When TechCrunch founder Michael Arrington shocked the industry by selling his site to AOL, no one expected the matchup to end well. Exactly one year later, it imploded.
In a move that the New York Times called "almost comically over the line," Arrington announced plans to launch a $20 million venture capital fund called Crunchfund. The idea of Arrington running both the most influential news site covering startups and a fund investing in those same startups set off alarm bells.
While AOL CEO Tim Armstrong approved the arrangement (he called TechCrunch a site with "different standards"), AOL editorial head Arianna Huffington kiboshed it, proclaiming that Arrington was off AOL's editorial payroll. If he wanted to keep writing, he could do so as an unpaid blogger, she suggested.
Huffington's gauntlet throw sparked a weeklong soap opera as Arrington first tried to preserve his TechCrunch editorship, then offered to buy TechCrunch back from AOL, and finally resigned. His departure sparked an exodus of TechCrunch's best-known writers, leaving AOL with a Pyrrhic victory.-- Stacy Cowley
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