracked? All press releases aren’t objectively the same, and obviously some judgment has to be made, but they can’t even all be read: there are too many.
Even at a old school bastion of journalism like the NY Times, editors and authors have to pick what stories to follow, out of the infinity of potential stories in the universe. There is no infallible, objective mechanism to pick stories, one that is fair and unbiased in some truly general and provable sense.
The reality is that all organizations (and individuals) have to settle for extreme approximations of what a hypothetically unbiased approach to news coverage would produce, if such a thing actually existed.
Arrington’s heresy in all this is the simple fact of owning stock in the companies that he and others at Techcrunch are covering. This was old news years ago, when Mike was a small entrepreneurial blogger, and even later as the head of a go-go tech blogging company. But now that AOL has purchased TechCrunch, and then invests in CrunchFund, old school media takes another look and cries foul.
So, it comes down to this: Are there still lines that constrain ‘journalists’ from taking sides in the marketplace? Obviously, the NY Times has a rulebook that they require their employees to follow, as do many other organizations, that spells out their position: thou shalt not invest in companies in the industry you cover. The Times created that rule book in a time before blogs, social media, and the mess we live in today.
Mike has no such rulebook. And he says he’s not a journalist, either. He’s something new, living outside the lines. In fact, his existence suggests there are no lines. When anyone can write and reach millions without being anointed by an old school, ‘there are lines’ sort of organization like the NY Times, then there are no longer any lines. Someone like Arrington is, in this lineless universe, just a chameleon who used the trappings and style of publishing to achieve economic influence on the tech start-up market, and then has cashed out on that, exploiting a power vacuum. It’s an identity conflict, with his detractors saying he must act like a journalist, and Mike saying, ‘no thanks’.
But it wasn’t journalists that created Arrington, but the tech scene: a tight-knit, self-absorbed community of investors, entrepreneurs, and wannabes, all desperate for ink, share-of-mind, and a chance for the brass ring. So many hanging on every word printed in TechCrunch, trying to get written up, hoping for a leg up in the steeplechase that is the central animating goal of the tech scene.
Maybe the deep libertarianism of the West Coast tech scene is a factor here, also. The ideology that the elite should be allowed to do whatever, and that there is no need for regulation or lines.
One last thought: It’s strange to recall that Arrington was the guy to break the news in 2010 about Angelgate, a meeting of various angel investors who were engaged in cartel-like behavior, if the stories are to be believed. This was a case where he thought lines had been crossed, possibly into outright criminal behavior.
But in the current TechCrunchgate, the lines aren’t about illegality: this is a story about identities, and the communities that create them. An identity conflict, a culture conflict, and one that might end with a truly Shakespearean close, like Titus Andronicus, with nearly all the dramatis personae lying in a heap on the stage.
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