It has been a very long week for AOL. And it's about to get even longer.
Last Thursday, word leaked that one of its employees, TechCrunch founder Michael Arrington, was launching a venture capital fund that would include an $8 million commitment from AOL (AOL). Then came a more official versionvia the NY Times, which included positive quotes from both Arrington and AOL chief executive Tim Armstrong.
Shortly thereafter, however, a company spokesman -- apparently acting at the behest of AOL editorial boss Arianna Huffington -- said that Arrington had been fired. Another company spokeswoman clarified, saying that he was still in the employ of AOL, but in a non-editorial role that would prohibit Arrington from sourcing investment opportunities via TechCrunch.
Arrington mostly stayed out of the public fray until yesterday when he demanded that TechCrunch either be given full editorial independence or sold back to Arrington and other legacy shareholders (AOL had purchased the site last year).
But AOL is not giving TechCrunch its editorial independence. And it is not selling it back to Arrington.
Instead, Fortune has learned that AOL executives have decided to terminate Arrington. It is unclear how this will officially occur. Maybe a pink slip. Maybe Arrington submits a (public?) letter of resignation. Maybe Tim Armstrong simply gives Arrington a phone call, and he quickly dashes off a note to TechCrunch employees on his iPad.
In other words, the ending has been written but much of the final chapter remains blank. This includes the fate of CrunchFund, which still includes that pesky AOL commitment (which it technically could default on, but that would lead to all sorts of other problems).
It also is important to note that while I'm led to believe this decision is final, AOL has been so scattershot during this past week that any sort of reversal would not shock me (particularly since Arrington likely will be asking for the world, while Huffington will want to offer him a bowl of dust).
Earlier today, I wrote that the biggest loser in this affair was Arianna Huffington. But perhaps I judged too early. Huffington clearly erred here in okaying a project without fully understanding its public relations consequences, and then quickly backtracking without admitting to having done so. But, at the same time, Huffington now appears to be more influential at AOL than the company's CEO (both of them were aware of CrunchFund, but Armstrong was far more involved in its formation). And then there is Arrington, who has lost both his job and (likely) his TechCrunch platform. Oh, and AOL has a mess on its hands deciding if Arrington should or shouldn't participate in next week's TechCrunch Disrupt conference (assuming he's even willing to attend).
I reached out to both Arrington and an AOL spokeswoman for comment, but did not hear back from either of them.
COMMENTARY: I'm a big fan of TechCrunch, use the tech blogging service regularly, but back on September 30, 2011, when I learned that AOL had acquired TechCrunch, was a bit dumbfounded as to how it all came down. I was writing about some startup trends uncovered by TechCrunch Disrupt, but discovered that the AOL/TechCrunch deal was done live at Disrupt, so I added this development to a another blog post dated October 10, 2010. Here'as the video of that "happy" event.
It's my understanding that Arrington is not happy having to clear all editorial content for TechCrunch through Ariana Huffington, who is AOL editorial boss. I don't know the terms of the acquisition agreement or employment contract between AOL and TechCrunch/Arrington, but it is obvious that Arrington is not happy losing his editorial independence, and there maybe a personality rift as well.
The AOL/TechCrunch acquisition is another great example of a power struggle between two strong personalities. Arianna Huffington calls the shots on TechCrunch's editorial content. Michael Arrington says otherwise.
I think that as a TechCrunch fan, that it's only appropriate that Michael Arrington and Arianna Huffington should duke it out. The whole thing should be refereed by Tim Armstrong. Let's fly in Michael Buffer from Vegas. I want to hear, "Let's get ready to rummmblllll." or "Two men enter, one man leaves." My money is on Arianna Huffington. She can hold her own with anybody, if you've seen her guest appearances on Bill Maher, CNN, MSNBC, and Fox. Besides Michael Arrington is a real blowhard.
THEN:
TODAY:
Courtesy of an article dated September 7, 2011 appearing in CNN Money
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