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University of Wisconsin–Madison

Why transparency is not enough: The Case of Mr. Mike

Are bloggers journalists?  Can insiders also be outsiders?  Does full disclosure mitigate conflict of interest?

These are questions that have long occupied the attention of reporters, editors and those interested in issues of journalism ethics.  But rarely do you find all these contentious questions raised in a single case.   That is precisely what is happening in the current controversy surrounding a prominent tech blogger, his influential blog, and the media giant AOL.  At stake is whether the definitions of journalist and journalistic ethics need to be re-considered in the digital age.

photo of Michael Arrington

Photo by Anuj Biyani via CreativeCommons

Meet Mr. Mike

At the centre of the current storm is Mike Arrington, a 41-year-old Silicon Valley lawyer and entrepreneur.  Six years ago, he started a blog called TechCrunch that quickly became a must-read for gadget freaks, venture capitalists, technology entrepreneurs, and journalists who wanted to know what was really going on inside one of the world’s most dynamic and fastest growing industries.

Mike Arrington was the ultimate insider.  He seemed to know everyone and everything in the Valley, and being the publisher of TechCrunch cemented his status as a major power broker.  He could tell you where the skeletons were buried, who was on the rise, who was on the downward slide, and who was being pursued by whom.  A story in TechCrunch could mean the difference between success and failure for a start-up looking for investors, or a company launching a new product.

Arrington’s status as a Valley insider is what drew many readers to Tech Crunch, but it also led to questions about how he got his information, and how he wielded his power.  Journalists are encouraged to get close to the people they are covering, but not so close that they develop a rooting interest in the story.

Prohibitions against even the appearance of conflicts of interest are staples of mainstream journalism codes of ethics.  The New York Times’ code, for example, declares that “no staff member may own stock or have any other financial interest, including a board membership, in a company, enterprise or industry about which she or he regularly furnishes, prepares or supervises coverage.”

“A new kind of publication”

But Mike Arrington played by a different set of rules.  He wrote about companies that were paying him as a consultant, and some that he had actually invested in.  He had a disclosure page on TechCrunch that listed his various connections and investments, but for many people, that wasn’t good enough.  Critics, including some publishers of rival tech blogs, accused him of massive conflicts of interest, using TechCrunch to further his own business and investments.

But Mike Arrington didn’t care.  Never one to choose the velvet glove over the iron fist, he addressed his detractors in a blistering blog post written just five months after the launch of TechCrunch. Arrington declared that his blog was “a new kind of publication.”

We don’t fit into a neat little box like traditional media, who refrain from financial conflicts of interest with their readers and feel that they are therefore above reproach…. TechCrunch is different. TechCrunch is all about insider information and conflicts of interest. The only way I get access to the information I do is because these entrepreneurs and venture capitalists are my friends . . .

I am an active investor, board member and advisory board member with a number of startups. That isn’t going to change. I also write about startups. That isn’t going to change, either. Obviously people like what we write on TechCrunch or they wouldn’t come back. But no one should think TechCrunch is objective or conflict-free. We aren’t. We never have been. We never will be.  All I promise is to give my honest opinion every time I write, regardless of whether there is a conflict of interest or not.”

“The Rules Apply to Everyone”

Not surprisingly, the critics weren’t satisfied, and in March 2009 Arrington was forced to reverse course.  In a blog post titled “The Rules Apply to Everyone,” Arrington conceded that even though he had been transparent about investments in companies he wrote about, the appearance of conflicts of interest was “a weak point that competitors and disgruntled entrepreneurs use to attack our credibility.”   And so Mike Arrington announced he would be divesting himself of all financial stakes in technology companies, and would not be making any further investments.

 

But in September 2010, Arrington sold TechCrunch to AOL for a reported $25-$30 million. He would stay on as publisher, but what would he do with all that money?  The logical thing would be to go back to doing what he did best; investing in technology companies.  But there was that small matter of the no-investment policy that he had declared with such righteous fanfare just two years earlier.  It was time for another flip-flop.

The new rules

This spring, word began to spread around Silicon Valley that Mike Arrington was back in business, having invested in a couple of new start-ups.  In a TechCrunch post written in April, Arrington acknowledged his investments, and announced that the 2009 policy “has now changed.”  He would once again be putting money into companies he was writing about, but he would be “up front about all these investments and disclose it in posts.”

“That will mean that there will be financial conflicts of interests in a lot of my stories. Either because I write about those companies, or write about a competitor, or don’t write about a competitor . . . I think that this will all be fine,” Arrington concluded. But he knew that it probably wouldn’t be.

