Peter Kafka

Recent Posts by Peter Kafka

The Pros and Cons of a TechCrunch/AOL Deal

Could AOL buy TechCrunch–a possibility that both Om Malik and The Wall Street Journal say is on the table? Sure.

Does that make sense? Good question.

TechCrunch is a big, successful Web site, and big successful Web sites are very hard to build. AOL (AOL), which is pushing hard to build out its own media business, has had little success building big sites on its own.

The two negatives for AOL CEO Tim Armstrong: TechCrunch is still very much identified with founder Michael Arrington, though his team has worked vigorously to change that perception and distribute the load. So Armstrong would have to work hard to keep him, and to keep the volatile entrepreneur happy.

And TechCrunch is deeply invested in the live-events business. That can be very profitable work, but it tends not to get the same kind of valuation that pure-play Internet business can garner.

But AOL has pursued TechCrunch in the past. One proposed deal, in the pre-Armstrong era, fell apart over price. “When the talk got into the $30, $40 million range, AOL just kind of choked at the time,” says a person familiar with the discussion.

And under Armstrong’s leadership, AOL has shown a willingness to get into the events business. The Web publisher has talked to other tech-news operators about a deal, including Kara Swisher and Walt Mossberg, who run this site and related conferences for Dow Jones, which is owned by News Corp. (NWS). Those talks were preliminary at best, and All Things Digital will remain with Dow Jones.

I’ve asked AOL and TechCrunch for comment and will update if I get one.

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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle