Added Blows: AOL's 'TechCrunch' Loses CEO, Top Staff

Raising more questions about AOL’s acquisition strategy -- and overall health -- the exodus at TechCrunch continues.

The tech blog, which AOL bought late last year for about $30 million, has officially lost Senior Editor Sarah Lacy, and has reportedly shed CEO Heather Harde.

TechCrunch has already parted with several editors, including MG Siegler, in the wake of AOL’s decision to terminate its relationship with TechCrunch founder Michael Arrington in September -- even though it remains an investor in his VC fund, CrunchFund. Siegler left to become a venture capitalist with CrunchFund. Earlier, TechCrunch writer Paul Carr quit to start a new company, which CrunchFund is partially backing.

Still, “This isn’t a knee-jerk reaction out of loyalty for my friend [Michael Arrington], nor is it about making a big ‘F-you, AOL!’ statement,” Lacy said in a blog post on Friday.

What is Lacy’s departure about? Essentially, her contention that “all hell broke loose” in September -- which has left the site’s staff in disarray.

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“You could produce a Lifetime movie of the week about the behind-the-scenes drama of the last few months,” Lacy explained. “Publicly, I’ve stayed silent during much of it, but it has been every bit as gut wrenching for me as it’s been for my colleagues.”

Regarding the news of Harde’s exit -- first reported by Business Insider on Thursday -- Lacy called it “potential,” and the reports “unconfirmed.”

Either way, this all comes at a difficult time for AOL, as it struggles with a difficult ad market and new threats from Facebook and Google, as well as its own senior level departures. 

Brad Garlinghouse, president of AOL’s applications and commerce group, and head of its Silicon Valley operations, confirmed reports that he was leaving the company on Thursday.

"Hard decision as I'm leaving a bunch of awesome people -- working on some very good stuff -- but decided it was time," Garlinghouse explains in an email to the Los Angeles Times.

Despite several press requests, AOL had no comment regarding the confirmed exits of Garlinghouse or Lacy -- or Harde’s reported departure -- on Friday.

Bigger picture: AOL’s future remains highly uncertain.

In September, AOL head Tim Armstrong confirmed retaining two big M&A specialists -- investment banker Allen & Co, and law firm Wachtell, Lipton, Rosen & Katz -- but said there were currently no deals on the table. He says AOL's strategy has not changed. 

Traffic to AOL sites rose just 3% in June, according to comScore, with only modest increases to its newer properties, including the Huffington Post, which recently set AOL back $315 million, and local Patch sites.

Patch -- arguably Armstrong's biggest long-term gamble -- is presently spending about $160 million a year on the local media network, which equates to about $150,000 to run each individual Patch site annually, according to analysts.

Putting added pressure on Armstrong, home-page display ad trends at AOL remained "sluggish" through the first half of the third quarter, according to a new report from Macquarie Securities.

Earlier this month, however, AOL reported an 8% jump in third-quarter ad sales, which it attributed to a dual strategy of third-party network sales and enhanced premium display ad sales related to its so-called “Project Devil” initiative.

While the ad revenue surge came amid a third-quarter earnings release showing a 6% decline in AOL’s total revenues, the drop was mostly attributed to non-advertising sales-related areas, and its Web access subscriptions business in particular.

1 comment about "Added Blows: AOL's 'TechCrunch' Loses CEO, Top Staff".
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  1. Thomas Siebert from BENEVOLENT PROPAGANDA, November 21, 2011 at 9:27 a.m.

    Good story, fascinating to watch this thing implode publicly like this. While "TechCrunch" may be the sexier story with all the outsized personalities clashing, it's going to be the failure of "Patch" that proves the bigger anchor for AOL, I bet.

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