“Other tech press will make hay out of this because they don’t like the fact that we are, simply, a lot better than them. That’s fine, but when you read their coverage remember that they’re our direct competitors, even though they won’t “disclose” that particular conflict of interest. Luckily they don’t get to make the rules we operate under. We do, and you, as readers, can choose to accept those rules and read, or not and leave.”

Predictably, Arrington’s latest reversal was not well received by his critics in the tech press.  “Straight outrage” was how one rival blogger described his reaction to Arrington’s post.  “Someone should kick Michael Arrington’s arrogant ass,” suggested another. “Way I see it, Michael wants to have his cake and eat it, too. Fine, then open and run a TechCrunch public relations agency, Mr. Arrington. But don’t pretend that eating and sleeping where you crap is healthy living.”

cake marked "TC/AOL" with a heart and smiley face

Photo by TechCrunch via Creative Commons

The AOL factor

Complicating the issue for Mike Arrington was the fact that unlike 2006 and 2009, this time, he no longer owned TechCrunch. Someone else was now writing the policy book, and his new bosses were on a mission of their own.  In February, AOL had bought the Huffington Post for more than $300 million. Its founder, Arianna Huffington, was charged with the task of turning AOL into a serious digital media company that could rival the New York Times and other mainstream giants.  And serious media companies have ethics policies that they work hard to enforce.

In April, Huffington had sent a message to other AOL journalists by firing Patricia Chiu, the editor-in-chief of Moviefone, an AOL-owned blog about the film industry.  Among Chiu’s sins was writing to a TechCrunch reporter asking her to tone down her snarky comments about a movie promotion.  “We work with movie studios every day”, Chiu wrote in an e-mail that provoked universal ridicule in the blogosphere, “and it is in our best interests to stay on good terms with them.”

As for conflicts of interest, the AOL policy was quite clear, and echoed the policies at the New York Times and elsewhere.  Editors, writers, and reporters were not allowed to have financial interests in companies or industries that they regularly covered.

So what to do about Mike Arrington?  This would be a major test of the new AOL’s commitment to journalistic respectability.

“Michael Arrington operates from a unique position,” the company declared in a statement on April 28.  “He was an investor in technology companies and start-ups before he started TechCrunch, and his extensive knowledge of, and involvement with Silicon Valley is one of the very things that has made TechCrunch a must-read site.  TechCrunch is committed to transparency.  Michael Arrington 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.”

It was a novel approach to ethics.  Yes, we have a very strict policy when it comes to conflict of interest, but it doesn’t apply to everyone.  The problem is that ethics applied selectively is really not ethics at all.  Even Arianna Huffington acknowledged “it was an awkward resolution at best.”

Still, the Mike Arrington saga raises several important questions that journalists everywhere need to consider.

Who’s a journalist?

Is Mike Arrington a journalist?  He’d prefer you didn’t call him that.  He has too little regard for journalists to want to be a member of that club.   In a conversation with blogger and journalism professor Jeff Jarvis at a TechCrunch conference in New York in May, Arrington described journalism as “a priesthood in that priests are the only ones that can talk to God, and you’re not allowed to read the Bible and etc. etc.  That’s ridiculous.  Anybody that wants to become a blogger can become a blogger and report news.”

And reporting news is precisely what Arrington does on TechCrunch.  The important point is not what Arrington chooses to call himself.  What he does is journalism. But can journalism exist in the kind of ethical vacuum that Arrington and AOL appear to be creating?

Mike Arrington thinks it can, because he believes it already does.  “There’s no such thing as an unbiased piece of reporting,” he told Jarvis.  “When I think of journalism, I truly think of people who are very very biased hiding their bias behind theoretically objective text.”  The only difference between them and him, Arrington believes, is that he is open about his biases and discloses his conflicts, and they don’t.

Concentric circles

Mike Arrington is partly right. Silicon Valley is a like a small town where everyone knows everyone else, and there are lots of overlapping concentric circles.  Arrington is hardly the only tech writer to have conflict of interest issues.  Many bloggers also do consulting work for technology companies.  It is a place full of insiders, and disclosure rules are not always consistently applied, both in the blogosphere, and the mainstream press.

One of Arrington’s most vocal critics, Kara Swisher, who writes the highly regarded All Things Digital column for The Wall Street Journal, is married to Megan Smith, a Google vice-president.  Swisher regularly writes about Google and its competitors.  In accordance with Dow Jones’ ethics policy, Swisher has written about her relationship with Smith, even going so far as to declare “I garner exactly no financial benefits from my relationship with Megan.”

Mike Arrington thinks that’s not good enough.   He believes that when it comes to potential conflict of interest, there’s no difference between someone who invests in a company, and someone who is in a relationship with an employee of a company.

