So long, AOL: CrunchBase is becoming a stand alone company

Does this news give us a hint of what will happen to AOL's other brands, like the Huffington Post?

As someone who writes about startups, I use private company database CrunchBase all the time. It's the only place where I can look up the company I'm writing about and see a list of all of their investments, and investors. That makes is an indispensible resource to someone in my line of work. I won't say that the info is always 100% accurate, but it's still the best service out there for that information.

Big things are now happening over at CrunchBase right now. The service, which became part of AOL when it purchased TechCrunch back in 2010, is going out on its own, it was announced on Tuesday.

Going forward, CrunchBase will be its own standalone company. In addition it also revealed that it has a new CEO: Jager McConnell, who was VP Product at Salesforce.com for over 11 years. Prior to that he spent four years as Head of Product at Betasphere. McConnell is replacing Matt Kaufman, who will now be Head of Operations for CrunchBase.

The decision for CrunchBase become its own entity was spearheaded by Emergence Capital, who seems to have taken quite an interest in CrunchBase. Not only did the firm fund the company's spin-out, but it also selected McConnell as its new CEO, and it is also leading an investment round in CrunchBase.

“At Emergence, our mission is to invest in the cloud visionaries who are building the most important business applications. The more we learned about CrunchBase, the more excited we became about its potential," Santi Subotovsky, Partner at Emergence Capital, said in a statement.

"Emergence loves working with early stage companies to build market leaders. We believe wholeheartedly in the potential of Jager McConnell’s leadership and the CrunchBase team, and we are excited to team up with AOL to invest in this rich platform.”

AOL is not letting go on CrunchBase altogether. It will be retaining "a significant economic ownership interest" in the company, and Mark Roszkowski, SVP, Head of Corporate Development, AOL, will serve on the board of directors. Neither the size of AOL's stake, nor the size of the investment round, were disclosed.

"CrunchBase is what it is today because of its community. As Yelp has done for helping you choose where to eat, and Wikipedia has done for helping you research anything, we have come together as a community of contributors to change the way information about companies is gathered, shared, and understood. None of this would have been possible without people like you who are giving back to this community every day," Kaufman wrote in a blog post.

"Looking ahead, we can’t wait to share with you the exciting things we’re building, and we would love to get your input about what you would like to see."

Going forward CrunchBase will continue to be headquartered in San Francisco.

The future of AOL properties

While this is obviously big news, and it will be great to see what happens to CrunchBase as it goes forward, this news might actually portend something even more important: what happens to AOL's other content brands.

When it was announced earlier this year that Verizon had agreed to buy AOL for $4.4 billion, the accepted wisdom was that the deal was for AOL's video and advertising platforms. 

It didn't seem as though Verizon would have much interest in running AOL as a media company, so what would happen to all of AOL's other properties, including The Huffington Post, TechCrunch and Engadget, remained up in the air.

When you break down  how AOL makes money, it makes sense that Verizon wouldn't have much interesting in holding on to these other brands.

Of the company's $625.1 million in revenue in the first quarter of 2015, $483.5 of that came from global advertising. That include display ads, which accounted for $130.5 million; ads on search, which took in $116.4 million; and, most importantly, ad revenue from third party properties, which accounted for the biggest slice by far: $231.6 million.

Third party properties are those sites that AOL helps sell advertising on, as opposed to the display and search ads, which it runs on its own properties. It's telling that the company made much more money from the former than from the latter, and it explains why Verizon wants to get its hands on the company's video and advertising services.

Now this news essentially confirms that, yes, Verizon will most likely purge its new acquisition . Not all properties will become stand alone companies, and no doubt some of them will be sold off. But it seems to be a given that, by this time next year, sites like the Huffington Post will no longer be AOL properties.

VatorNews has reached out to both AOL for comment on the future of its other properties. We have also reached out Emergence Capital for further comment on its investment in CrunchBase. We will update this story if we learn more. 

(Image source: crunchbase.com)