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

Madhav tripathi

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?

Carl

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.

nintendolegend

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.

pb1994

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.

Bob

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.

Mark

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.

yesohyes

oh no.

anything AOL puts their brand on my body automatically rejects.

just like AT&T.

Patrick

I’ll personally pay Arrington a couple million more to disappear for the next 10 years.

caroline

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.

Arpit Shah

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.

Anonymous coward

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?

Om Malik

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.

Kris Tuttle

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.

Ian Betteridge

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.

Ric

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!

cliveb

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.

Om Malik

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.

Eddie Gear

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.

ashish

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.

Anonymous

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.

Dan

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

netcool

Super, finally someone to put an end to this ” Arrongaton” menia
wonder how long will he survive in AOL?

JEnn

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

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