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.
— frederic.filloux@mondaynote.com
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19 Comments
It seems that the software engineers of Silicon Valley see nothing wrong with Arrington’s conflicted ethics as long as there is disclosure, as if disclosure pardons any sins. The engineers believe that they can “triangulate” and sort the corrupted posts from the clean. It’s BS. Silicon Valley’s startups deserve a lev el playing field when it comes to the key media that covers them. A corrupt media will cause a lot of harm.
Really? Let’s transpose this discussion from the start-up field to the political one. Should a journalist disclose his relationship or allegeance to a party before writing a column? If we follow your logic, a journalist with a political affiliation should never be allowed to publish, as this might result in manipulation of the readers. Or is your problem with money, in Mr Arrington’s case, opposed to power, for political columnists?
When I read an article, I try to get some background on the publication and it’s journalists first. When reading Liberation, or Le Figaro, I know what to expect. When reading the Wall Street Journal or TechCrunch, I am in a similar position.
I have to agree with Marc. It is shady but the media has biases whether for power, money or ego. Arrington is Mr Ego, now he’s adding Mr Money to the mix. Oh, well. I think your article overlies the larger ‘blogger army’ phenomena – that of reviews on sites like Amazon. These reviews influence millions of dollars of product sales. Seems to me this too is softly corrupted. The prose of many product reviews is so nice – are we really to believe that they are trusted reviews from peers? These are are they just more examples of the distortion that is so easy to perpetrate on the web. Reader beware!
Gangaroo.com is trying to solve the latter by allowing you to see reviews from flesh and blood people that you know and trust. I’m involved in this company, and I hope Gangaroo’s vision succeeds.
Here’s a software engineer’s perspective:
The internet, and the web, are constructed precisely so that anyone can say anything about anyone or anything to anyone or everyone.
Other concerns, like sorting out whether someone’s claims have merit, are secondary.
The job of the network is to deliver the bits with as much bandwidth and as little latency as possible, factoring in dropped messages or transmission errors.
Where does most of the responsibility lie for “getting things right”? At the very edges of the network — all the peers being connected. The parties communicating with each other have the responsibility for things like judging the authenticity of stuff they read (“This message says it’s from Alice. Is it really from Alice?”).
It’s an arrangement we’ve made: everybody gets the power to communicate easily with anyone else, with no filters. In exchange, everybody has the responsibility to be a good judge of the information they read, and a reliable source of information to others.
This is very important to many (I can’t speak for all) people in Arrington’s audience.
Disclosure is everything. If a blogger discloses that he got the computer he’s reviewing as a gift, that is all I need to know about that. The information is out there, so it can be judged along with all the rest. The hidden information is the problem. It isn’t available, so it can’t be factored in.
This situation was more clear-cut when TechCrunch was independent. Having AOL buy it muddys the waters. What exactly is Techcrunch after that? When judging their words, such a relationship may be as much a complicating factor as a direct investment by Arrington in a startup.
To suggest that this responsibility to be a good judge of information is more than the connected peers can manage is simply not a place I can go. That goes against the entire set of values I just described.
Sure, I’ll need help in sifting through information. I’ll use tools to automate the things that can be automated. I’ll select sources that I’ve built up some trust in, and filter out sources that I’ve lost trust in, and then rely on my trusted sources. Not really very different from a journalist. And that’s the point.
TechCrunch’s policy of disclosure may help you take a positive review with a grain of salt, but it won’t help you learn about that startup they never wrote about.
** Their power isn’t from writing positive articles, but writing any article in the first place. Distribution is more powerful than content. Heard that before? Disclosure doesn’t fix that.
I covered just this topic today in a post titled “the new Silicon Valley bribe:” https://plus.google.com/111091089527727420853/posts/VDSkSYEVUdV
In it I discuss how the influence networks work and what I’m doing to fight them (openness, transparency, availability, helpfulness).
(See if tags work here)
If the connected peers are being good judges of information and its sources, they will do a good job of solving the distribution issue too. This implies that they will:
Call out glaring omissions, such as not writing about something that is deserving
Spread and promote deserving subjects themselves
Promote peers that do these things well to positions of greater influence
To the extent that TechCrunch is being discredited right now for real shortcomings in its honesty or its breadth of coverage, this is the system doing its job and I applaud that.
To the extent that this good work is being accomplished by professional journalists, those journalists deserve credit and should be trusted more by others in the network.
I still don’t see reason to make much distinction between “journalist” and “blogger”. These are both “people who publish”, except that “journalist” has a disclosed employment relationship with a (often large) media company. This relationship involves unknown tens of thousands of dollars per year, but the relationship is prominently shown.
If the journalist or blogger has published an ethics statement and they adhere to it, that’s a good reason for peers on the network to pay them more attention and trust.
Ethics? Conflict of Interest?
JLG has proved he could be both a VC and a fair columnist, right?
A consumer of news media has the best assurance of unbiased advice when they pay for information directly. But subscriptions and micropayments are becoming harder to sell as the Internet has made the supply and distribution of media easier.
Plus the alternative of funding media through advertising is also being hit hard by the Internet, as product makers are given new ways to get their message out (particularly search advertising and their own websites), as the ad spend gets spread across many more media outlets, and as consumers increasingly avoid the intrusive advertising made possible by the net, and accepted by financially-pressured publishers.
Not only that, but advertising means that media outlets must surround their material with the most biased type of information of all, which isn’t a great service to their users. And media outlets actually have to have sales teams that need to talk directly to, and keep on good terms with these advertisers.
How then do we fund news?
the situation is obvious on all major tech sites, and to think Scoble has the nerve to make a comment on this topic is laughable–he’s probable the biggest apple shill there is and TechCrunch and engaged are the two biggest armies of pro apple bloggers/influencers.
anyone whom spends any time reading tech sites knows full well that most all tech writers are nothing more than shills.
I do have clear suspicion that Mike Arrington have some stack in Instagram and Quora.
Please investigate.
TO SEE TRUTH HOW I BE HAPPY ABOUT BUSINESS.
ejemplo perfecto lo tenemos en TechCrunch y en su fundador, Michael Arrington. El “enfant terrible” de [...]
wow, guess some of you are as far removed from journalism ethics as you can get.
.
Q Wang gets it right:
.
“TechCrunch’s policy of disclosure may help you take a positive review with a grain of salt, but it won’t help you learn about that startup they never wrote about. Their power isn’t from writing positive articles, but writing any article in the first place”
What we’re dealing with is not the difference between editorial standards in “old” vs. “new” media, but rather a shift in overall journalistic standards over the last 10 to 15 years. For example, David Pogue of The New York Times is often caught in ethical conflicts: He writes reviews of the same products that he writes, edits and publishes (via an imprint of O’Reilly Media) books about. Most recently, he said in a video that he had gotten the ideas for most of his recent stories from public relations representatives. Pogue is also widely seen in the industry as a “shill” for Apple, as is Wall Mossberg: Both men get first look at Apple’s new products, and can be counted on to give almost uniformly positive reviews.
I’m not pointing this out in order to defend Mike Arrington–I find his behavior, and that of AOL and the investors in his new CrunchFund, reprehensible. However, journalistic standards are set by the writers, editors and publishers involved with the journalism, not defined by whether they come from “old” or “new” media.
thanks !! very useful article!
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This has to be one of the most interesting articles i’ve ever read on a blog! (then again, this is one of the most interesting blogs i’ve ever come across)
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