AOL (s aol), the New York-based online media company, is on the verge of acquiring TechCrunch, the online blogging network started by former attorney, Michael Arrington. The deal is at a sensitive stage and might fall apart yet, but I don’t think so. Sources familiar with both entities says that the announcement is likely to come onstage at Disrupt, TechCrunch’s flagship conference currently underway in San Francisco.
AOL CEO Tim Armstrong is likely to make an appearance at the conference, and perhaps that’s when the announcement is likely to be made. Michael Arrington was unreachable for comment, and AOL has not returned my calls. I still don’t know the terms of the deal, and will update the post accordingly.
AOL in the past had acquired Weblogs Inc., the blogging company behind popular sites such as Engadget. Those blogs have helped AOL compensate for steep loss of traffic. The service has been in the market to buy a technology blog, and is rumored to have been linked with other technology blogs.
On a more personal note, I think this is great news for Mike and his crew. I remember Mike starting out by writing long reviews of web startups in 2005. We often talked about the world of technology and discussed where it was all headed. In the years that have passed, he turned his blog into a company and brought in Heather Harde to run his operation. The company has launched series of events, with TechCrunch SF being the latest. I want to congratulate Mike and his crew on their success.
Related research from GigaOM Pro (subscription req’d):
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- Multiple Models for Social Media Businesses
Photo of Michael Arrington by Joi Ito via Flickr under Creative Commons.
Wow! Why was Yahoo not in the race to acquire TechCrunch?
Not even Yahoo wants ’em.
If true, this will be the death of TC
Why do you say that?
Engadget has been doing great under AOL for the past 5 years.
Because AOL has the reverse Midas Touch.
I would think because being bought by AOL is about as timely as being bought by the East India Company. I hope Arrington gets a lot of cash for his retirement (or next startup), but being owned by AOL puts a neon sign reading “Owned by obsolete old fogies” on the place.
Seriously… this sounds like Mike is taking a cash payment to ride off into the sunset, safe in the knowledge AOL won’t have a clue on how to manage the TC brand.
The only way this makes sense to me is if TC wanted to reach a more mainstream audience. Unfortunately that would’ve worked a lot better back when AOL was still part of Time Warner. So I’m not sure where AOL is planning to go with this. Granted, their strength is the portfolio of online content they own (http://corp.aol.com/products-services/content), but is there a synergy there I’m missing? Is AOL going to bring a bigger audience to the table? … better advertising revenue? I suppose it’s possible.
It just seems an odd union. It’s not like AOL is at the center of the tech universe. Headquarters on the “other” coast, dwindling email and subscriber offerings, etc.
He probably think that Michael Arrington will leave TC.
It will be the death of TC because Mike won’t want to work for AOL. Without him TC is nothing.
Why would you say that? AOL owns a lot of great web properties that haven’t died off, most notably the old Weblogs Inc network (Engadget, Joystiq, Autoblog, TUAW, etc)
I agree.
I agree as well.
@Om – From my subjective view, I don’t like being a part of sites/blogs that are owned by large media conglomerates. I don’t even like reading those sites generally because you never really know if the stories are biased or have some arterial motive. Yes, you could argue that is the case with any site, but my take is that happens a lot more on the large AOL/Yahoo!/etc. owned sites. People want to part of a community/blog/etc. that isn’t a part of some large corporate Walmart style empire. They want something that is unique…their own.
I agree with you, @Andrew
Good point and I am betting AOL will try and keep that intact. Or at least one hopes they would.
Arterial motive. What are you trying to say there? 😉
i too agree…alos it wil create confusion which site to choose…be it crunchgear or engadget,mobilecrunch or engadget mobile…
Good deal for Mike A. Good news for Heather Harde, too… now she has a career path. Saul Hansell should make guest appearances on TechCrunch TV… he could be like the Tosh.0 guy.
Ok, ok – turning the live stream back on! 😉 Wow.
Well, I guess interruption was good for a few minutes!
