Many have wondered whether this shows that AOL made a mistake when it bought TechCrunch. Or whether Arrington screwed up by selling to AOL.
But the real lesson of this episode is what it tells us about the future of media. And, to avoid any further suspense, here’s what that is: the future is murky.
That’s not a cop-out. The truth is that what we’re seeing is a dramatic realignment of media and the power relations are still being worked out.
The TechCrunch fight officially began last week, when Fortune reporter Dan Primack broke the news that Arrington was forming a venture fund to invest in startups. AOL was investing in the fund. The fund would invest in startups TechCrunch covers.
“Everyone went crazy — it would be conflict of interest piled on conflict of interest piled on conflict of interest,” Pascal-Emmanuel Gobry explained at the Daily.
What followed was a power struggle.
Arrianna Huffington, who took over AOL’s media properties when AOL bought the Huffington Post, fired Arrington. Early reports from Business Insider indicated that Arrington was out of AOL altogether.
Then it emerged that he was still in AOL but no longer running TechCrunch. He had a new position at AOL.
So was AOL backing Huffington? Or Arrington? Both? Neither? Someone had gone rogue. For a time, it seemed as if everyone had gone rogue.
Weirder still, Arrington refused to be fired. Somehow still writing at TechCrunch, he announced that he would quit if he wasn’t given independence from Huffington and offered to buy TechCrunch back from AOL.
The conventional wisdom about this whole affair is fast hardening around the sentiments that Gobry gave voice to at the Daily:
[Arrington’s] problem is that he wants AOL’s money but not its accountability. AOL paid a lot of money for Arrington to be a journalist for it. If he wanted to be able to do anything he wants with TechCrunch or his investments, he should never have sold the company he started. That’s the bitter lesson learned by many entrepreneurs who sold their companies. The buyer makes you a millionaire, but the buyer also makes the rules.
I don’t think things are that cut-and-dried. Our big media companies—including AOL and Yahoo—need to acquire talent and content sites because they have shown that—with a few notable exceptions—they aren’t very good at developing them on their own. It’s not impossible to develop talent and sites internally, but it can be far more costly than acquiring sites.
The independent websites that are thriving are run by highly engaged people who know their space and audiences very well. They’ve specialized in producing the niche content for the audiences they are aiming for. This involves very different skill sets than those that have made people successful newspaper, television, or magazine editors.
But an acquisition strategy is self-defeating if you wind up unable to retain and utilize that talent. So the “we bought you, you do what you’re told” model is not going to work. Huffington, for instance, would not tolerate for a moment the idea that AOL “makes the rules.”
Just look at what happened: she fired Arrington, apparently without asking anyone.
The rules for this new era of media, with smaller agile sites operating within larger organizations, are still being written. And re-written. And we’ll probably have a lot more weirdness before this over.
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