Would it surprise you to know that BoomTown doesn’t really care anymore if TechCrunch editor Michael Arrington sidelines as a blogger while he makes investments in tech companies his tech news site covers?

In a post yesterday, titled “An Update to My Investment Policy,” Arrington made his seemingly cogent arguments that plenty of disclosure made it all “fine,” took one of his typical look-at-me swipes at anyone who dared to question this logic (apparently, we’re crappy “direct” competitors, so we haters have no standing to comment!) and presumably went on his merry investing way.

While I was first irked–because it was an appalling show to many of us cranky standards-insisting whiners–I soon realized Arrington had made a good argument about who he is and, frankly, who he has always been.

In other words, it’s a kind of there-he-goes-again thing, vaguely icky but hardly surprising and completely genuine.

Meanwhile, his new boss, AOL content head Arianna Huffington, pointed me to his post in an email.

When I asked her for an on-the-record comment, as usual, she politely and quickly complied, writing in support of Arrington:

“TechCrunch is committed to transparency. Michael has written about the guidelines he follows–that he rarely writes about companies in which he is an investor, and that, when he does, he clearly discloses this information. The same rules apply when TechCrunch’s writers cover these companies.”

Hold the phone.

Because while I kind of understand where Arrington is coming from, what I don’t understand is how this kind of convenient and on-the-fly rule-making can govern a much larger company whose strongly and repeatedly stated goal by Huffington herself is to create quality journalism.

Since I believed Huffington–whom I like very much as an Internet figure and as a friend–I was confused at what the rules for the whole of AOL content were now.

That’s why I sent her a long new list of questions to answer, which are:

1) What are, if any, the ethical guidelines about making investments for the editorial staff at HuffPo media group properties?

2) Since Arrington now seems to have permission to do so from you, can other editors at AOL properties do the same–that is, make very adjacent investments to what their site covers, as long as they disclose it? For example, can an editor who runs the entertainment site make investments in entertainment companies she/he has coverage responsibility over? (By the way, did you give him permission to make these investments? Did he ask?)

3) Is there anyone who polices what is fair coverage of competitors–i.e. companies competing with companies your editors invest in?

4) If an editor makes investments in a company and someone who works for them writes about that company, does that editor have to recuse himself from the story? Is that even possible?

5) Since you just fired someone for what you called an ethical breach–asking freelancers to work for free and also seemingly defending an attempt to curry favor with an advertiser/client–why is this not an ethical breach?

I had a lot more questions, still unanswered by Huffington, but you can see where this is going.

Simply put, does AOL, which is touting itself as a 21st-century media company, need to have 21st-century rules of the road? Or perhaps not so much?

UPDATE: Now, it is a real clown circus at AOL, with the company declaring that editorial personnel cannot make investments, except Arrington!

“As a rule, in order to avoid conflicts of interests, AOL Huffington Post Media Group editors, writers, and reporters may not have a financial interest in a company or industry that they regularly cover,” AOL said in a statement to Business Insider today, even though I nicely asked for a comment on the issue yesterday. “Arrington operates from a unique position.”

And how! Where do I get such a faboo ethical hall pass from Content Principal Huffington?

I suppose I should go all slouching-towards-Bethlehem here, and wring my hands over this unusual ruling, but what’s the use?

As you might have read: “The best lack all conviction, while the worst are full of passionate intensity.”

How did this all start, especially since I feel like this ridiculous tempest in a Silicon Valley teapot over Arrington’s investment-making might actually be my fault a little bit?

Here’s why:

On Tuesday night around 10 pm (just when I start getting revved up), I wrote a testy email to Arrington’s bosses at AOL–Huffington and CEO Tim Armstrong–as well as the Internet portal’s sharp PR head, asking for a response about what seemed to me to be a glaring conflict of interest at TechCrunch related to new investment activity by Arrington and the site’s coverage of those particular companies he had invested in.

It was all disclosed, of course, but it still felt, as I said, icky.

And, given the recent and loudly stated goal of promoting quality journalism by Huffington–including the recent dismissal of AOL’s Moviefone site editor over what the company considered ethical lapses–it seemed pertinent to ask.

