Arrington. (Photo via Flickr.)

Last week, allegations of past abuse surfaced against TechCrunch founder Michael Arrington. Late last night, he addressed those claims, posting a response on his own blog, UnCrunched. It's a denial in the strongest, most straightforward language:

There have been some extremely serious and criminal allegations against me over the last week. All of the allegations are completely untrue, and I’ve hired a law firm to represent me in the legal actions against the offending parties.

I know this isn’t, for now, much information. I will have a full and complete response to these allegations sometime later this week. My goal will be to direct as much sunlight as possible on the issues so that the absolute truth can be known and I can begin to put my life back together.

He also adds that he's asked his attorneys "to contact appropriate law enforcement agencies about these false allegations."

Robert Scoble also popped up in the comments with an apology for every getting involved in the first place. In a Facebook post, he wrote: "I used this to get a dig in on Mike for an unrelated issue and that just wasn't cool. I'm sorry Mike."

Meanwhile, this weekend Meghan Asha also provided TechCrunch with a statement, denying the rumors (reported by Gawker) that she was mistreated by Mr. Arrington:

None of the claims made on my behalf over the past week are accurate. I’m not inclined to comment on my personal life, Mike and I remain friends.

I’m focused on business and my career.

I hope we can all get back to the business of building innovative companies in the spirit of what makes this industry great. I wish everyone well who is involved. I have no further comment on the matter.

(Update, 2:50 p.m.) Former TechCrunch CEO Heather Harde has also published a statement of "full support of Michael Arrington" on Facebook. She writes:

"We operated TechCrunch out of Michael’s house for the first two years, so to say that I’ve seen the inner workings of Michael Arrington’s personal life is a gross understatement. As any startup, we worked long hours, and I overlapped significant blocks of time with Michael’s roommates, friends and girlfriends. I would have detected patterns of abusive physical behavior if they had been present."

"I simply do not believe any of the allegations to be true," she adds.

She also casts doubt on the credibility of Mr. Calacanis and Mr. Feldman on the matter:

"'Former Friends' Jason Calacanis and Loren Feldman have been estranged from Michael Arrington longer than they ever were friends, and they are not reliable character witnesses on this matter."

Meanwhile, the original accuser, Jenn Allen, seems to be sticking to her story:

@arrington You know everything I said and posted is truth and true. How can you do this to women and lie to everyone. Reflect for once. #fb

— Jenn Allen (@JennAllen) April 8, 2013

(Update, 5:56 p.m.) Well, this just took another turn. A bit of background: When Mr. Arrington posted his denial of the allegations late last night, Robert Scoble promptly responded with an update, apologizing for using the controversy to get a dig in. Well, the original accuser, Ms. Allen, turned up in the comments on Mr. Scoble's apology, doubling down on her claims. Mr. Scoble wasn't having it: "Sorry, Jenn Allen, but if you had a case you should have made it to the authorities, not on social media."

Now Ms. Allen has posted another Facebook update:

UPDATE: My sources tell me Robert Scoble is actually Michael Arrington today on FB. Scoble got hacked. I'm just trying to help spread the truth and awareness of what he did and does. As far as I know I haven't been hacked yet by Mike (today or in the recent weeks) but he has hacked my phone in the past and caught him in the process of doing it.

We've reached out to Mr. Scoble for comment on her claims.

Mr. Arrington tweeted a screencap of Ms. Allen's update:

Everything else aside, Jenn needs help, now. Someone, a friend, relative, anyone, needs to reach out. immediately. twitter.com/arrington/stat…

— Michael Arrington (@arrington) April 8, 2013

(Update, April 9th, 8:39 a.m.) "There is no truth to the rumors I have been hacked," Mr. Scoble told Betabeat.

Arrington. (Photo via Flickr.)

Update, 4/8/13: Michael Arrington has responded with a denial of all allegations, and his ex, Meghan Asha, has issued her own denial of the allegations  "made on [her] behalf." More here. 

Even as most of Silicon Valley stays silent, allegations are still emerging against TechCrunch founder Michael Arrington. Now Gawker says they've uncovered two additional stories of Mr. Arrington behaving abusively toward women.

