AOL is reported to pay $25 million for the blog network that includes Engadget, Autoblog, and around 82 others, in an all-cash deal. Calacanis says ad space on 12 of the blogs is sold out until the end of the year:
What every advertiser says to us is, ‘Please get us more traffic. We want to spend more money’. That was one of the major factors [in selling].
AOL launches the new blogging network that features bloggers posting about individual stocks, from Google to Time Warner. It is the first new product for Weblogs since AOL bought the company. The bloggers are encouraged to be stockholders, although not necessarily in the companies they write about. They must sign a code of ethics, disclose their holdings, and not trade on insider information.
Calacanis leaves the company after CEO Jonathan Miller is fired. Calacanis:
I’m not inclined to start over with a new guy. I’m perplexed. Why now?
A person with knowledge of the deal tells Business Insider that AOL paid $25 million for Tech Crunch, while a separate source tells CNBC it paid $40 million. The $25 million figure would be low at 2.5x estimated valuation compared with a recent deal for a comparable company at 6x – the $40 million may be the total price including earnouts for performance and retentions.
The company annouces the acquisition along with the purchases of instructional video site 5min and Thing Labs Inc. People familiar with the deal say it paid around $30 million for TechCrunch. Arrington is retained on a multi-year deal. AOL chief executive Armstrong:
The one thing that doesn’t change is people’s consumption of content.
Business Insider reports that among the investors in the fund are AOL, Conway, Milner, Benchmark Capital, Horowitz, Andreessen, Redpoint, and Sequoia.
Arrington writes that the main issue isn’t his employment status. He says two options have been proposed to AOL:
1. Reaffirmation of the editorial independence promised at the time of acquisition. Given the current circumstances, that means autonomy from Huffington Post, unfettered editorial independence and a blanket right to editorial self determination. To put it simply, TechCrunch would stay with AOL but would be independent of the Huffington Post.
2. Sell TechCrunch back to the original shareholders.
He sets an ultimatum:
If AOL cannot accept either of these options, and no other creative solution can be found, I cannot be a part of TechCrunch going forward.
AOL announces that Arrington is officially out of the blog. Arrington:
It’s no longer a good situation for me to stay at TechCrunch. [It’s] a sad day for me.
We love Mike and it was the right, amicable decision that we came to together. We’re super excited about our relationship with him going forward.
Armstrong denies reports that said AOL is interested in selling the two properties and some smaller tech-relate dpublications as a package for $70 million-$100 million:
We are planning to invest in those properties, not sell those properties
Arrington announces that he has been ‘unfired’. He says he is not running the blog, and AOL has already killed one post:
So that was new. Being told “no,” that is.
He plans to post a couple of times a week:
There are tons of other venture capitalists writing regular guest posts for TechCrunch already. Just consider me one of those.