Mr. Karp's Tumblr avatar (mashable.com)

In a casual tweet to their 237,000+ followers, Tumblr announced yesterday morning that as of Monday night, the microblogging service crossed the 20 billionth post mark. They apparently "forgot to make a big deal of this earlier," as they were probably too busy adding more jokes to their Terms of Service.

Tumblr has seen exponential growth since its inception in 2007. The service has blossomed from an insidery Blogger alternative populated primarily by Manhattan's media elite, to a blogging behemoth overflowing with angsty tweens, professional corporations and even celebrities in less than five years. Tumblr has also been a magnet for controversy, embroiled in lengthy policy debates over the many pornography and self-harm blogs hosted on its platform.

"The average Tumblr user creates 14 original posts each month, and reblogs 3," reads Tumblr's About page. "Half of those posts are photos. The rest are split between text, links, quotes, music, and video."

But perhaps in a nod to its hipster roots, the service appeared to take their 20 billion posts milestone in stride. No animated .gif streamers rained down from the address bar on their About page; no self-congratulatory Tumblr post celebrating their ingenuity was reblogged thousands of times. They stayed cool, they stayed casual, with just one understated tweet: 20 billion posts, everyone. No pom-poms required.

Mr. Shron

Before the meetup, students downloaded a 1.4 GB raw data set—or three million

lines of code—from 311, New York City’s information and services hotline. From there, Mr. Shron spent two hours leading students through a series of commands in the terminal program to turn what was an intimidating and unmanageable amount of unusable statistics into a revealing picture about the number and different types of complaints 311 receives from New Yorkers. 

It's starting to make sense...

Betabeat confesses that most of Mr. Shron’s presentation was way over our heads, and several students had to help get Betabeat back on track on more than one occasion. While Mr. Shron’s work is essential to OkCupid’s operations—“someone might want to know... how many lesbians there are in Topeka or something”—the only visible way users are able to see what he does is through the popular OkTrends blog that Mr. Shron helps co-founder Christian Rudder write. “Christian and I sit down and hash out how we can [realize] his vision,” Mr. Shron said. “We try to find what some basic ideas are and then I go ahead and try to reduce it down into something that’s useful for him and then he goes ahead and puts it together and writes something great out of it.” But that hasn’t happened since April when OkTrends published “10 Charts About Sex”— over nine months ago. The OkTrends blog has been inactive for nearly as long as Betabeat's LiveJournal. We pressed Mr. Shron as to when we could expect something new from OkTrends, but he wasn’t budging. "We’re working on it,” Mr. Shron said. “I can tell you that we’ve got a couple things in the pipeline, hoping to get some stuff out soon. But it’s just been a busy time at OkCupid. I’m just really happy with the success of the blog... Both of our goals is to produce something great that helps people." That and the data analysis. Mr. Shron said despite the fact that OkTrends is so popular it's not about the notoriety or exposure for him. He just loves the work. "There’s really not a lot of personal motivation in it. I know the blog is popular, but I think about it as just something I do that people happen to know about." When Mr. Shron is not working on the blog, he works on longer-term statistical and business projects, answering internal questions to calibrate the website’s functionality and creating and maintaining tools that allow him to answer those questions more easily. Mr. Shron, who used to do freelance data analysis for professors and journalists in Chicago, has been at OkCupid for about a year and a half. “I had a bunch of friends send me the job link for the OkCupid blog and I was like, ‘Oh, sounds like a good match, and they liked me,’” Mr. Shron said. “I’ve had to develop tools for dealing with the quantity of data we’ve got. It’s nice to work on things for long periods of time. Previous things I’d worked on had been maybe a couple weeks at most... it’s nice to draw those things out.” But this hiatus on blog posts has been drawn out enough. Give us something new for our chart hungry brains to snack on.

Image via BacktoGeek

Has Blogging Become the New Insider Trading?