The first incident occurred way back in 1999, when Mr. Arrington was working at a startup called RealNames. Cecile Sharp, who was the company's HR rep at the time, says that Mr. Arrington was investigated for an alleged assault on a woman who worked as a sales rep for the company.

Gawker reports:

The accusation stemmed from a conference that Arrington and the coworker, along with a number of other RealNames employees, attended in the fall of 1999, Sharp said. According to Sharp and another source familiar with the allegations, the coworker claimed that one night during an altercation in a hotel room, Arrington violently threw her onto a bed and held her down so hard that she ended up with fingerprint bruises on her arms.

An outside firm hired to investigate reached "an uncertain conclusion," and Mr. Arrington was simply reprimanded. His alleged victim (who'd dated Mr. Arrington, though they were apart during the reported incident) refused to comment on the record, and the former CEO of the company hasn't responded, either.

Gawker also writes of another incident in 2009, on the night the TechCrunch50 conference wrapped up. Two unidentified sources tell the blog that several people--including Jason Calacanis and Loren Feldman, who've already condemned Mr. Arrington, as well as former TechCrunch writer Paul Carr--were celebrating. That is, until the good times abruptly ended:

 The group was having fun "drunk-dialing" various friends and tech personalities, when one woman Calacanis called brought the festivities to a halt: According to two sources familiar with the call, the woman, a good friend of Asha's, told Calacanis that Arrington had attacked [his girlfriend at the time, Meghan] Asha that night, throwing her against the wall in a hotel room.

Mr. Calacanis confirmed that the call had happened, but told Gawker he didn't "feel comfortable" discussing it. Mr. Carr remembered the call, but not the content: "I have zero recollection of a conversation involving allegations of abuse," he told Gawker.

Of course, the phone call is hearsay, and Ms. Asha herself won't talk. She declined to comment to Gawker, though an anonymous friend told the site, "I've heard it straight from Meghan that Arrington abused her, and she did mention the wall-shoving incident."

Meanwhile, a few more people are speaking up about the rumors, while still tip-toeing very carefully around the question of whether they're true. Here's Vivek Wadhwa who, like Mr. Calacanis, has tangled with Mr. Arrington before:

Gawker on Mike Arrington: gaw.kr/YU0x6J -- shocking, but I've heard same rumors. I've also taken fire: bit.ly/AbPmtM

— Vivek Wadhwa (@wadhwa) April 4, 2013

Inquisitr spoke to former TechCrunch writer Duncan Riley, who depicted TechCrunch's work environment during his tenure as hostile. "He felt entitled to treat people basically like shit," he said of Mr. Arrington, adding, "I treat my dog better than Michael treated his staff." This isn't the first time Mr. Riley spoken disapprovingly of Mr. Arrington.

In fact, basically everyone who's spoken up has a contentious history with Mr. Arrington. Folks might be discussing this behind closed doors, but most remain tight-lipped in public. The number of times the developing allegations have shown up on Techmeme? Still zero.

Arrington. (Photo via Flickr.)

Update, 4/8/13: Michael Arrington has responded with a denial of all allegations, and his ex, Meghan Asha, has issued her own denial of the allegations  "made on [her] behalf." More here. 

On Monday, TechCrunch founder Michael Arrington's ex-girlfriend publicly accused him of physical abuse and followed up with accusations of rape. As yet, there's absolutely no proof of Ms. Allen's dark allegations. But today, two men Mr. Arrington once called friends have publicly denounced him.

This is getting very, very ugly--not that it was a pretty business to begin with.

The first long testimonial comes from Jason Calacanis who, admittedly, has been bitching publicly about Michael Arrington for years, ever since their friendship disintegrated over the TechCrunch 50 conference. (They're basically the Kenya Moore and Phaedra Parks of Silicon Valley.)

On his Facebook page today, he threw his weight behind Ms. Allen's accusations (without once naming Mr. Arrington specifically, thought it's very clear who he's talking about):

Then story after horrific story of unimaginable behavior were told to me in private and I said nothing. Just stayed focused on my work.

