By
Patrick HogeSource: San Franscisco Business TimesIn four years, Michael Arrington has gone from knowing relatively little about the Internet or journalism to presiding over the hugely popular, influential and profitable Palo Alto-based
TechCrunch network of blogs.
Now, Arrington appears to be on the verge of entering the computer hardware business, promising big news this month about a product he has been developing with reader input called the “CrunchPad,” a touch-screen tablet designed for web surfing, video chat and light email use.
“We’re going to make some really big announcements,” said Arrington, who predicted a prototype would be ready for unveiling by the end of July. “We’re full on. These prototypes are real.”
Arrington started work on the Crunchpad after meeting an expert in electronics manufacturing in China, and these days he estimates the project commands three-quarters of his time.
“There’s factories that just churn stuff out. It’s pretty simple,” said Arrington, who has incorporated a separate company called
Crunchpad Inc. that has 14 employees in Singapore.
Whether selling the Crunchpad will be easy remains to be seen, but Arrington has already made it seem fairly straightforward to create a growing media empire.
Doubled revenue
Launched in June 2005, the “Crunch Network” includes the main TechCrunch blog, separate sites for coverage of technology in Europe, France and Japan, mobile technology, gadgets and technology used by large corporations and a database of companies to which users can contribute. Together they claim 5.5 million unique visitors and more than 15 million page views a month.
TechCrunch has quickly taken a place among the most visited technology-oriented web site, said Andrew Lipsman of web traffic measurement firm
ComScore. It’s one of only a few blogs with more than a million monthly visitors, he said, though ComScore’s numbers are about half what TechCrunch counts.
TechCrunch, which has 21 full-time employees and others working on contract, had revenue of about $3 million in 2007 and more than double that last year, Arrington said. This year looks like
it will be even better, though revenue growth has slowed, he said.
In addition to advertising, TechCrunch makes money off nearly monthly events that are well attended by Silicon Valley illuminati. The most profitable is the TechCrunch50, which last year featured some 250 startups and early-stage companies pitching to an audience of nearly 2,000, including venture capitalists and corporate buyers. This year’s event is scheduled for September.
TechCrunch has benefited from a tight relationship with entrepreneurs and financiers, and Arrington boasts of scoring some big news scoops, such as MySpace’s recent layoffs.
Arrington “understands the inner workings of Silicon Valley, and because he’s been around the valley so long, people trust him and trust his judgment,” said prolific angel investor Ron Conway, an early
Google backer and an adviser to TechCrunch. Conway said he wants to invest in the Crunchpad.
Despite such relationships, Marissa Mayer, vice president of search products and user experience at Google, said TechCrunch stays admirably focused on products and ideas, and not personalities. “Even here at Google, they don’t cut us any breaks. Every new product is a
completely new day with them,” she said.
Shedding conflicts
Arrington previously practiced corporate and securities law but became fascinated with startups while working at
Wilson Sonsini Goodrich & Rosati. In 2000, he co-founded Achex, an online payments company, which was acquired the following year by
First Data Corp. for $32 million. He also worked at a startup in London, founded and ran two companies in Canada, and was chief operating officer at RazorGator, a ticket reseller.
After taking time off, a friend suggested starting a company and, in an effort to educate himself about the Internet, Arrington started researching companies and posting his findings online in a blog. Entrepreneurs started coming to Arrington for coverage, and advertising produced enough money to hire employees who, like Arrington, worked out of his house in Atherton.
Arrington said he didn’t expect to become an online journalist when he started blogging. He continued investing “very small amounts” in startups, a practice he is discontinuing after criticism that it creates a conflict of interest.
It was only in March that TechCrunch moved into a regular office in Palo Alto after his Atherton neighbors complained and city officials told Arrington things had to change.
That was a welcome relief to Arrington, who had been living with employees — most young and not the most cleanly — in his house at all hours. “We had a team of housekeepers come in every day,” he said. “The only rule was ‘don’t go in my room.’”
