ith its newly announced purchase of leading technology blog TechCrunch, AOL has made its most aggressive move yet to attract users and advertisers. AOL CEO Tim Armstrong said the purchase would give AOL "a much larger tech presence" on the internet. The deal reportedly cost AOL between $25 million and $40 million, and includes incentives to keep TechCrunch founder and star Michael Arrington on board. Will AOL get its money's worth? (Watch Arrington explain why he sold TechCrunch)
This is a smart deal for AOL: Buying TechCrunch could "pay off" nicely for AOL, says Jessica Guynn in the Los Angeles Times. More than 9 million people read TechCrunch every month, and many of them are "venture capitalists, angel investors, technology executives, and other high-net-worth" people advertisers will pay big bucks to reach. That means AOL will be able to charge higher rates for its ads, and it should have no trouble recouping its investment.
"AOL is buying TechCrunch blog"
This isn't exactly an ideal match: TechCrunch is Michael Arrington, says Robert X. Cringely at InfoWorld. And Arrington built his site, which specializes in breaking news on tech acquisitions, by "publishing every rumor that crosses its transom, founded or otherwise." So he has "broken some major stories (like Google buying YouTube)," and spectacularly blown others ("like Google buying Digg"). Arrington insists he won't change the formula behind TechCrunch's success, but — let's face it — life is different inside a huge corporation like AOL.
"AOL swallows TechCrunch — but can they keep it down?"
AOL is on the right track: AOL has made an important realization, says Mashable founder and CEO Pete Cashmore at Unmashed. "Blogging creates real value. It makes an impact on people's lives." Purchasing TechCrunch will help AOL tap into that "untapped potential," and that makes this deal a "huge validation" for this industry. Blogs aren't just on their way to challenging mainstream media — they're becoming mainstream media.
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