“People think there is a distinction between how an major investor can talk about a public company versus a private company,” said Ralph Ferrara, former General Counsel for the SEC. “But if you read the law carefully, you see that everything that you can do wrong when combining a public company with the media applies to investments in private companies as well.”

Michael Arrington wanted to have it all. The editor-in-chief of TechCrunch, the nation’s most powerful tech blog, had, except for a brief hiatus, invested his own money in the companies he covered. The move always prompted a bit of grumbling in the blogosphere, but nothing he couldn't handle.

Then Mr. Arrington decided to go bigger. He tapped Silicon Valley’s royalty to raise a $10 million pool he dubbed CrunchFund.

According to sources familiar with the fund, it was only after these commitments were made that Mr. Arrington approached his corporate overlords at AOL to inform them of his plans. Initially upper management was nervous about the potential conflict of interest. Mr. Arrington was, after all, running the crown jewel of AOL’s new journalistic empire. “He explained to them that this was nothing unusual, and pointed out that Om Malik works for True Ventures and runs GigaOm,” the source said.

The answer seemed to satisfy AOL, which gave Mr. Arrington its blessing...and an additional $10 million in corporate cash to invest. When CrunchFund became public just before Labor Day, however, the result was a media firestorm. Mr. Arrington was fired (twice) and quit (once), before eventually parting ways with TechCrunch on an amicable note. It all made for great theater—but it also signaled that something significant was happening. The increasingly incestuous relationship between investors in private technology companies and the new media publishers who cover them had become to big to ignore.

Anyone watching the industry closely could see this conflict coming. TechCrunch, GigaOm, Business Insider and yes, Betabeat, are all backed to some extent by venture funds or individuals who also invest in the companies the blogs cover (BetaBeat is owned in part by Josh Kushner of Thrive Capital). All maintain rules about disclosure when writing about companies their own backers fund, but no marriage of media and money is ever completely cut-and- dry.

In January, for example, Reid Hoffman of Greylock Parnters, which invested in Mr. Arrington’s new CrunchFund, took advantage of Mr. Arrington’s soap box with a long “guest post” for TechCrunch explaining why his firm had chosen to invest in the controversial daily deal giant Groupon.

“It takes a lot of conviction in the future of a business to pull out your checkbook when the pre-money valuation has this many zeroes,” intoned Mr. Hoffman, laying out his justification for TechCrunch readers, as well as, no doubt, the powerful limited partners who back Greylock.

Investors like Greylock typically have access to a company’s financials before committing to new funding. But there was little mention of accounting in this post. Instead Mr. Hoffman cited Groupon’s smart use of data and its sense of humor as the basis for his confidence that the company would emerge as the leader in capturing the $100 billion local advertising market. Less than five months after his post, Groupon filed for an IPO.

There was no mention in Mr. Hoffman’s item of the fact that Groupon was bleeding red ink—losing, depending on who’s accounting you prefer, anywhere between $100 and $400 million last year. He did note Groupon’s staggering growth, but neglected to touch on the corresponding explosion in hiring the company oversaw. Last week Groupon’s sales force filed a class action lawsuit alleging the company had failed to pay them millions in overtime. On the website Glass Door, a forum that allows workers to comment anonymously about their employers, members of the sales force described a boiler room atmosphere were employees were afraid to take bathroom breaks and cried at their desks.

What is Mr. Hoffman’s responsibility, if any, to investors who may decide to put money into Groupon based on his post? The conventional wisdom holds that rules governing how investors can use the media vary depending on whether a company is private or public. In the latter instance, the SEC has strict guidelines governing how the financial health of a company is represented to the public by insiders.

But the landscape is evolving rapidly. The emergence of robust secondary markets like SharePost and SecondMarket, which allow investors to purchase shares in private companies like Facebook, Twitter and Groupon, means thousands of smaller investors—with access to far less information than VC insiders—are getting in on the action. In theory, some may well have purchased shares in Groupon before their S-1 revealed their precarious financial situation—possibly after reading Mr. Hoffman’s endorsement.

