TechCrunch Founder's Demotion Sparks Internal Conflict at AOL

3:54 PM PST 09/06/2011 by Sophie Schillaci

Site founder Michael Arrington’s recent shift to unpaid blogger has staffers at the site crying foul.

Nearly a year after being purchased by AOL, TechCrunch writers fear that the site as they know it may never be the same.

Michael Arrington’s new role within the company remains unclear, as the TechCrunch founder announced the launch of CrunchFund last week, a $20 million venture capitalist fund to invest in technology start-ups, which is backed by AOL. The move sparked questions of whether Arrington’s involvement represented a journalistic conflict of interest, which, according to Yahoo’s The Cutline, led to a new role within the company.

“Michael has stepped down and is no longer on the editorial payroll effective immediately,” Huffington Post Media Group president Arianna Huffington said, noting that he would only be allowed to continue writing as an unpaid blogger.

“Michael’s role has changed,” an AOL spokesperson clarified. “He now works within AOL Ventures. He’s becoming a professional investor. He is no longer involved in editorial.”

Writers for the site were quick to jump to Arrington’s defense, claiming that their boss never pushed his own agenda within their editorial department, and was consistently open and up-front about all investments. Late Monday night, MG Siegler told readers that the entire staff was very much in the dark about the blog’s future.

“Mike unveiled an investing entity known as the ‘CrunchFund’ with full AOL support – so much support, mind you, that they’re the largest backers of the fund – only to have his legs kicked out from under him due to what can only be described as nonsensical political infighting and really poor communication,” he wrote.

“It has almost been exactly one year since AOL acquired us. At the time, they promised not to interfere with the way we do things. For 11+ months, they’ve kept their word, and things have run beautifully from our end,” Siegler added. “Our business is one of the few sterling ornaments on their mantel. Now they may break their promise to us. And if that promise is broken, it will break TechCrunch.”

The man in question only recently spoke out, utilizing his unpaid blogger freedom to write a post titled “Editorial Independence” on Tuesday afternoon.

“My employment relationship with TechCrunch and AOL is not the core issue. The only issue being discussed at this point, the only issue that matters, is TechCrunch editorial independence and self determination. Regardless of my role, if any, going forward,” he said.

“As of late last week TechCrunch no longer has editorial independence,” he continued. “Editorial Independence was never supposed to be an easy thing for AOLto give us. But it was never meaningful if it shatters the first time it is put to the test.”

He then explained the options given to the parent company, which include reaffirmation of editorial independence, or selling TechCrunch back to its original shareholders.

“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,” he said.

Fear of impending change likely stems from the former movie blog, Cinematical, which closed its doors earlier this year – the result of an ill-fated merger with AOL’s Moviefone. It had been predicted that a decision would be made Tuesday regarding Arrington’s involvement with TechCrunch, which has yet to come to be made public.

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