The TechCrunch / Arrington saga is the perfect illustration for the stealthy corruption plaguing digital information. Skip this paragraph if you know the story. In a nutshell: on September 1st, Michael Arrington, founder of the site TechCrunch, announced the launch of a venture fund (Fortune broke the story). Rather small token by Silicon Valley standards: $20 million (to put things in perspective, according to the National Venture Capital Association, 37 funds raised a total of $2.7 billion in Q2 2011, which gives an average of $72 million per fund). No big deal, except Arrington is also TechCrunch’s editor and he intends to continue writing about startups — startups his venture would fund. (To make things even weirder, one of the main contributors to the fund is AOL, TechCrunch’s owner since last year).
Even the most twisted ethicist would have detected a looming conflict of interest. Not Arrington. Because he is one of most arrogant pricks in this business. And because he lives elsewhere. He resides in the blogosphere, where the simplest ethical issues are distorted like space-time at the edge of the universe.
Back on Earth, a controversy erupted. The loudest shot was fired by Kara Swisher, the co-executive editor (along with Walter Mossberg) of All Things Digital, the Wall Street Journal Digital Technology site.
I can’t help but sharing with you the first graf of her 6:00am (Pacific) outburst:
Of course I have something to say about the news yesterday that AOL would be a key investor in a new early-stage venture fund being started by TechCrunch’s perpetually petulant editor Michael Arrington — with a big, fat and decidedly greasy assist from a panoply of Silicon Valley’s most powerful VC firms and angel investors.
As Alfred Hitchcock said, it starts with an earthquake and it’s getting worse. Then, she summed up :
In fact, the creation of a $20 million investment kitty that Arrington has dubbed CrunchFund is simply the formalization of a long-standing arrangement that has already been going on since he founded his popular tech blog.
Eventually, after a public, web-enhanced, dispute with his owner, Michael Arrington was fired. (On the matter, New York Times’ media columnist David Carr wrote the best piece, as usual, well-crafted and documented).
Now, here is why I find this subject interesting. Three things: the revolving door between journalism and industry; the blogosphere distortion field; the pervasive conflict of interest.
The switch. For one, I have nothing against switching from journalism to another kind of activity. In that respect, I disagree with most of my fellow journalists – especially those in France who like to believe journalism is an apostolate (both come with a vow of poverty.) Last week, I met a former London-based business reporter, who is now back in France; he is being offered a top communication job in a Fortune 500 company. He feared being marked with the seal of infamy and no longer allowed to come back as a journalist. I told him things have changed; after five years or so as a communication guy for a large conglomerate, a business news organization would be even more interested in hiring him because he would know his sector pretty well, and would be able to detect all the manipulation tricks of big corporate PR machines, which could be invaluable to his junior co-workers.
As for someone writing about startups, I find it perfectly understandable the desire to cross the Rubicon and to join or create a venture fund. Trying to detect what could be a great product or even the Next Big Thing, nurturing great teams of engineers, designers or marketers, is an enthralling occupation, which, in addition, is both intellectually stimulating and financially rewarding.
Unfortunately, Arrington doesn’t see things that way. He got drunk in a kind of power game, intoxicated with his supposed “make or break” power over startups. (By the way, I always found the alleged power of tech writers over the fate of a startup to be vastly overstated; unlike in the analog era, the disintermediated world allows every product to find its path to success – as long as it deserves one.) Anyway: I do find the revolving door is a good thing. As long as the previous door has been properly locked.
Enter the blogosphere and its tolerance for conflicts of interest and — let’s use the word – soft corruption.
Ten years ago, Arrington’s case would have been a no-brainer. Neither for him or his employer. He would have simply been let go. Now, it seems to trigger a quarrel between Ancient and Modern, the former being – obviously – representatives of the old medias, the likes of the Swishers and the (David) Carrs and the latter being the tech blogosphere and is elastic value-system. Fine.
I’m not going to denigrate the blogosphere as a whole or TechCrunch itself, which harbors good reporters. Blogs are part of my daily media routine and, for the record, I’ll say many bloggers do a better job than presumed professional writers. Still, by construction, bloggers are more prone to serve third party agendas: many are penniless, young, untrained, unsupervised and their writing is unedited. A target of choice for manipulation.
A couple of years ago, I witness firsthand the blogosphere’s vulnerability. I was called by a non-profit organization to take a look at their digital strategy (I can’t be too specific, I’m still under NDA). The whole things was in the hands of a couple of communication agencies, which had detected a gold mine, loading the project with outrageously overpriced services. I pissed them off quite a bit by donning a bean-counter’s suit — which I found, in that case, enjoyable – and by suggesting many budget cuts. (When done, I quickly moved away from that fishy mission).
One of the promotional tools proposed by the flacks, was dubbed as “The Blogger Army”. In short, a few hundred bloggers worldwide, presented as “influencers” that would convey pre-packaged messages concocted by the communication agencies. The bloggers didn’t have to care about the product or its underlying value, they just had to cut and paste the material they were provided with. All of the above for a $100,000 budget paid to a firm specialized in deploying the “army” — including a couple of well-know “influencers”.
That very same year, as I dug a bit further, I realized how many bloggers are deluged with gifts from the tech industry and how, to that crowd, the notion of flashing a Visa card to pay for gadgetry was seen as utterly ridiculous…
In the information business, the conflict of interest is looming at every corner. All the time, someone is trying to buy you with something. It could be a product, “exclusive” access, the transcript of legal depositions, a heads-up to a report. Everything. The more vulnerable (or hungry, or ambitious) a writer is, the better target he’ll be for the corrupters. Years ago, as I was writing about Hollywood, a writer from The Los Angeles Times explained how an interview with an agent or a movie producer often ended up with a cajoling “… And what about you my friend, you must have a script buried somewhere, hmmm? Let’s discuss it someday…”
That’s why, when it comes to get an credible review of a tech product or service, I’ll trust Walt Mossberg’s Personal Technology column much more than any blogger. Mossberg is a seasoned professional (he’s 63) who had developed his craft well before the tech boom. He actually sharpened his claws covering the brutal automobile industry, as recounted is this 2004 Wired profile. Mossberg lives by his reputation of independence, that’s why the Wall Street Journal (and AllThingsD) consider him as an important asset – and pays him accordingly. I took him as an example because I’ve been reading his column since he started it in 1991 (I was then living in New York).
His 1000 words ethics statement is an example of what should be the standard in journalism. Many news organizations, newspapers, magazines, websites, have adopted similar codes. Are they foolproof? No, certainly not. But it is worth considering having one.
- Soft Brakes on the Prius TweetOnce upon a time, I took my Wehrmacht staff car to the Palo Alto service shop. As I mentioned a barely perceptible change in the feel of velvety autobox when it shifted gears, Ernesto, the all-knowing, all-seeing tech nodded: ‘Yes, we need to load a new revision of the software in your automatic transmission…’ When [...]...