“I think someone will think twice before slamming a company and then going to sleep next to an employee of that company”.  Arrington wrote in a recent blog post with the typically provocative title “The Tech Press: Screw Them All.” “Certain adjectives, for example, might be softened in the hopes of marital harmony.”

Or take the case of David Pogue, the influential technology columnist for the New York Times.  In 2009, he was criticized for not disclosing the fact that he was being paid to write tech manuals for products he was also reviewing in the newspaper.  Pogue’s response was to declare he was not a journalist, but an opinion columnist who tries to “entertain and inform.”

Now, Pogue finds himself in another sticky ethical dilemma.  He is currently dating Nicki Dugan, a vice-president at a San Francisco PR firm whose client list includes leading tech companies such as Amazon, Facebook, Cisco, Netflix and Yahoo.  Pogue writes about all these companies, but has never disclosed these potential conflicts to his readers.  The relationship only became public when Dugan announced it on her Facebook page in April.

The Times ethics policy acknowledges that “romantic involvement with a news source would create the appearance and probably the reality of partiality”.  It requires that the relationship be disclosed to the appropriate editor (which Pogue did last December), but leaves it up to the editor to determine if public disclosure was warranted.  In this case, the editor decided it was not.

But even if Pogue had gone public about his relationship, is disclosure enough to make the problem of bias go away?  Mike Arrington, Jeff Jarvis and many others in the blogosphere clearly believe it is.  Their mantra, first coined by technology writer David Weinberger in 2009, is that “transparency is the new objectivity.”

Neutrality as the new objectivity

But there are two big problems with this.  The first is that even Arrington admits that he can never be fully transparent about everything.  “If I’m transparent as to who my sources are on a story, I’d lose my sources,” he told Jeff Jarvis. “If I have buddies out there that help me with my stories, I never disclose that.”

The second problem with transparency is that it can erode credibility.  As a reader, I’d rather know about a writer’s potential conflicts of interest than not know, but knowing may not make me feel any more comfortable about how those conflicts might be influencing what I’m reading.  Better to have an open agenda than a hidden one, but having no agenda at all would be better.  Maybe neutrality, not transparency, should be the new objectivity.

Granted, complete neutrality is often not easy to achieve, and it’s not for everyone.  If you’re looking to invest in a tech start-up, Mike Arrington’s insider perspective is likely precisely what you need to be better informed.

By definition, insiders in any field are bound to be better informed than outsiders.  Just ask anyone who’s gone from covering an industry as a journalist to representing it as a PR person. They’ll likely tell you that the view from the inside is much different than it appears on the outside.  But it remains just one perspective on the story, and audiences have a right to expect a journalist to pursue every angle with an equal commitment to uncovering and reporting all the relevant facts.

Entrepreneurial journalist or journalist as entrepreneur

In their conversation at the TechCrunch conference in May, Jeff Jarvis told Mike Arrington that he saw him as a role model for a new wave of entrepreneurial journalists who will help save the industry.

Jarvis believes that the old ad-supported business model of the big media companies cannot survive in the digital age, especially in newspapers.  So journalists will need to build their personal brands and become more entrepreneurial.

But there is a difference between an entrepreneurial journalist, and an entrepreneur doing journalism.  In the first case, entrepreneurship is in the service of journalism.  In the second, journalism takes a back seat to the demands of business.

And no amount of selective transparency, or protestations that “I’m not a journalist”, can mitigate the fact that this does a disservice to the audience, most of whom don’t have the time, the skills, or the inclination to sift through pages of disclosure information to determine where a writer’s conflict of interests may lie.

There is clearly a place for insiders like Mike Arrington in the journalistic landscape.  They provide a valuable service that meets the needs of many readers.  And we should all be grateful for the important issues about journalistic bias that he has been raising.

But codes of ethics in journalism ultimately exist to protect readers, viewers and listeners from people who use their journalism to further their own agendas.

Mike Arrington as a role model for journalism’s future?  Let’s hope not.

__________

photo of Ira Basen

Ira Basen

Ira Basen began his career at CBC Radio in 1984. He was senior producer at Sunday Morning and Quirks and Quarks. He has been involved in the creation of three network programs; The Inside Track (1985), This Morning (1997), and Workology (2001), as well as several special series, including Spin Cycles, an award winning six part look at PR and the media,  News 2.0, a two part exploration of news in the age of social media, and Engineering Search: the story of the algorithm that changed the world.

Ira has written for The Globe and Mail, The Walrus, Maisonneuve, and the Canadian Journal of Communication.  He writes a column on media for cbc.ca, and is a contributing editor at J.Source.ca.

Ira is currently teaching at Ryerson University and the DeGroote School of Business at McMaster University. He is the co-author of the Canadian edition of The Book of Lists (Knopf Canada, 2005).

 

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