If you were wondering what that rumbling, thunderous sound is, it could be the mighty TechCrunch empire finally crashing to the ground after a company funded by Mike Arrington won TechCrunch Disrupt and in-fighting continued among the blog's staff.
Last night the TechCrunch Disrupt conference climaxed with the announcement of the winning startup, the company who'd convinced a panel of five TechCrunch Disrupt judges – and Michael Arrington – that it was the most deserving winner among 31 promising but as-yet-unlaunched startups.
For background, Mike Arrington has been removed as editor of TechCrunch, the tech blog he founded, after a well-documented spat with the site's owners AOL. Head of content Arianna Huffington and chief executive Tim Armstrong finally terminated Arrington after a controversy around whether he could ethically be the editor of an influential tech site and head up an investment fund for those same startups.
There was some speculation that Arrington might not appear at Disrupt, the conference and startup contest started in 2007; he might graciously shun the limelight and avoid any awkward questions about Crunchgate. Not so – Arrington opened the conference by talking about the spat and saying he wanted the focus to remain on the startups taking the stage.
So who won the startup battlefield contest? Of seven finalists, overall winner was an Israeli Second Life-meets-social network called Shaker, with Prism Skylabs and Bitcasa runners-up. And guess who's an investor in Prism Skylabs and Bitcasa, and a "pending investor" in Shaker? None other than Michael Arrington.
Arrington's defence throughout the Crunchgate controversy has been that users would trust him to be transparent and disclose any conflict of interest. Consequently the TechCrunch post announcing the winner (even though Arrington isn't at TechCrunch any more... yet is still at Disrupt?!) includes the disclosure than Arrington is an investor. But is that enough?
TechCrunch writers Paul Carr and Sarah Lacy were tweeting the downfall, Carr describing newly promoted editor Erick Schonfeld on stage as zapping Carr's "own already limited stocks of charisma".
@sarahcuda: "Someone please tell me what the hell Shaker is disrupting?"
@sarahcuda: "Can't believe Shaker won. Now I might quit."
@paulcarr: "Erick wrote that Mike had no input in selecting the final companies. That was untrue. See Mike's comment.... And so the new culture of honesty and transparency begins."
(Arrington had explained that he'd talked for over an hour about the finalists, and concluded by saying that he might not disclose investments to TechCrunch in the future. Which could get even more complicated.)
Photo by TechCrunch on Flickr. Some rights reserved
What did TechCrunch readers make of all this? There had been a first wave of objection when TechCrunch ran a glowing review of CrunchFund-funded Bitcasa before the winners were announced. "Reads like ad copy, then comes the disclaimer," tweeted Valleywag's Ryan Tate, though writer Sarah Perez claimed she didn't know about the investment when she did the interview.
Reader opinion on Shaker was decidedly split. Though there was lots of support for an Israeli success, several commenters dismissed it as Habbo Hotel for Facebook and said a virtual bar just isn't a disruptive idea.
The whole episode marks a giant loss in credibility for TechCrunch, a mangled, undignified departure, unprofessional personal scraps between colleagues and a decidedly fetid atmosphere around what has generally been a vibrant, inspiring and powerful brand. Ultimately, whatever the future of the writers and investors involved, this is a real shame for the entrepreneurs who've worked extremely hard to get this far.
Finalists who aren't apparently funded by CrunchFund, for the record, are healthcare-management tool Cake Health, local food finder Farmigo, business response service TalkTo and project organisation tool Trello.