“People think there is a distinction between how an major investor can talk about a public company versus a private company,” Ralph Ferrara, former General Counsel for the SEC, told Betabeat. “But if you read the law carefully, you see that everything that you can do wrong when combining a public company with the media applies to investments in private companies as well.”

Betabeat reached out several times to Greylock Partners for comment, but so far has received no reply.

According to Mr. Ferrara, there is a provision of the Securities and Exchange Act of 1934—often overlooked and typically unappreciated by investors and the lawyers who represent them—which that applies not only to public companies but to private securities as well: Section 10 b-5. Mr. Ferrara explained, "When an investor or insider is engaged in an omission which proves to be a deception, and the result of that was a financial loss to another investor, a case for fraud can be made.”

On Monday Mr. Arrington kicked off the TechCrunch Disrupt Conference, an extremely lucrative three-day orgy of back-slapping bonhomie between the TechCrunch editorial team and the companies they cover. Mr. Arrington began by announcing that he was stepping down, but he made no apologies for the conflict that caused his resignation. In fact he wore a T-shirt that read “unpaid blogger”—a middle finger to Arianna Huffington, and a play on the fact that while he had officially resigned, he has every intention of continuing to write about the companies he invests in.

For the first event of the conference, Mr. Arrington sat down for a friendly “fireside chat” with Greylock’s Reid Hoffman.

“I love the shirt,” said Mr. Hoffman.

“You can buy one on Zaarly, or not on Zaarly, dammit,” Mr. Arrington blustered, before adding jokingly, “I already said something I shouldn’t have about a company I invested in.”

Talk quickly turned to Mr. Arrington’s own drama. “I don’t have any doubts about TechCrunch, or your integrity,” Mr. Hoffman said seriously.

“But do you think all the drama around me hurts the companies?” said Mr. Arrington, the brazen provocateur suddenly concerned about media attention. “That worries me sometimes.”

Mr. Arrington began to needle Mr. Hoffman about what deals he was in. “As an investor, you really shouldn’t be talking about this stuff,” Mr. Hoffman warned, squirming a bit in his chair in front of a thousand journalists and industry insiders.

“All I want to say is, nicely done,” concluded Mr. Arrington. “You’ve got to get me in on some of these deals.”

“Likewise,” said Mr. Hoffman. And with that, it was back to business as usual.

Disclosure.

Little kid's backpacks are out of control

Dust off those protractors and get some fresh batteries for that TI-83 kids, because summer's almost over and it's time for some tech tutorials that will put you on the right track to those mobile millions.

As usual, General Assembly has a slate of classes lined up for the aspiring app maker. News You Can Use goes down tonight, an introduction to the New York Time's API. Charlie O'Donnell describes the Grey Lady's interface, "Vast! Powerful! A little confusing! All of these describe the New York Times data services, the amazing collection of more than a dozen API’s granting direct, real-time access to a huge assortment of information."

Farther afield is Baruch College’s course on Mobile Application Development. According to Time Out, "You’ll design an icon, write action-scripting code, create scrolling pages and register your program with the Apple App Store or Android Market. Some prior knowledge of Flash is required." Wonder if the App Store's inscrutable gate keepers have a soft spot for student software ...

From the Don't Waste Your Money Department, Media Bistro is offering a $350 course in blogging. If you're a retiree looking for a new creative outlet with plenty of cash to spare, this might be a decent option. But anyone honestly looking to make a name for themselves as a blogger should realize the entire medium is built around crafting a fresh, intimate voice, not the kind of thing you learn in a classroom.

Last but not least, Betabeat will be hosting a Skillshare class this Wednesday at our offices in Midtown. Skillshare co-founder Malcolm Ong will reprise his sold out Programming Concepts for Non-Programmers from 7-8:30pm. The class  is not officially open for registration yet, and sold out in just twenty minutes the last time Mr. Ong offered it, so watch our tweet stream today for first chance to sign up.