Oh this is great! Everything that AOL touches turns to gold! Oh wait, they fail at business…
Wow! Congrats to Arrington and team. Hope it’s a huge sum… There’s no denying TechCrunch is a huge media force. This is a very smart move for AOL.
Trying to find out the price 😀
I hope it won’t be an “undisclosed” amount… We really want to know the price 😀
If it happens, I am going to miss the “Arrington touch” in TechCrunch. Good luck with them.
Don’t you think he’d stay on and continue to develop content and cull stories for them? He’s such a huge force there that I’d be surprised if the deal didn’t involve him staying on for at least some predetermined amount of time.
Possible. But I doubt he can continue his fierce independent streak with AOL looking over his shoulder.
A really good move for AOL. If they play this right post-acquisition, they have a slight chance of losing the non-savvy/uncool image.
This puts MG’s post on TC into new light: Internet Innovation Is Like The Auto Industry In The 1950s — Big, Stagnant Companies Rule
How much?
We should have those details soon.
Techcrunch is making about $10 million/year, according to Inc. magazine.
How much AOL would pay? 10x the revenue? 5x? Sometime ago (2 years, i think) it said Techcrunch is valued at about $100 million…
I’d say something like 30-40M$
“Techcrunch is making about $10 million/year, according to Inc. magazine.”
I’m assuming you meant that they’re pulling in $10 million a year in revenue, not making $10 million a year in profit.
Wish they’d still have the pricing on their ads like in the past.
I also asume there’s plenty of placed content (specially by Apple, anybody read MG Siegler will suspect this)
According to compete they have about 2,300,000 uniques a month, but compete always underestimates, so they probably have an average of 3,000,000.
To round up, say their avg CPM is about $25 x 2,300 = that’s about $57,000 for just one ad
They have well over 10 ads, plus lots of links and content placed by Sillicon Valley’s creme de la creme. Let’s say they make good $700k, maybe even a $1,000,000 per month.
Multiply by 5 years, that’s close to $100mil considering the Michael Arrington brand who’s been quoted in every news outlet worldwide.
I guess I was aiming too high, they’re reporting mere $25mil.
First feeling: don’t know if it’s good or bad for the Web2.0 scene. Wait to see what’s happening!
PS: OM, when it’s your turn?
What, no leaked emails? That would have been ironic. Great scoop!
HUGE MISTAKE, only AOL is capable of.
I haven’t paid much attention to AOL since they started shifting away from being a walled garden company. Is this purchase a good thing or a bad thing?
Clearly this is @arrington’s move to get a whack of cash and then become a SUPERANGEL. He’ll even be able to hang out at Bin 38.
I have a tendency to trust independent news rather than corporations. If AOL buy TechCrunch, I suspect I may stop reading it.
I think so too.
Me too.
TC will loose the charm it has now and will become just yet another mainstream Tech blog.
Given Arrington’s coverage of companies that he’s an investor in, on the board of, or an advisor to, I think that’s a little naive.
Worth reading this if you haven’t:
http://valleywag.gawker.com/tech/techcrunch/disclosure-scrubbed-at-techcrunch-210794.php
Do you think the Angelgate reporting from Arrington, was linked to the fact that he was talking with AOL? It was pretty bold of him to be burning some bridges.
My conspiracy theory Arrington style 🙂
Gosh I sure hope not. That will surely mean the end of TechCrunch!
http://www.web-privacy.it.tc
Isn’t being bought by AOL just shy of the Kiss of Death?
what! no more angelgate traffic?
Well, I guess goodbye TechCrunch, I hardly knew ye…
well at least it will finally be over, i needed just one little reason to never care about techcrunch again
I hear you. I won’t hear them. LMAOL
Aolnews.com has a backlink to engadget.com with an anchor text “Tech News”. Will it be switched to point to TC if this sale happens? Currently with this search term, Engadget is #4 in Google and TC #9.
