TechCrunch Drama Fest Is an AOL Management Meltdown

The sturm und drang over former TechCrunch editor Michael Arrington having been, or not been, fired, given a new position, going into business, welcomed back, no, fired at AOL has been dizzying to watch from the outside. (Now there's a rumor, according to Jason Calacanis, that Saul Hansell, who went to AOL from the New York Times, is the new TechCrunch editor.) The game of editorial ping pong has even brought into question the site's future influence on tech.

For a moment, look at the infighting, like TechCrunch writer MG Siegler's posts about the mess, as less about drama and cries of "No one else understands us!" and more about management. AOL's management, to be precise. This problem was one long in coming, and the way this car plowed into the wall shows the divided interests, poor communications, and wrestle for ultimate power at the company. It's a bad sign for far more than one tech news site.

Big problems start as little ones
The issue started when Arrington sold TechCrunch to AOL. As with any acquisition, misplaced expectations will come back to haunt you. Arrington saw the arrangement as one that would give TechCrunch a sales and technical infrastructure with complete editorial freedom. AOL CEO Tim Armstrong told him so.

I've said before that Arrington has shown naiveté in business, even though he's clearly experienced in doing deals. This is another example.

Armstrong, a sales guy, through and through, wanted TechCrunch and so told Arrington what he wanted to hear -- and probably convinced himself at the same time. But you can't have one company buy another, hope for a level of integration, and still expect to maintain completely separate corporate cultures and a major level of autonomy.

Where Armstrong first went wrong was apparently in not making crystalline that AOL would have some requirements. For example, TechCrunch would be part of a bigger company that would expect some sense of loyalty. A very public holier-than-thou fight over a move review between staffers at TechCrunch and AOL showed how little connection TechCrunch employees apparently felt with the company that they actually worked for.

Along came Arianna
When AOL bought Huffington Post and Armstrong put Arianna Huffington in charge of all editorial, you could practically guarantee that her ego and that of Arrington would have difficulty fitting into the same room. And then, both Armstrong and Huffington agreed that the editorial aspects should become more traditionally journalistic.

And then, Armstrong made a deal with Arrington, supposedly allowing the latter to become a VC, with AOL providing a big part of the money, while still writing for TechCrunch. Finally, Huffington heard of it.

I've often been critical of Huffington in the past. But if she was actually blindsided by the plan of making Arrington a venture capitalist and a staff editor or writer on a site that heavily covers starts-ups, I can see how she'd have to just say no. Although I'm sure the TechCrunch folk would take issue, there is no way anyone can reasonably argue that such an arrangement doesn't pose an unreasonable danger of conflict of interest, whether through sins of omission or commission.

Quite the multi-faceted management mess
Of course things blew up. Armstrong should have known that they would. No matter how hungry AOL is for revenue, such a deal was incompatible with the company's stated interests of being more professionally journalistic. What would you expect the head of editorial to say?

Maybe Huffington's famed temper was the reason Armstrong didn't apparently talk to her about the arrangement in advance. Whatever the reason, not communicating with the top people involved was communication that was worse than poor. It also suggests that Armstrong lacks a good control of the operation.

Forget TechCrunch. AOL continues to show signs that its management structure won't scale to properly control the company. If this organization is going to work, then all the people involved have to get out of a small company mindset. Those days are gone. And if they want more professional days in the future, then getting some competent consulting help in and fixing how management works is vital.

Related:

• Conflict Zone: AOL Sets Up TechCrunch's Arrington as a VC, but Still Lets Him Write
• AOL Display-Ad Revenue Is Up -- Just Not Enough to Make Up for Other Suckage
• Did TechCrunch's Arrington Just Invest in an AOL Exit Strategy?
• Can Huffington Post Management Scale To Run AOL?
• Internal AOL Meetings: De-emphasize Journalism, Focus on "Brand"