Most people don't realize this, but The New York Times is a big corporation like AOL (with sometimes similarish market caps).
- The New York Times has invested in technology companies like AdKeeper, Automattic, Ongo, Brightcove, Federated Media, and funds like Betaworks (which is in dozens of startups in all kinds of fields). Have their reporters ever received tips and information about upcoming companies and tech launches because of these connections? Do they get written about more often than your average startup? You better believe it. If you look through their coverage of these companies they imperfectly acknowledge their involvement (even the ones they've invested in directly).
These were just three examples I pulled quickly (I sincerely apologize for using these companies as examples since this has nothing to do with them). Do your own search for any New York Times invested or Betaworks company on nytimes.com and you'll see what I mean. Does this change their coverage of other competing tech companies?
- The New York Times has their own internal division that develops software products and services that other publishing companies and media companies buy. Does this change their coverage on competing technologies and competitors?
- The New York Times owns a diverse set of businesses in competition with Aol's current strategy including about.com. They also own a chunk of the Boston Red Sox.
I'm going to be blunt. I don't think the New York Times is shady enough to let this change their coverage despite their obvious conflicts of interest (in the BrightCove article in their 8 day later correction stresses that "The New York Times Company owns a small stake of less than five percent in Brightcove". I doubt Michael Arrington owns 5% of any startup he's written about). And since TechCrunch has had (if anything) a policy of more transparency and disclosure than the Times has had, I can't for the life of me see what all the ruckus is about.
My disclosure: I am tangentially connected to most of these companies by investment, friendship, or business relationships and I think the world of them. OwnLocal also works with all kinds of newspapers and publishers as a matter of course.
Counterpoint, the NY Times has an ethics policy that would never have allowed anything like TechCrunch (even before the newly announced investment fund plan!).
"44. Staff members may not engage in financial counseling (except through the articles they write). They may not manage money for others, offer investment advice, or help operate an investment company of any sort, with or without pay. They may, however, help family members with ordinary financial planning and serve as executors or administrators of estates of relatives and friends and as court-appointed conservators and guardians."
"They may not offer ideas or proposals to people who figure in their coverage or make investments in productions in their field. (Food writers and editors may not invest in restaurants.) "
Etc etc.
The New York Times company owns a lot of stuff. So does AOL. AOL running an investment fund isn't shady in the least. Having an employee who covers tech startups on one of your media properties run a fund for you that invests in tech startups... Big difference. You don't see whoever's job it is to invest in Automattic at the NY Times out there writing A1 on the technology page.
The main difference here is there is a strict firewall at the New York Times Company and not at TechCrunch. Forget disclosure, the NY Times would never let Mike have the startups beat in the first place because of his personal investment activity. Make that professional investment activity and it's just that much more unacceptable.
The New York Times already has a way around this through Op-Ed columnists. Thus, it's okay for someone like Warren Buffett, Robert Reich, or someone the Times hires on spec to completely ignore these policies. If TechCrunch were to adhere to the Times' standard, then Arrington might alternatively be either an Op-Ed columnist paid on spec for his pieces of writing, a reporter paid to do a job, or a staff editorial writer.
The reality is that this is a distinction without difference today (especially when editorial is mixed with reporting). Disclosure should be part of every article, op-ed, or editorial. As far as I'm concerned, TechCrunch is actually setting a more rigorous standard than the Times is for future media.
Opinion is different than news. Op-Ed columnists don't get the inside track on news that helps them make money and make money for others. Similarly, reporters stay off the opinion page. It's not just a matter of disclosing, the whole concept is against the policy of any reputable media organization (not that I'm of the opinion TechCrunch is, but that's what this is about).
The NYT doesn't let their reporters trade on companies they cover. Would it seem strange to you if a NYT reporter was hired to simultaneously manage a venture fund to invest in companies that are on his beat?
- The New York Times has invested in technology companies like AdKeeper, Automattic, Ongo, Brightcove, Federated Media, and funds like Betaworks (which is in dozens of startups in all kinds of fields). Have their reporters ever received tips and information about upcoming companies and tech launches because of these connections? Do they get written about more often than your average startup? You better believe it. If you look through their coverage of these companies they imperfectly acknowledge their involvement (even the ones they've invested in directly).
Federated Media (2 years after an investment by New York Times): http://www.nytimes.com/2007/06/30/technology/30online.html?s...
BrightCove article that was published without due diligence and later corrected eight days later: http://www.nytimes.com/2011/01/23/business/23corner.html?sq=...
GroupMe article where they mention that the company has taken $12 million but neglect to mention they were part of the round through Betaworks: http://bits.blogs.nytimes.com/2011/08/21/skype-plans-to-buy-...
These were just three examples I pulled quickly (I sincerely apologize for using these companies as examples since this has nothing to do with them). Do your own search for any New York Times invested or Betaworks company on nytimes.com and you'll see what I mean. Does this change their coverage of other competing tech companies?
Funnily enough, the best resource to follow these connections is Crunchbase: http://www.crunchbase.com/company/newyorktimes
- The New York Times has their own internal division that develops software products and services that other publishing companies and media companies buy. Does this change their coverage on competing technologies and competitors?
- The New York Times owns a diverse set of businesses in competition with Aol's current strategy including about.com. They also own a chunk of the Boston Red Sox.
I'm going to be blunt. I don't think the New York Times is shady enough to let this change their coverage despite their obvious conflicts of interest (in the BrightCove article in their 8 day later correction stresses that "The New York Times Company owns a small stake of less than five percent in Brightcove". I doubt Michael Arrington owns 5% of any startup he's written about). And since TechCrunch has had (if anything) a policy of more transparency and disclosure than the Times has had, I can't for the life of me see what all the ruckus is about.
My disclosure: I am tangentially connected to most of these companies by investment, friendship, or business relationships and I think the world of them. OwnLocal also works with all kinds of newspapers and publishers as a matter of course.