AOL Buys TechCrunch

Published by: Todd on 29th Sep 2010 | View all blogs by Todd

AOL Buys Technology Blog Site TechCrunch

AOL Inc. acquires technology blog site TechCrunch for a reported $25 million in an attempt to reaquire 'clout' by buying "brands" CEO Tim Armstrong tells Bloomberg. AOL is considered one of the 'grand-daddies' of the early internet service providers and spin-off of Time Warner Inc.

AOL:US who has steadily watched its customer base dwindle was traded at a steady rate and climbed $1.11 to close at $25.26 for Wednesday. AOL is up 8 and a half percent this year and investors are noticing the offensive moves.

Armstrong has appeared at an industry conference in San Francisco to discuss some of the details and reasons for acquiring a total of three companies this week. In addition to TechCrunch, AOL also bought 5min Media and Thing Labs Inc.

5min Media is a video content farm, and Thing Labs develops tools for social networking.

Since taking over AOL, Armstrong has sold the social network Bebo and ICQ. He has attempted to redirect the company into the tech profit margin by also buying up Patch local news network, earlier this year.

"Tim Armstrong and his new team are making decisions to shape the next generation of AOL in content and social media, and it bodes well for the company," said Ron Conway, who founded venture fund SV Angel, to Bloomberg.

AOL is building a branded technology network by acquiring two of the top three technology blog sites. Engadget which had over seven million unique visitors in August as tracked by ComScore Inc., and TechCrunch with 3.8 million unique visitors are number one and three respectively. Second is Gizmodo bypassing TechCrunch with six and half million unique visitors last month. That is 63% of the tech-blog market overall by the AOL Technology Network.

The San Francisco based TechCrunch was founded by Michael Arrington in 2005 and now has over 40 employees. TechCrunch also hosts conferences and is currently hosting TechCrunch Disrupt in San Francisco.

Arrington's take on the matter, "It was time for us either to start investing a lot more money in things like technology and marketing - which probably meant raising a venture round - or to simply sell and partner with somebody who could do that. AOL has a very robust, large blog network that shows they have the software side nailed. So it solves a real problem for us from the technology side."

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