AOL Close to Buying TechCrunch(gigaom.com)
gigaom.com
AOL Close to Buying TechCrunch
http://gigaom.com/2010/09/27/aol-close-to-buying-techcrunch/
26 comments
Which should give it some urgency as WA has a state income tax on the ballot this fall.
Is this guy phishing? Why the link to hn.NET? Is that a sanctioned mirror? Why would I need to login again?
Likely an honest mistake, but what is news.ycombinator.net anyway?
Likely an honest mistake, but what is news.ycombinator.net anyway?
Easy way to tell: try logging in with a bad password.
Wouldn't he have to be living in WA for a year for that to take effect?
State income taxes are generally pro-rated on the number of days in the calendar year.
The only place I've really seen the one year clock is just as something universities made up to keep their tuition price discrimination effective.
The only place I've really seen the one year clock is just as something universities made up to keep their tuition price discrimination effective.
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Congrats to MA & crew if it's true. Regardless of whether people care for his style of writing or what TechCrunch has become (I don't mind most of it), it warms me up to see people who bust their asses get rewarded handsomely (assuming the payoff will be good.)
I just hope AOL won't kill it by injecting content from random Seed.com writers, similar to the way Demand Media turned eHow and LiveStrong into content beds. Sure the quality of TC isn't as great as it was in it's early days but it could a whole lot worse.
I just hope AOL won't kill it by injecting content from random Seed.com writers, similar to the way Demand Media turned eHow and LiveStrong into content beds. Sure the quality of TC isn't as great as it was in it's early days but it could a whole lot worse.
Just an observation: Techcrunch for page rank with high-end electronics reviews bolted on would give your neighborhood SEO enough money to buy his soul back, twice. Try convincing an external MBA that that is off the table.
IMO, the quality of MG Siegler's writing is barely a step up from content farms.
Aaron --
MG is one of the few TC writers who editorializes pretty liberally in his posts. I appreciate that as it makes it more interesting and it doesn't bother me as I happen to agree with most of what he says. To editorialize successfully requires you to have a strong grasp of the industry, the market forces and what direction it's moving in -- all of which I think he does quite well, along the likes of MA or Om Malik.
You may not like his writing but it's a far cry from a content farm. He's a writer. He's paid to write. That's what he does.
I have no idea why you have so many upvotes, and I guess I'm really surprised so many people agree with you.
MG is one of the few TC writers who editorializes pretty liberally in his posts. I appreciate that as it makes it more interesting and it doesn't bother me as I happen to agree with most of what he says. To editorialize successfully requires you to have a strong grasp of the industry, the market forces and what direction it's moving in -- all of which I think he does quite well, along the likes of MA or Om Malik.
You may not like his writing but it's a far cry from a content farm. He's a writer. He's paid to write. That's what he does.
I have no idea why you have so many upvotes, and I guess I'm really surprised so many people agree with you.
David - I feel he has a weak grasp on many fundamentals of modern technology[1]. His grammar and spelling are the subject of widespread mockery[2].
I must respectfully disagree with your conclusion that he has a strong grasp of the industry, market forces, or direction. I have a good deal of respect for both Arrington and Malik, and I cannot say I have one iota of the same for Siegler.
He is a writer, and he is paid to write. But the same can be said for the people producing articles for Demand Media. MG's prolific rate of content production doesn't inform its level of quality.
[1] A trivial example is this article: http://techcrunch.com/2009/11/17/twitter-just-ui-puked-on-my... where MG fails to differentiate between Twitter's CSS files failing to load and new features. I could find more if you'd like, but this is one of the more egregious from recent memory.
[2] http://plankhead.com/blog/1146/mg-siegler-destroys-the-engli...
I must respectfully disagree with your conclusion that he has a strong grasp of the industry, market forces, or direction. I have a good deal of respect for both Arrington and Malik, and I cannot say I have one iota of the same for Siegler.
He is a writer, and he is paid to write. But the same can be said for the people producing articles for Demand Media. MG's prolific rate of content production doesn't inform its level of quality.
[1] A trivial example is this article: http://techcrunch.com/2009/11/17/twitter-just-ui-puked-on-my... where MG fails to differentiate between Twitter's CSS files failing to load and new features. I could find more if you'd like, but this is one of the more egregious from recent memory.
[2] http://plankhead.com/blog/1146/mg-siegler-destroys-the-engli...
In regards to the poor grammar -- I've no doubt they prioritize posting speed in exchange for a more liberal writing style policy.