It is good for mike, but i wonder whether TechCrunch will be the same after losing its independence
To have Engadget, TUAW, and TC all under one network? I don’t know, I feel like there’s some duplication and cross-over there.
Can’t help but be sad to see a change to my daily reader linked to AOL 🙁
I don’t like it!
Great Mike. Sorry for the writers like MG, Alexis, etc……. This will be a major blow to the new AOL employees.
I think we should all speculate on price – my guess will be $35 to $40 mil. TC’s a premier web property but not a massively profitable cash-cow. Its viewership has steadily grown in the last few years, but not the number of interested sponsors. The conferences (now 2x per year) have come to represent what the ‘business’ of TC is all about. How else could the site support such a sizeable full-time staff for a blog. Congrats Mike if this is true/happens. The timing certainly makes sense – might as well bag the revenue of TC SF before handing over the reins.
I’m giving away a $25 iTunes gift card to whoever is the closest at guessing how much TechCrunch sells for, tweet me your guess – @kevinfleming
This looks like a template for almost every acquisition TechCrunch has written a speculation post–formula post is formulated:
1. Name potential Acquirer of company.
2. Claim deal is at sensitive stage
3. Provide remotely possible peripheral context
4. Suggest no one is talking
5. Profit
Super, finally someone to put an end to this ” Arrongaton” menia
wonder how long will he survive in AOL?
With any luck (fingers crossed) this will end the ‘we only write about start-up’s our friends own, we have stake in our that sign massive advertising deals at ridiculous prices’ era of TC..
Most biased, unreliable and worst run site online since 2005
Agreed. Its like ‘club’ – you’re in or out..
Knowing both parties personally, this doesn’t surprise me. The new management in the Consumer Applications group headed up by Brad G is pretty chummy with Mike. Moreover, AOL has a pretty big budget put aside for acquisitions (even more for a “home run company”).
I predict the sum to be pretty substantial, but the inner-workings of the deal (including things like “phantom equity” – which is a term that has been thrown around quite often @ AOL when talking to possible acquisitions) will be even more attractive for individuals like Mike.
Not sure how I feel about this really, but it doesn’t seem too outlandish to me.
Thanks. That is a great comment.
Majority of TC’s revenue still come from events – the online part is where AOL is interested (tech traffic). So TC as a brand will probably lose its sheen.
The largest blog in the world and my inspiration TechCrunch is being acquired. I was hoping more at TechCrunch expanding by acquiring other companies. Hmmm… this is news to me.
TC is worthless
TC-AOL deal makes sense.
Startup Weekend has events across the globe. TechCrunch focus on covering Web 2.0 sector start-ups needs to expand its coverage.
As always M&A risks integrating company cultures requires thoughtful management to create value.
I think the AOL team is pretty keen on the whole idea of events and perhaps that is why it makes sense for them to acquire TC> I guess help build an events business around the TC brand.
AOL needs to do something. TC would certainly help on the traffic side. I agree that if it is a cash out kind of thing for Mike then TC is dead. BUT maybe AOL is ready to admit they need to do something different and Mike is going to end up with a big role, budget, and room to get something done. Now that would be interesting. Otherwise it’s just online boy makes good which is still great news for everyone working hard to figure it out online.
I kinda like your description of the future. It might be what attracted Mike to AOL after all.
Kris, aol.com has a Alexa traffic rank in the US of 15. TechCrunch? 123. Given that I doubt aol.com is selling out its ad inventory at present, I don’t think adding TechCrunch to the mix is about gaining additional traffic.
What TechCrunch does have is a demographic that’s almost exactly the inverse of aol.com: while aol.com is predominantly aged 45+, TechCrunch is mostly 25-34. TechCrunch’s audience is high on graduates, low on no/some college – again, the inverse of aol.com.
In other words, if you look at TechCrunch as a niche site that appeals to a specific demographic that AOL doesn’t serve well in terms of audience, it starts to make sense. It fits in well in terms of being an additional offering to advertisers as part of the overall AOL portfolio.
