Update: According to Business Insider, Arrington is no longer employed by AOL. This changes the stance of this article a little, but there still remains a conflict of interest with or without a job for the publication. AOL, which owns Techcrunch, has invested $10 million into Arrington’s CrunchFund. That along with Arrington’s statement about “friends” (see below) means that he believes he will have more influence with his friends at Techcrunch than if he were even writing for them.
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Tech Journalists and venture capital investors are two different people. Just as food critics should not invest in restaurants and continue reviewing others, tech journalists should not continue to write if they choose to enter the investing arena.
Michael Arrington, founder and editor at Techcrunch, is the self-proclaimed exception, allowing him to have his cake and eat it too in launching a venture fund.
“I don’t claim to be a journalist,” Arrington conveniently said. “I hold myself to higher standards of transparency and disclosure.”
The not-a-journalist loophole doesn’t fly for me. It’s a conflict of interests. There’s no other way around it. More ludicrous, however, is this next statement.
“Friendships and marriage are far more potent than financial conflicts,” he said. This statement, in response to the conflict of interest question, is either a lie or an asinine perception. To claim that journalists are more swayed in their coverage based upon friendships or marriages is simply not true. Journalists do not report on their friends very often, nor do their spouses enter their beat on a regular basis. Even when they do, it’s normally handled by having them recuse themselves from covering certain news or events.
In this case, the very DNA of Techcrunch is centered around startups. Investors and fans of technology startups rely on Techcrunch to deliver unbiased, unmotivated stories that paint a true picture of what a company is doing and what effects their actions will have on their future.
How can any other story covering a story have any credibility? Arrington claims that he’ll disclose his interests in every company they invest into and that stories about those companies will be clearly marked. What about the competitors? What about the companies that are currently not on the investment list but that may end up there some day?
This is worse than a food critic buying a restaurant. This is a referee coaching a sports team. There must be trust that the statements made in a site as powerful as Techcrunch are free of bias and clear of any financial motivations. We look to Techcrunch for news and opinions. Both are officially tainted, now.
For AOL, who bought Techcrunch last year, the conflict of interest is even deeper. They are trying to hold their vast network to a level of journalistic integrity that is critical for their profitability. They’ve struggled with this, even after buying Ariana Huffington and her post. Now, that struggle gets harder. The entire network is compromised by the actions of one man.
I have a certain level of admiration for Arrington. He’s never shied away from the spotlight and he’s always tried (in his own way) to illuminate the truth. This move doesn’t actually do anything to that opinion, but it does do something with my use of Techcrunch.
Said more clearly, this does something for my discontinued use of Techcrunch. It’s just an advertising beacon to me now.