In regards to his grasp of tech -- I see nothing offensive about your example. He says it's probably a bug, and it was. I think his ability to grasp the implications of tech is pretty solid.
Apparently we disagree, and perhaps I even hold the contrarian viewpoint in this community. At least you can cite your criticisms which is more than I expected. :-)
In regards to his grasp of tech -- I see nothing offensive about your example. He says it's probably a bug, and it was. I think his ability to grasp the implications of tech is pretty solid.
Apparently we disagree, and perhaps I even hold the contrarian viewpoint in this community. At least you can cite your criticisms which is more than I expected. :-)
His ability to grasp tech is missing the instinct that sees those numbers (re: the Twitter UI "bug") and immediately thinks "Oh, duh, ordered-list tag is showing numbers when it shouldn't be. CSS file error. Happens a lot when I use Facebook and static files don't get loaded properly. Not worth writing about."
Not saying that means he shouldn't write, but as a webdev it's easy to see what's wrong with that article.
Not saying that means he shouldn't write, but as a webdev it's easy to see what's wrong with that article.
Why are you surprised so many people agrees with him? Do you think it might be possible that MG's writing is really bad and a lot of people sees it but you don't?
I'm assuming you mean, is it possible he's right?
Of course it's possible. The surprising number of votes would seem to indicate people agree with him. I don't know how many down-votes he's had though.
Of course it's possible. The surprising number of votes would seem to indicate people agree with him. I don't know how many down-votes he's had though.
You are being too kind.
Yeah, it's amazing that anyone pays attention to TechCrunch :|
MG is one of the very few tech writers with both intellect, style, and sass, and it's this type of writing that differentiates TC from some tech-content-wasteland. He has a voice and a following, though maybe that following doesn't reside here on HN.
Saying that MG's writing is barely a step-up from content farms is like saying The Wire is barely a step-up from Cops.
Saying that MG's writing is barely a step-up from content farms is like saying The Wire is barely a step-up from Cops.
David Simon's work has won Edgars, Peabodys, and more, and has been nominated for Emmys, WGAs and many other awards I'm not able to look up right now. Has MG even won a Webby? I'd love to see MG produce better content. I read TC just like everyone else, and having less but better content would be a huge step forward to my mind.
Edit: a journo friend of mine happened to mention to me that Simon is also the recipient of a MacArthur Genius Award, fwiw.
Edit: a journo friend of mine happened to mention to me that Simon is also the recipient of a MacArthur Genius Award, fwiw.
Also, a better comparison than COPS might be CSI.
'Saying that MG's writing is barely a step-up from content farms is like saying The Wire is barely a step-up from CSI.'
COPS, at least, is real. Well, sort of.
'Saying that MG's writing is barely a step-up from content farms is like saying The Wire is barely a step-up from CSI.'
COPS, at least, is real. Well, sort of.
(I would hope that) AOL should know enough to identify what makes something like TechCrunch successful. If they start filling it with shammy writing and mediocre content, it will lose its audience and die.
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And possibly create a great opportunity for someone new to emerge and fill that vacant space left by the 'old' TechCrunch?
They did okay with engadget and the rest of Weblogs, Inc.
As much as like to see deals happen in the Valley, I'm saddened by this news. Not that I find the content of TC that compelling anymore, but I doubt that this will do anything to improve the quality of content.
You can hate all day long on MA, but there is no denying that he has done a lot for the startup community.
I think this signals MA's eventual departure from TC and that, to me, signals the end of TC's dominance in startup news.
You can hate all day long on MA, but there is no denying that he has done a lot for the startup community.
I think this signals MA's eventual departure from TC and that, to me, signals the end of TC's dominance in startup news.
Q: How do you know you're in a bubble?
A: When AOL wants to buy your blog.
A: When AOL wants to buy your blog.
Who keeps giving AOL money???
The AOL you knew before November 24th, 2009 is dead.
Don't make the mistake of underestimating the new AOL. It's a profitable media empire that is growing rapidly and knows what it wants. It made $500mm in revenue last quarter.
Here's AOL's 10-Q filing last quarter: http://ir.aol.com/phoenix.zhtml?c=147895&p=irol-SECText&...
It's hard to parse because last quarter ended the first three month stretch AOL has had as an independent company from Time Warner. It contains a ton of information about the IPO and spinoff leading up to November 2009, but if you read carefully, you'll see that AOL made $557mm in revenue last quarter, had $495mm in normal expenses, and made a net profit before tax of $62mm. Sort of. These numbers are dubious because there was a $1.4 billion charge for "unusual expenses," including a write-off from the IPO for disintegration costs and a total write-down for Bebo.com.