But would it be $100 million-worth of eyeballs? I doubt it – unless AOL believes it could grow traffic a lot, and sell ads much more effectively than TechCrunch is currently doing. If TechCrunch was doing $20m revenue, I’d say $100m was a good deal for AOL. If it’s $10m revenue – and I’ve heard less, a lot less – than $100m would be a sucker’s money.
This assessment is partially right, yes they want to gather the demographic, but I think they want to grow it even more under AOL’s banner for reputation,. The fine line they have to walk remains to be seen and it is one of resources poured into TC and hands off of MA and his process. Thats where I am leery of AOL’s ability to acquire and just step the hell back!
If I recall correctly… GigaOm was *this* close to being acquired / merged within AOL during Jon Miller’s reign, shortly after their Weblogs, Inc. acquisition. (Wasn’t it during Late April, 2006?)
What say ye, Om? 🙂 No disclosure needed there?
Ironically at that time, I worked for Time Warner which owned AOL. And if you look at the history of the company, we didn’t get going till three months later.
Awesome news for TechCrunch crew and breaking for me 🙂 AOL really needs to do something innovative in order to compete current market, acquisition is good but not the best solution. Hope to get best out of this deal.
Ah, that explains all the latest “let’s get some links” articles by Arrington lately… 😉
Om, congrats to you and Owen on the scoop! Here’s my post after doing my own reporting at the Techcrunch Disrupt conference: http://scobleizer.com/2010/09/28/techcrunch-disrupted-by-aol-the-end-of-an-era-in-tech-blogging/
Did Rupert Murdoch’s acquisition of the Times group spoil the Times, etc to a significant extent? Has Lebedev’s acquistion of the (London) Evening Standard spoiled the Standard? No, actually Lebedev has a hands off approach to the Standard and it’s going free has dramtically increased its distribution numbers and revenue and it is now “in danger of making less of a loss” according to a senior editorial person on the Standard (heard last week). So this could be good news, not bad, for Tech Crunch too if AOL wants it to be.
Wonder if AOL’s new content management system will replace WordPress or if Mike & co will swear by Matt 🙂
I’ll personally pay Arrington a couple million more to disappear for the next 10 years.
oh no.
anything AOL puts their brand on my body automatically rejects.
just like AT&T.
This will kill TC. AOL doesn’t have the stomach for what MA did to make TC so good. I’ll wait until MA’s non-compete expires, then follow him to wherever he goes.
Perhaps now TechCrunch will have some badly needed adult supervision. Arrington, a failed attorney and the co-creator of the epic fail Crunchpad, is the ultimate tech wanna-be. His grandiose blogs often sound impressive, but are often spectacularly wrong. Perhaps now AOL can bring in some real editors and fact-checkers to straighten out this mess. TechCrunch gives blogging a bad name.
If they do buy TC, I hope they don’t mess with engadget (merge it etc..). Engadgets got a great thing going and their style is very different than TC.
Let it sell.I’ll atleast get a nice TC app for Android like that of engadget, hopefully 🙂
Tim Armstrong: We Got TechCrunch!
http://techcrunch.com/2010/09/28/tim-armstrong-we-got-techcrunch/
I will admit: I am somewhat impressed by AOL, after at one time being mourned, showing some interesting moxie in how it is acquiring and marketing its content in realms like sports journalism and pop media news.
AOL 🙂 I can’t seem to hear that name without the proverbial “You’ve Got Mail” popping up in my head. Values sure have changed in this economy.
Om – simple quick note of congrats on your scoop. Big one.
The stuff has doing a great job most specially Mike. That is a great news. Keep it up…
It will be interesting to see what happens with AOL and techcrunch, AOL desperately needs something to revitalize them.
Well! TechCrunch has its own identity of a bad boy as creating controversies publishing breaking news, after acquisition of TC by AOL everything will be as usual or TC will become a good boy?