AOL Close to Buying TechCrunch

143 Comments

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):

Photo of Michael Arrington by Joi Ito via Flickr under Creative Commons.

143 Comments

Kevin Fleming

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

sam

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.

eddy

Great Mike. Sorry for the writers like MG, Alexis, etc……. This will be a major blow to the new AOL employees.

mark

It is good for mike, but i wonder whether TechCrunch will be the same after losing its independence

BF

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.

bob

well at least it will finally be over, i needed just one little reason to never care about techcrunch again

Ravi

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 :)

The Dave and Ron Show

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.

MKR

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?

Stephane

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?

Mircea

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…

Eric B

“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.

gubatron

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.

TechClicker

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.

Krish

Possible. But I doubt he can continue his fierce independent streak with AOL looking over his shoulder.

David Murphy

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.

Sam Whitmore

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.

Hal O'Brien

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.

Robert K

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.

Bill

It will be the death of TC because Mike won’t want to work for AOL. Without him TC is nothing.

Michael

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)

Andrew

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.

leemu tami

i too agree…alos it wil create confusion which site to choose…be it crunchgear or engadget,mobilecrunch or engadget mobile…

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