The real balance sheet in the 10-Q from last quarter is further obfuscated by a $182mm stock purchase of AOL by Digital Sky Technology, the Russian investment firm that bought a chunk of Facebook a while ago. A few hundred pages are devoted to that and some calculations are skewed.
Together, the things above make it look like AOL as a business is unprofitable, but I don't think that's true.
We won't know how much the company really makes until its next 10-Q filing, but I am inclined to believe the backwards projections suggesting that AOL made profits during the four quarters prior to its IPO of $34.7mm, $1.4mm, $74mm, and $90.7mm.
Don't make the mistake of underestimating the new AOL. It's a profitable media empire that is growing rapidly and knows what it wants. It made $500mm in revenue last quarter.
Here's AOL's 10-Q filing last quarter: http://ir.aol.com/phoenix.zhtml?c=147895&p=irol-SECText&...
It's hard to parse because last quarter ended the first three month stretch AOL has had as an independent company from Time Warner. It contains a ton of information about the IPO and spinoff leading up to November 2009, but if you read carefully, you'll see that AOL made $557mm in revenue last quarter, had $495mm in normal expenses, and made a net profit before tax of $62mm. Sort of. These numbers are dubious because there was a $1.4 billion charge for "unusual expenses," including a write-off from the IPO for disintegration costs and a total write-down for Bebo.com.
The real balance sheet in the 10-Q from last quarter is further obfuscated by a $182mm stock purchase of AOL by Digital Sky Technology, the Russian investment firm that bought a chunk of Facebook a while ago. A few hundred pages are devoted to that and some calculations are skewed.
Together, the things above make it look like AOL as a business is unprofitable, but I don't think that's true.
We won't know how much the company really makes until its next 10-Q filing, but I am inclined to believe the backwards projections suggesting that AOL made profits during the four quarters prior to its IPO of $34.7mm, $1.4mm, $74mm, and $90.7mm.
It sounds like Time Warner moved a lot of write-offs to AOL right before the spin-off to hide their own losses. Then AOL was forced to "take a bath", where you toss out all the huge one time write-offs(i.e. Bebo) in one earnings season and return to good numbers in the next earnings season.
Their long, slow decline in subscribers is really long and slow, and has given them years of cushion to retool--- their legacy subscription revenues last year were about $1.5 billion.
More interesting tidbits on this:
- "A source close to the negotiations tells us AOL has tried to buy TechCrunch twice in the blog's five year history"
- AOL didn't execute purchase price @ $30m in 2009 because TechCrunch didn't fully own it's conference biz, that it's since seperate from Calacanis.
VIA -
http://www.businessinsider.com/aol-tried-to-buy-techcrunch-t...
- "A source close to the negotiations tells us AOL has tried to buy TechCrunch twice in the blog's five year history"
- AOL didn't execute purchase price @ $30m in 2009 because TechCrunch didn't fully own it's conference biz, that it's since seperate from Calacanis.
VIA -
http://www.businessinsider.com/aol-tried-to-buy-techcrunch-t...
$30M seems like a steal. (Though I'm sure it's gone up since then.)
Ye I would expect at least $60M+ esp for a few reasons:
a) Arrington has proven that the site can still grow even with him stepping back
b) The conference business is now theirs alone and that the value in Techcrunch 50 was Techcrunch, not Calacanis
c) They can convert their readers to conference attendees, party attendees, sponsors or almost anything else - a very large, loyal and well-off reader base.
A few ad and layout tweaks could see their ad revenue rise 30%+. I also don't know why they aren't allowing readers to fire up blogs and take the advertising. I also don't know why they aren't rolling up smaller blogs (like insidefacebook, some of the social gaming blogs etc.) using their stock+cash. With a year of solid work they could double ad revenue and then sell.
a) Arrington has proven that the site can still grow even with him stepping back
b) The conference business is now theirs alone and that the value in Techcrunch 50 was Techcrunch, not Calacanis
c) They can convert their readers to conference attendees, party attendees, sponsors or almost anything else - a very large, loyal and well-off reader base.
A few ad and layout tweaks could see their ad revenue rise 30%+. I also don't know why they aren't allowing readers to fire up blogs and take the advertising. I also don't know why they aren't rolling up smaller blogs (like insidefacebook, some of the social gaming blogs etc.) using their stock+cash. With a year of solid work they could double ad revenue and then sell.
Arrington deserves a lucrative cash-out. He's put so much hard work into TC, and grown it into such a media force.