Mostly because I don’t think they actually knew much–if at all–about Arrington’s increasing investing action. Armstrong said as much in an email to me, and Huffington assured me they were going to check it out tout de suite.

But rather than the answer I was waiting on, up popped Arrington’s missive yesterday, which I assume came after his bosses asked for some info on this.

In it, he explained his controversial decision to go back into investing again, in what is clearly a more significant manner.

It was a practice he had abandoned years earlier, apparently after being pecked by detractors for it.

But, dear readers, no more! Let Arrington be Arrington!

And that seems to be a talented blogger with a flare for the dramatic, with a clearly sharply-honed news nose and sassy writing skills, but a scribe who much prefers to be a playah than just an observer and chronicler of that play.

And, after more reflection, I thought: Well, maybe it is a better idea for Arrington to go play with all the boys in Silicon Valley, which would probably be more fun than taking flack for lack of traditional journalistic ethics he never ascribed to in the first place.

I once jokingly nicknamed Arrington Yertle the Turtle after the Dr. Seuss book on one dubious king of one small pond in Sala-Ma-Sond, after he went particularly nuts on the topic of news-embargo breaking.

That diatribe on how he saw news rules–which is to say, there aren’t any that bind him–was vintage Arrington, too. And, after reading his latest post, I suddenly realized that it’s pointless to give a turtle a hard time for not being a fish.

But Huffington is another story. She has put herself in word and deed right into the center of the debate on where news is going on the Web, especially after AOL paid $315 million for her Huffington Post news and opinion site.

Huffington has certainly taken a lot of hits over the years as the HuffPo has grown, some deserved, but she has clearly led an impressive effort.

In fact, I think the cute-kitten and celebrity-loving angle played up by her detractors to dismiss her is silliness, because she and the Huffington Post are clearly more than that and are obviously having a major impact on the future direction of content in the digital age.

But that power she has sought also gives her a responsibility to say exactly what that means on a real and granular and consistent level, beyond the platitudes of wanting to make great journalism that she declares all the time now.

In other words, very specifically: What does Arianna Huffington stand for in regards to journalism? What are her rules and standards and codes? And, perhaps more importantly, what does she not stand up for?

These are questions I hope Huffington–who is really good at smacking back at criticism, too (See: the New York Times’ Bill Keller)–will address in one of her patented blog-xplosions and many times over, too.

Until then, here’s a link to my very long and very detailed ethics disclosure on All Things Digital, which is exactly how our little site thinks it should be in the digital age.

In short, besides signing the Dow Jones Code of Conduct–standard at The Wall Street Journal and other DJ publications–all our editorial staff is required to also pen their own in-plain-English personal and detailed account of disclosures that are pertinent to their job.

(You can read an extensive interview with me on the subject, in fact, which was posted here by Two Bananas Marketing, this week.)

My ATD disclosure is probably the most detailed of all of them, since I gay-married Megan Smith a dozen years ago. She later became a VP at Google, which I cover from time to time, especially related to other companies I focus on more, such as Yahoo.

Most of the time, if you care to read my posts on Google, I am probably tougher and snarkier than not, mostly because I know the search giant from its earliest days.

And, even though I once wrote extensively for the Journal about Google since its founding and before Megan arrived there, I thought it wise to lay it all out in detailed detail.

(By the way, if you want to try to tweak me by asking what News Corp.-owned Fox News’ ethics rules are, I don’t know, as ATD belongs to Dow Jones, which has had them forever. I will say, though, that Roger Ailes often freaks me out.)

In any case, as Arrington preaches, the more disclosure the better, and perhaps I should say even more so here, given the current swirl, by noting explicitly that I garner exactly no financial benefits from my relationship with Megan.

That might seem odd, because she certainly earns more. But I don’t know how much nor do I ask, since we have separate bank accounts and she always pays up–well, almost always–when half the bills are due. While it sounds painfully un-romantic, we only spend overall what each of us can afford equally in an exact 50-50 split.

In addition, I also legally signed away all rights to inheritance–although I had no such marriage rights in the first place, being gay–of Megan’s assets, which are in a trust for her relatives and our sons (for when they are too old to have any fun).

More to the point, I believe this makes me the only person to marry an exec at a hot Silicon Valley company with no prospect of any gold-digging.