Now all those stories are coming out publicly and there is no victory for anyone involved. Seeing the bully finally meet his demise is just sad. I wish I could have gotten through to the person who was, for a time, one of my favorite people.

Nor is Mr. Calacanis the only ex-friend publicly denouncing Mr. Arrington. Gawker reports that another onetime pal, blogger Loren Feldman (a polarizing figure in his own right), has come out against the man with a YouTube video, in which he announces:  "Let me tell you this: I think he did it."

He calls the allegations "the worst kept rumor in the Valley for years." He claims he cut Arrington out of his life specifically because of the rumors, and tries to shame the tech world for keeping the matter quiet when we're supposed to be living in an age of radical transparency. "One of the biggest tech luminaries is accused of something like this and no one will even talk about it."

He's right. Mr. Feldman and Mr. Calancis are both controversy-courting figures in the tech industry, in addition to being former friends. Despite "liking" Mr. Calacanis' Facebook post, most insiders haven't said a word, at least not in public. In the comment thread on Facebook, Robert Scoble brings up the issues of defamation, although Mr. Arrington's stature and legendary reputation as a bully obviously play a part.

“That said," Mr. Scoble adds, "believe me, EVERYONE is talking about these charges behind private doors in Silicon Valley. I’m sure the charges are being looked into.”

Not Mike Arrington. (Photo: screencap)

Mike Arrington, founder of TechCrunch, is not having a good week. That's because Homeland Security, that most reviled of federal bureaus, has taken his boat. We know this because he has taken to his blog with an outraged testament titled, "THE DEPARTMENT OF HOMELAND SECURITY STOLE MY BOAT TODAY."

Mr. Arrington purchased the boat--"Nothing too fancy or large," he assures his readers--from a Canadian company called Coastal Craft, as a little present for himself. Seattle, he explains, has "a big boating culture," and besides, this was the kind of high-tech toy he could blog about: "It has state of the art electronics and a fairly new highly efficient propulsion system that the TechCrunch audience would be interested in."

We assume he was also persuaded by fantasies of cutting o'er the waves, dressed in his finest, crispest khakis, wind in his hair. He named her "Buddy," no doubt anticipating many long, happy years together.

But the ambrosia has turned to ashes on Mr. Arrington's tongue:

"Buying this boat was one of the worst decisions I’ve ever made, and the nightmare is only just starting."

It seems this isn't the first patch of rough water that Mr. Arrington has encountered on his quest to bring Buddy home: "There’s a whole story about the disaster of buying a new boat from this company that I’ll write about another day." No, Mr. Arrington wants to make it known that the Department of Homeland Security took his boat because he refused to perjure himself and sign a customs form that contained an error:

"The primary form, prepared by the government, had an error. The price was copied from the invoice, but DHS changed the currency from Canadian to U.S. dollars."

When Mr. Arrington wouldn't sign the form without corrections, Department of Homeland Security seized Buddy, ordering Mr. Arrington off the bridge of his own boat, daydreams cruelly crushed. Buddy, no!

But don't think this is all one, long humblebraggy complaint about the fact that Mr. Arrington has to hire a lawyer before he can finally, finally commune with the sea. Don't feel sorry for him now that he's a child staring at a dropped scoop of ice cream. Oh, no: This is an act of political speech, his Marin Luther moment:

"My point in writing this isn’t to whine. Like I said, this will get worked out one way or another.

No, it’s to highlight how screwed up our government bureaucracy has become.

A person with a gun and a government badge asked me to swear in writing that a lie was true today. And when I didn’t do what she wanted she simply took my boat and asked me to leave."

Join us next time, when Mr. Arrington will venture forth to the DMV to register a Porsche named "BFF" and learn that lo, it is staffed by very unhappy people!

(Update, 2:46 p.m.) Over at TechCrunch, Mr. Arrington has now posted another long meditation--actually, maybe more of a screed--on the meaning of Buddy's captivity. His missing boat is directly tied to our nation's inevitable disintegration, it turns out:

As someone immersed in startup culture, I am a big fan of just walking away from stuff that can’t be fixed. In my post “Always Swim Downstream” I talk about focusing on what you’re good at and just walking away from unsolvable problems.