I'd hope AOL would keep it as a separate unit. But if not, and AOL changes it, it could be an opportunity to, uh, Disrupt Techcrunch as the market leader.
I'd hope AOL would keep it as a separate unit. But if not, and AOL changes it, it could be an opportunity to, uh, Disrupt Techcrunch as the market leader.
Arrington's timing on breaking angelgate was impeccable - likely sweetened, or at least helped seal the deal at the 11th hour.
Going out on a very frail limb here, but it seems to me that MA wants to build a (small, but "his") empire, not just make money. In that context it makes no sense for him to sell TechCrunch. That said, stranger things have happened...
Every business is for sale at the right price :)
Dubious. I imagine you could give Steve Jobs $100 trillion and he still wouldn't sell Apple. What would he do with his life? Buy Apple back?
Normally I don't do "I agree" comments but given how downvoted the parent comment is (-4 at the time of me writing this), I am going to make an exception.
Disregarding the technicalities (Mr. Jobs owns only a small part of Apple's shares) the parent has a point in that if you're happy with what you're doing, no, if you love what you're doing and have financial stability already so that you don't need to worry about money, ceteris paribus, you might not want to sell your business. It might not make you any happier or your life any more meaningful. Of course, if you feel like doing something new, then it makes sense.
Disregarding the technicalities (Mr. Jobs owns only a small part of Apple's shares) the parent has a point in that if you're happy with what you're doing, no, if you love what you're doing and have financial stability already so that you don't need to worry about money, ceteris paribus, you might not want to sell your business. It might not make you any happier or your life any more meaningful. Of course, if you feel like doing something new, then it makes sense.
He already sold Apple (IPO). And NeXT. And Pixar.
Selling Apple isn't up to (just) Steve Jobs. That's not how public companies work.
True, but completely missing the point of the comment you're responding to.
Not exactly - if we're going to have a counter-example, we should have a valid one (e.g. a privately owned company, since it's self-evident that every public company does have its sale price).
Maybe Facebook a few years back?
Maybe Facebook a few years back?
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Why does a price have to be monetary in nature? I'm sure that, were it entirely up to Steve, there is something that would make him sell Apple.
I used to agree with you, but ever since Jobs' battle to stay alive and still not handing the reins over to someone else and enjoy the rest of his days spending his dough I find myself agreeing with the GP, it is very well possible that Apple is the thing that Jobs enjoys doing the most in the world, and that he really wouldn't give up his role there and his stock in return for any amount of money.
Those that have stood with one leg in the grave are usually pretty aware of the time they spend and how they spend it, I don't see Jobs letting up at all.
Those that have stood with one leg in the grave are usually pretty aware of the time they spend and how they spend it, I don't see Jobs letting up at all.
I'd guess a merger that gave him a chance to bury Microsoft might make him sit up and take notice. HP maybe? Their hardware and channels exclusively running Macos would be a juggernaut.
Steve Jobs has already thrown away large fortunes by simply not exercising options he was granted. He apparently has a lifestyle he's happy with. So more pedantic way to say it is: anyone who isn't doing exactly what they want to be doing and living the level of lifestyle they want to be living has a price.
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I don't know about that... consider Facebook's billion+ dollar offers. Zuckerberg has turned them down. He's stated many of times that's he not in it for the money. Once you reach a certain level of money, e.g. 10 million or so, much more won't be as life changing.
So I disagree. Not all businesses are for sale at the 'right' price. What are other's thoughts?
So I disagree. Not all businesses are for sale at the 'right' price. What are other's thoughts?
Zuckerberg likely didn't sell because he hasn't seen a price high enough. He probably thinks the thing is worth much more than he's ever been offered. "Not in it for the money" is hard to believe given all the slimy privacy issues that are still happening even after his supposed transformation.
He's said before that he's fairly tired (it was a bit of a tempest in a teakettle when he said this... right around the time he moved north).
http://www.businessinsider.com/techcrunch-editor-arrington-h...
""It has been five years, and I can tell you, I am ready," he said."
http://www.businessinsider.com/techcrunch-editor-arrington-h...
""It has been five years, and I can tell you, I am ready," he said."
I get why AOL - the cash, their focus on content, etc.
But the right fit?
Some of the stuff Arrington writes would probably be struck by a sales / publicly traded editing bay yah?
Beyond that I would love to see a list of TechCrunch's most visited articles over the past year.
It might just be the HN bubble but I feel like 2/3 of the non-fluff stuff comes from arrington's deep connections.
And it doesn't just seem like Arrington playing "founder" rolling out the big news, it seems like genuinely developing from his passion for the tech space.
