AOL to buy TechCrunch to bolster its news coverage

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By Verne G Kopytoff, The New York Times | Updated: 6 June 2012 17:34 IST
Highlights
  • AOL said on Tuesday that it was buying the influential technology news blog TechCrunch to bolster its growing online editorial business.
AOL said on Tuesday that it was buying the influential technology news blog TechCrunch to bolster its growing online editorial business.

The deal, signed on stage at a TechCrunch conference here, will add to AOL's technology coverage, which also includes the gadget blog Engadget.

The companies did not disclose terms, but the price tag was more than $25 million, according to a person with direct knowledge of the deal who was not authorized to speak publicly.

The acquisition is another step in AOL's quest to revive its reputation as a hub for online news. Under Tim Armstrong, AOL's chief executive, the company has hired hundreds of reporters to cover local news for the company's Patch property, in a bid to strengthen online advertising revenue.

AOL is betting heavily on ad-supported content as its future, after its spinoff from Time Warner last year. The strategy sets it apart from Google, which does not create any of its own content.

AOL also said on Tuesday that it had acquired 5min Media, a Web video syndication company that distributes a library of video clips from 1,000 media companies to other Web sites. It also bought Thing Labs Inc., which makes software for consumers to post online.

Mr. Armstrong told the TechCrunch conference audience that AOL would use TechCrunch as a pillar of its technology coverage. It will operate independently from Engadget, he said, but the two sites will use some of each other's content.

TechCrunch, founded in 2005 by Michael Arrington, a lawyer, is widely read by technology industry insiders for its mix of breaking news and commentary -- some of it bombastic. The company generates $10 million in annual revenue and $3.5 million in profits, he has said. It gets about 3.8 million unique visitors a month, ranking it as one of the more popular technology news sites. AOL's Engadget gets about 7.3 million visitors a month.

Mr. Arrington, who is a major editorial voice for the site and a crowd-drawing fixture at his conferences, said in an interview that he planned to stay with TechCrunch for years, if not "all my life." The agreement includes incentives to encourage the site's staff to stay for three years.

Mr. Arrington said that AOL had promised "not to impose their bureaucracy" on TechCrunch and that he would retain editorial control.

Over the years, financing for TechCrunch has come entirely out of Mr. Arrington's pocket.

Mr. Armstrong of AOL first approached TechCrunch about an acquisition in May, according to Mr. Arrington, who added that the talks accelerated in the last four weeks. The two companies had discussed a deal two years ago, but nothing came of those talks, he said.

Yahoo and CNet, owned by CBS, had also courted TechCrunch, Mr. Arrington said.

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Further reading: AOL, TechCrunch, technology
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