Thus, I clearly would make the worst investor ever–not that I ever invest in tech or plan to while I am a reporter covering the sector.

Thank god, I suppose, that Michael Arrington is there to take up the slack.

“Stay in your place
While I sit here and rule
I’m king of a cow
And I’m king of a mule”
—Yertle the Turtle

In my last post, I mentioned that you should strive to hire people with the right kind of ambition. Surprisingly to me, I received a large number of responses from readers questioning whether or not this was good advice. Here’s how one commenter phrased it:

I agree with much of this post but I disagree with the following:
“As defined by Andy Grove, the right kind of ambition is ambition for the company’s success with the executive’s own success only coming as a by-product of the company’s victory.”
That may have worked in the past but I believe today, the company’s success and the executive’s success should go hand in hand, not one coming as a by-product of the other, particularly as described above.
Curious why should an employee be motivated first by a company’s success? Would this work in all departments—i.e. sales?
In addition to comments like the one above, my business partner Marc Andreessen suggested that I write a post on how to screen for the right kind of ambition. In response, this post aims to clarify why you should care about senior managers having the right kind of ambition and give some tips on how to screen for them in an interview.

Why should senior managers have the right kind of ambition?
At a macro level, a company will be most successful if the senior managers optimize for the company’s success (think of this as a global optimization) as opposed to their own personal success (local optimization). No matter how well the CEO designs the personal incentive programs, they will never be perfect. In addition, career incentives like promotions and territory ownership fall outside the scope of bonus plans and other a priori management tools. In an equity-based compensation structure, optimizing for the company’s success should yield better results for individuals as well. As my Opsware head of sales Mark Cranney used to say, “Two percent of zero is zero.”

It is particularly important that managers have the right kind of ambition, because anything else will be exceptionally de-motivating for their employees. As an employee, why would I want to work long hours to advance the career of my manager? If the manager cares about his career more than the company, then that’s what I’d be doing. Nothing motivates a great employee more than a mission that’s so important that it supersedes everyone’s personal ambition. As a result, managers with the right kind of ambition tend to be radically more valuable than those with the wrong kind. For a complete explanation of the dangers of managers with the wrong kind of ambition, I strongly recommend Dr. Suess’s management masterpiece Yertle the Turtle.

Screening for the right kind of ambition
As with any complex character trait, there is no way to perfectly screen for the right kind of ambition in an interview, but hopefully some of these thoughts will prove useful.

At a macro-level, everybody views the world through her own personal prism. When interviewing candidates, it’s helpful to watch for small distinctions that indicate whether they view the world through the “me” prism or the “team” prism.

People who view the world through the me prism might describe a prior company’s failure in an interview as follows: “My last job was my e-commerce play. I felt that it was important to round out my resume.” Note the use of “my” to personalize the company in a way that it’s unlikely that anyone else at the company would agree with. In fact, the other employees in the company might even be offended by this usage. People with the right kind of ambition would not likely use the word “play” to describe their effort to work as a team to build something substantial. Finally, people who use the “me” prism find it natural and obvious to speak in terms of “building out my resume” while people who use the “team” prism find such phrases to be somewhat uncomfortable and awkward, because they clearly indicate an individual goal which is separate from the team goal.

On the other hand, people who view the world purely through the team prism will very seldom use the words “I” or “me” even when answering questions about their accomplishments. Even in an interview, they will deflect credit to others on their previous team. They will tend to be far more interested in how your company will win than how they will be compensated or what their career path will be. When asked about a previously failed company, they will generally feel such great responsibility that they will describe in detail their own misjudgments and bad decisions.

When we hired the head of worldwide sales for Opsware, using this screen proved to be quite valuable. We interviewed over 20 candidates for the position before hiring the aforementioned Mark Cranney. Since this was a sales position, I should mention (in reference to the commenter above) that ambition for the company above ones own goals is particularly important for the head of sales. The reasons are many:

• The local incentives in sales are particularly strong and difficult to balance without the right kind of leadership
• The sales organization is the face of the company to the outside world. If that group optimizes for itself, your company will have a major problem
• In hi-tech companies, fraud generally starts in sales due to managers attempting to perfect the ultimate local optimization

Throughout our interview process, candidates would take sole credit for landing extremely large deals, achieving impressive goals, and generating company success. Invariably, the candidates who claimed the most credit for deals would have the most difficult time describing the details of how the deal was actually won and orchestrated. During reference checks, others involved in the deals would tell a much different story.

