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TechCrunch sells to AOL (price: $25M)

The popular indie tech blog gets absorbed into AOL's expanding Web empire

Financial trends and news by Faith Merino
September 28, 2010 | Comments
Short URL: http://vator.tv/n/1225

As of today, TechCrunch can no longer claim establishment-flouting indie blog status.  AOL announced Tuesday morning that it has agreed to acquire TechCrunch.  The terms of the deal were undisclosed, but according to unnamed insiders who spoke to Business Insider, the blog network was acquired for $25 million, which is considerably less than what TechCrunch has been pegged for. 

Founder Michael Arrington recently estimated the site’s revenue to be some $10 million, which would value the acquisition at only 2.5 times its annual revenue.  This is a little surprising, considering last week’s buyout of Internet Brands, an online content company that owns and operates more than 100 community and e-commerce websites, which sold for four times its annual revenue.

AOL is not commenting on the terms of the deal (not even to deny them).  While the terms of the deal were not officially disclosed, as part of the deal, TechCrunch will maintain its editorial independence and will also remain headquartered in San Francisco. 

The acquisition comes as part of AOL’s plan to overhaul its content strategy and “will further AOL’s strategy to become the global leader in sourcing, creating, producing and delivering high-quality, trusted, original content to consumers,” according to the press release.

Founded in 2005 by Michael Arrington, TechCrunch hosts a global network of properties from Europe to Japan, along with several vertical-oriented websites, such as GreenTech, MobileCrunch, CrunchGear, CrunchBase, TechCrunchTV, and TechCrunchIT. 

TechCrunch and its gaggle of properties will join the AOL Technology Network, which currently includes AOL’s tech-flavored properties, such as Engadget, the Web magazine about gadgets and consumer electronics; Switched, a site that focuses on digital media and entertainment; TUAW, the unofficial Apple blog; and DownloadSquad, which centers around downloadable software.

The acquisition of TechCrunch comes as a nice boon to AOL, whose Engadget site has ranked just behind TechCrunch in the online breaking tech news area.

In a perhaps overly-saccharine statement that is not at all consistent with TechCrunch’s more biting style, Arrington commented in the company’s press release: “I look forward to working with everyone at AOL as we build on our reputation for independent tech journalism and continue to set the agenda for insight, reviews and collaborative discussion about the future of the technology industry.”

The move comes as a surprise to many, especially considering Arrington’s background as a status quo-challenging rebel-entrepreneur who previously worked in the domain name industry, which he later called “dirty” and left to start up TechCrunch in 2005.  In 2007, Arrington fell into a comment war with domain investor Frank Schilling, who Arrington called “king of the squatters.”  The flame wars went back and forth before Arrington tapped out and erased all of the comments.

A number of TechCrunch readers are not happy about the acquisition, not only for the scent of “selling out” that it seems to exude, but for the fact that TechCrunch has not disclosed pricing.  One reader, who posted under the name “Pat” with no user profile, commented: “When I sold my company, TechCrunch refused to publish unless I provided pricing.”

A number of readers are even asking if the acquisition is a joke.  But, to quote Mia Farrow in Rosemary’s Baby: “This is no dream…this is really happening!”

Image source: latimes.com


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