I’m still digesting today’s somewhat surprising news that Michael Arrington has hired Heather Harde as CEO of the TechCrunch Network. For those who don’t know, Heather is currently in charge of Acquisitions and Mergers at Fox Interactive Media.
(Photo by Dave McClure)
So there’s a few things to think about here…
Firstly, I think most would agree it’s a bit of an exuberance of hire a CEO to run the affairs of a few blogs (albeit popular ones). Even if cash is abundant, and the rumors are true that advertising is $30k+ a pop per month on TechCrunch, it is still pretty extravagant.
It’s therefore pretty clear to me that Michael is clearly aiming even higher then now and has bought in the CEO to take the business to a significant new level.
The second aspect to consider is the choice of CEO. As a senior vice president at Fox Interactive Media charged with looking after $2B+ worth of budget for new acquisitions, Heather must be very well remunerated – and thus expensive to attract. With that in mind, one can only assume she has taken a percentage stake in TechCrunch she has become a significant share holder according to other TechCrunch shareholder Keith Teare.
For Heather to be interested in TechCrunch shares, Heather must be thinking the business is going somewhere (beyond blogging) and with her own business talents being bought on board, one can only assume it is. Leaving FIM (Fox Interactive Media) is a big step – even if the post-Ross Levinson days are not as rosy as before – and she certainly would have had plenty of offers and opportunities to do pretty much whatever she wanted.
Many are speculating that TechCrunch will expand its media empire, like Gawker Media and GigaOmniMedia, into new topic genres. However this still seems like relative peanuts for someone like Heather and so I think TechCrunch will be getting into the Venture Capital game. And if it’s not, it probably should.
Here’s a few reasons why I think this is the case:
- Venture Capital is about business intelligence as much anything. One can argue that Micheal Arrington has an eye for picking out future successful startups as that’s basically what he’s made his mark doing up till now (albeit writing about them). If I had a fund or money waiting to be invested, I can think of a lot worse places to put it than into Micheal Arrington’s hands to look after for me.
- Anyone looking to run a successful Venture Capital firm ultimately needs to make sure they’re able to make that return – and that basically means successfully flipping the companies one invests in. Micheal already helps raise the profile of start-ups which gets them noticed by A&M teams. But what better way of ensuring that each flipped company gets the best deal possible then by having an experienced poacher-turned-gamekeeper on your side looking after the specifics of each deal?
- Working on the assumption that everyone aspires to grow their business and make even more money, A VC direction is perhaps the only way to take TechCrunch to the next level in terms of size of the business and it’s returns. I can’t see Micheal having the time, patience or inclination to run a product-orientated start-up whereas VC’ing probably only adds a marginal overheads to the existing TC business.
- There’s nothing like giving out shit loads of someone else’s money to unremarkable companies to make you feel like maybe you’re the chump for not taking some of the money off the table for yourself. Maybe Heather aspires to getting some of the A&M capital that’s still around for herself?
With my ‘Media 2.0’ cap on, I think such a potential development would raise all sorts of editorial issues for the TC blog to think about – however Micheal Arrington has already shown that he does not consider TechCrunch to be ‘unbiased’ nor does he seem to be worried too much about editorial objectivity.
Tim O’Reilly, a book publisher but self-proclaimed ‘industry intelligence gatherer’, recently launched AlphaTech Ventures as his investment dept, and I don’t think he’ll be the last to get involved in this area.
Could Michael Arrington be about to throw his hat into the ring to join some pretty heavy hitters in the VC world?
And perhaps even more importantly, would you see Micheal on the board of your start-up as a help or a hindrance?