When I spoke to Mark, on the other hand, it was difficult to get him to discuss his personal accomplishments. In fact, some of the other interviewers felt that Mark was standoffish and even obnoxious in the way he bristled at certain questions. One interviewer complained: “Ben, I know that he increased the size of the Nike deal from $1M to $5M, because our contact at Nike told me that, but Mark wouldn’t go into any detail on it.” When I interviewed Mark, he really only wanted to discuss how his old company PTC won. He went into great detail about how his team diagnosed weaknesses vs. the competition and how he worked with the CTO Hugh Hempleman to advance the product. He then talked about how he worked with the CEO Dick Harrison to revise the way the sales force was trained and organized.

When the conversation turned to Opsware, Mark had already interviewed sales reps at our number one competitor’s company and knew what deals they were in. He relentlessly questioned me on how we were going to win the deals that they were in and how we planned to get into the deals that we weren’t in. He wanted to know the strengths and weaknesses of everyone else on the team. He wanted to know the game plan for winning. The topics of his potential compensation and career advancement didn’t come up until the very end of the process. And then he only wanted assurances that compensation was performance and not politically based. It was clear that Mark was all about the team.

During Mark’s tenure, sales increased more than tenfold and our market capitalization increased twentyfold. More to the point, voluntary attrition in the sales organization was extremely low, customers were managed fairly and honestly, and our legal and finance teams often commented that first and foremost, Mark protected the company.

Final Thought
While it may work to have individual employees who optimize for their own careers, counting on senior managers to do all the right things for all the wrong reasons is a dangerous idea.

BoomTown captured some bits and pieces of tasty video as I attended the Apple rollout of its newest device, the iPad, yesterday.

There are shots of the action in San Francisco outside and inside the launch hall and demo area (with key clips of CEO Steve Jobs during the event) showing off the hardware and software.

And, in a series of interviews, I mocked New York Times (NYT) tech legend John Markoff, got mocked by Apple (AAPL) PR gurus Katie Cotton and Steve Dowling, got gallant treatment from Gizmodo’s Brian Lam, got shut down by New York Times tech dude Brad Stone and got CNBC’s Jim Goldman–whom I did not ask for a date–to call the iPad “an XL version of the iPod touch.”

Or is it a Thneed–the innovative thing that everybody needs–from Dr. Seuss’s “The Lorax”?

Time will tell, but here’s the video to enjoy, plus one of the terrific “Everybody Needs a Thneed” song:

]]> http://allthingsd.com/20100128/scenes-from-the-apple-ipad-day-is-it-a-thneed-or-an-ipod-xl/feed/ 0 http://allthingsd.com/20081218/techcrunchs-yertle-the-turtle-tantrum-over-news-embargoes/ http://allthingsd.com/20081218/techcrunchs-yertle-the-turtle-tantrum-over-news-embargoes/#comments Thu, 18 Dec 2008 19:48:54 +0000 Kara Swisher http://kara.allthingsd.com/?p=7840

[UPDATE below.]

Yesterday, the one-man-band of a tech blogger, Michael Arrington, let loose with yet another outrageously indignant diatribe–this time that he and his TechCrunch site would forthwith break all news embargoes.

Not content with the traffic generated last week by his obviously faked Wrestlemania bout with French entrepreneur Loïc Le Meur about the lazy-lunching Europeans, he moved on to a more promising, but ultimately meaningless, riff on PR people versus journalists, over embargo-breaking.

It’s a sure-fire hit, given tech PR people and bloggers obsessively monitor Techmeme.

(What next for the Geraldo Rivera of investigative tech blogging? A withering prosecution of Yahoo CEO Jerry Yang in the HOV lane on Highway 101 in Sunnyvale without a hybrid? Quelle scandale!)

But BoomTown is not going to do a thumbsucker response to TechCrunch’s news embargo jihad, because, well, who really cares about the details of PR-media interaction anyway (except those who take themselves way too seriously)?

Here’s the essential 411 you’ll need to know: Some embargoes are good and some are bad and some are just–how can I phrase this correctly?–whatever.