After his extended vacation a few years ago, and the thoughts he expressed on loving / hating / being exhausted w/TechCrunch I can't imagine he's going to stick around.
Examples of other blogs built on a founders passion that made it through an aquistion (EG discluding Weblogs topical gossip rags)?
But the right fit?
Some of the stuff Arrington writes would probably be struck by a sales / publicly traded editing bay yah?
Beyond that I would love to see a list of TechCrunch's most visited articles over the past year.
It might just be the HN bubble but I feel like 2/3 of the non-fluff stuff comes from arrington's deep connections.
And it doesn't just seem like Arrington playing "founder" rolling out the big news, it seems like genuinely developing from his passion for the tech space.
After his extended vacation a few years ago, and the thoughts he expressed on loving / hating / being exhausted w/TechCrunch I can't imagine he's going to stick around.
Examples of other blogs built on a founders passion that made it through an aquistion (EG discluding Weblogs topical gossip rags)?
Another issue is embargo breaking which TC does frequently. A lot of companies have the policy that if a news outlet breaks an embargo, than that outlet _and_ it's parent & sister companies are banned from future embargoed releases. So I'd imagine AOL would have to put a stop to that.
That's very far from the truth. If TC was frequently accepting and then breaking embargos, then very quickly their sources of embargos would dry up.
TC very clearly announced to everyone that they no longer were going to accept unsolicited embargos. Their motive was that many of their competitors were breaking embargos by a few hours and then claiming it was accidental. The competitors that were breaking the embargo weren't being reprimanded by the PR firms, etc. at all. There was a clear advantage to breaking the embargo (more traffic, better ranking on news aggregators, etc.) and those who played fairly, like TC, were essentially being punished for it.
TC very clearly announced to everyone that they no longer were going to accept unsolicited embargos. Their motive was that many of their competitors were breaking embargos by a few hours and then claiming it was accidental. The competitors that were breaking the embargo weren't being reprimanded by the PR firms, etc. at all. There was a clear advantage to breaking the embargo (more traffic, better ranking on news aggregators, etc.) and those who played fairly, like TC, were essentially being punished for it.
According to Valleywag, MA turned down a $20 million offer in 2008:
http://valleywag.gawker.com/5024888/aol-wants-to-buy-techcru...
http://valleywag.gawker.com/5024888/aol-wants-to-buy-techcru...
I guess this is the one story on which Arrington doesn't mind getting scooped.
Poor Yahoo! Always shows up late to the party.
Dark, dark day for the Valley :(
Best sentence in there: "Perhaps that’s when the announcement is likely to be made." :) Om must be pretty pleased to be able to post this news about a competitor.
Great News for MA, bad news for TC readers. I hope Mike's ego prevents them from making TC go lame.
No doubt he will have a non-compete if he totally cashes out. :(
No doubt he will have a non-compete if he totally cashes out. :(
Hasn't AOL basically destroyed anything they bought?
http://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL
Or at least let dust grow and cover them.
http://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL
Or at least let dust grow and cover them.
If not AOL, who would be the most likely (i.e. biggest cash out) for TC?
My guess: $50 Million
What do you say?
What do you say?
I would suspect much higher than that. TC was rumoured to be making over $10m a year even 4 years ago before their conferences and Crunch Gear etc. It's a solid blog network and still growing in influence and mediums (TCTV, Disrupt etc).
Given how much stick MA gave entrepreneurs for not swinging for the fences in the angelgate panel this morning I would guess over $100m.
Given how much stick MA gave entrepreneurs for not swinging for the fences in the angelgate panel this morning I would guess over $100m.
Looks like maybe I was wrong
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what value would AOL get from the aquisition??
Will they just integrate it with Engadget or how will that work out? Keep both separate but competing? Like the way Kellogg's has their divisions competing against each other like Rice Crispies vs. Mini-Wheats?
They're profoundly different blogs, don't think they're candidates for a merge at all.
Crunchgear is basically the same as Engadget. And yes I agree they differ, but they have a fair amount of overlap.
I agree with both of you. To borrow your analogy, they're like Rice Crispies and Mini-Wheats. Depending on your point of view, they're the same (wheat products consumed for breakfast with milk) or different (a frosted cereal in big chunks, versus a puffed rice kernel that snaps and crackles).
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Hmm, that's very specific wording there. In my world, filled with tax advisors and lawyers, this translates to "I'm trying to avoid paying California state income tax on capital gains I will accrue in the near future."
-- master's prediction http://news.ycombinator.net/item?id=1314487