AOL Inc., which refers to America Online stated on Tuesday, that they are planning to buy TechCrunch to reinforce their online news coverage. With the influence of TechCrunch technology, AOL would be able to bolster their online news business.
According to the contract, which was signed in TechCrunch conference, AOL will be added to TechCrunch technology portfolio, which also contains gadget blog Engadget.
Though none of these companies have revealed the terms and conditions, it is assumed that the price would be more than $25 million, according to a person familiar of the deal who is not allowed to speak in public.
This purchase would be another achievement in AOL’s mission to revitalize its standards as a hub of online editorials.
According to the recommendations of Chief Executive of AOL, Tim Armstrong, hundreds of reporters were hired to cover the local news for the company’s Patch property, in order to promote the profits of online advertising.
After the AOL’s development from Time Warner in the preceding year, it focused its attention on ad-supported content and took it as their future. This new strategy is not involved with Google and it does not build any content of this site.
5min Media, a web video syndication company, which issues a library of video clips from 1,000 media companies to other websites, was purchased by AOL. Moreover, AOL could acquire Thing Labs Inc. that produces software to post online.
According to Mr. Armstrong, TechCrunch technology would be used by AOL as a pillar for their news coverage. And also, it would operate separately from Engadget. However, these two sites would be able to use some of the content from each other.
Michael Arrington, who is the pioneer of TechCrunch, said that the company earns $10 million annual revenue and $3.5 million profits. There are 3.8 million visitors per month and it is at the top of the most popular and mostly used technology news sites. Besides, AOL’s Engadget has 7.3 million users per month.
Further, Michael Arrington stated that AOL has pledged to “not to impose their bureaucracy” on TechCrunch and also that he would uphold the control of the editorial.
In addition, Mr. Arrington said that he wants to be with TechCrunch for years, if not for his entire life. This decision greatly motivated the staff of the website to stay with the site for years ahead.
He also said that TechCrunch has been courted by Yahoo and CNet, which is owned by CBS.