And let’s be honest, pretty much everyone has broken an embargo, either by accident or on purpose.

But Arrington’s ire about this seems overwrought, and I suspect the true crankiness is natural product of the end cycle of dopey Web 2.0 “exclusives,” which TechCrunch has gotten in droves.

And all of it is increasingly less important as the economy withers and a lot of the less sustainable start-ups fade away. There are big important stories happening in tech right now about major public companies, the state of innovation and the future of the industry, which require more serious journalism.

So I think we can all imagine a day very soon when the Web 2.0 echo chamber dissipates–as it inevitably did in Web 1.0–and no one goes nuts if Start-up X adds a new embeddable widget, Start-up Y changes its homepage design or Start-up Z contemplates a new social-networking site for dogs to gain a new revenue stream.

And, in a less frothy landscape, the more important exclusives now go out to many. For example, consider yesterday’s story on LinkedIn’s changing of the guard, which went out to a dozen news outlets in advance rather than to just one like TechCrunch alone.

Of course, the true exclusives that a tech site gets through enterprise reporting take hard work and no handouts, which TechCrunch does legitimately get. Yesterday, in fact, TechCrunch’s Robin Wauters got a few really good ones about product units Yahoo is cutting.

But in this bruising contest, TechCrunch clearly does not dominate, based on its size, as it did with the easier press release exclusives. In the new environment, in fact, tiny little voices that are accurate and insightful have just as much impact.

So, my takeaway from Arrington’s rant could be boiled down to three words: “GIVE ME EXCLUSIVES!”

That verbal stamping of foot brought to my mind the loud declarations of Dr. Seuss’s “Yertle the Turtle.”

In the story, Yertle wants to be higher than anyone, so he forces the other turtles to pile up under him in an ever-unwieldy tower to rule over everyone and everything.

It ends badly, of course, when Yertle asks for too much:

But, as Yertle, the Turtle King, lifted his hand
And started to order and give the command,
That plain little turtle below in the stack,
That plain little turtle whose name was just Mack,
Decided he’d taken enough. And he had.
And that plain little lad got a bit mad.
And that plain little Mack did a plain little thing.
He burped!

And his burp shook the throne of the king!

And Yertle the Turtle, the king of the trees,
The king of the air and the birds and the bees,
The king of a house and a cow and a mule…
Well, that was the end of the Turtle King’s rule!
For Yertle, the King of all Sala-ma-Sond,
Fell off his high throne and fell Plunk! in the pond!
And today the great Yertle, that Marvelous he,
Is King of the Mud. That is all he can see.
And the turtles, of course…all the turtles are free
As turtles and, maybe, all creatures should be.”

We’re all in the mud now, TechCrunch. But come on in–the water’s just as fine.

[UPDATE: Now Arrington is going for the full cup full of crazy by attacking an admittedly obnoxious PR lady, getting all hot and bothered by spam she sends with the kind of indignation I like to reserve for the vile terrorists in Mumbai or wife beaters. Oh, dear. Then again, the rest of us can concentrate on real stories, while he busies himself huffing and puffing away on his anti-PR sousaphone.]

]]> http://allthingsd.com/20081218/techcrunchs-yertle-the-turtle-tantrum-over-news-embargoes/feed/ 19 http://allthingsd.com/20080116/waltgelina-at-macworld-part-2/ http://allthingsd.com/20080116/waltgelina-at-macworld-part-2/#comments Wed, 16 Jan 2008 10:49:21 +0000 Kara Swisher http://kara.allthingsd.com/20080116/waltgelina-at-macworld-part-2/ Here is the second video installment of Walt Mossberg visiting Macworld yesterday, trailed by the very brave Associate Editor John Sullivan of AllThingsD.com, who gamely borrowed BoomTown’s Flip video camera to take on the momentous task.

In this episode, Walt visits various partners of Apple’s, including Microsoft and, apparently, Dr. Seuss.

In the wise words of “One Fish Two Fish Red Fish Blue Fish”: “From there to here, and here to there, funny things are everywhere.”

So it seems to me, at least.

Here is the video:

[ See post to watch video ]

Here is Part 1 of Waltgelina at Macworld.

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