America is an unsolvable problem, a nation divided and deeply in hate with itself. If it was a startup we’d understand how unfixable the situation is, most of us would leave for a fresh start and the company would fall apart.

He concludes, "America is MySpace."

This is just like the part of Braveheart where they kill Mel Gibson's wife. FREEDOM BUDDY!

It ain't easy being on the green stage. (Photo: Twitter.com/waynesutton)

We should probably call TechCrunch Disrupt the startup Super Bowl, but it's a little more like a cross between the Rose Bowl and a National Latin Club Convention. Case in point: Today's interview with Mark Zuckerberg, booked solid but streamed online.

When the livestream cut away from a frenetic tour of the startups launching at the conference, Misters Arrignton and Zuckerberg hadn't yet taken the stage. And so blog personalities filled the time with casual chitchat that included handicapping the various Startup Battlefield contenders. But then came the word: "I have to cut you off, we have to go to the stage--it's time."

It was time for a bit of stilted ice-breaking banter about the size of the venue and the amount of standing room. (Without straying too deep into hoodie hagiography, we'd say: Zuck, you're a rich man. Buy some real, grown-up shoes. )

But almost immediately, it was onto the elephant in the room: The shitty state of the company's stock, which hovers at roughly half the IPO price. Mr. Arrington asked the Zuck whether he'd do anything differently with the benefit of hindsight. Facebook's wunderkind parried--"Just get right into it!"--but just as quickly launched into a rapid-fire defense of the company and its prospects.

Admitting performance has been "disappointing," Mr. Zuckerberg once again called attention to their longer-term mission of "making the world more open and connected" before moving onto the topic that's been haunting the company since the run-up to its debut on the public markets: Mobile.

Mr. Zuckerberg copped totally and without reservation to the increasing importance of mobile. In fact, he claimed to "basically live" on his phone and offered an example:

"You want to hear something pretty funny? The founders letter in the S-1--I wrote that on my phone."

Arrington: "The lawyers didn't... "

Zuck: "No, I wrote that."

Facts and figures came fast and furious. He insisted that Facebook's mobile footing looks a lot surer than it did six months ago, citing iOS integration and a new Android apps. Also promising for the company is the amount of time users spent on mobile versions of Facebook, as well as how engaged they are. Mobile users are more likely to be daily active users, too. "It's easy for people out there to underestimate how fundamentally good mobile is for us," he said, "on a bunch of different levels."

If he doesn't pull this off, that's the quote that's going in the history books.

All this, by the way, in his first answer. He's nowhere near as awkward as he used to be, but when he gets nervous Zuck still sounds like an Anthony Michael Hall character trying to talk his way out of a (deserved) detention. Also, the Kermit voice is never going away.

Zuck's current app-happy crush on mobile was inspired by some hard knocks in Facebook's past. The company's greatest failing, he said, was putting all its mobile eggs in the HTML5 basket.

Rather than developing native iOS or Android, it fixated on letting in users through a mobile browser. Thus the company devoted six to eight months building an internal infrastructure clunkily-named "Face Web," to publish to the mobile web. After four months of poor performance, he realized the error of his ways. “We burnt two years,” Mr. Zuckerberg admitted. “Probably looking back thats probably one of the biggest if not the biggest mistake. But we’re coming out of that.”

Mr. Zuckerberg was equally upbeat on the subject of monetizing all those mobile minutes. "I'm really optimistic because mobile is a lot closer to TV than desktop," he said, pointing out that right-hand ads have made Facebook a multibillion-dollar company. Mobile ads, however, have to be more integrated, which might end up being an unexpected blessing. "What we're seeing already is that they're performing better," he said.

Well, at least the shareholders are buying in:

fun to watch the real-time after hours share price of FB as zuck talks, almost up to 20.00 share, google.com/finance?q=NASD…

— Kevin Rose (@kevinrose) September 11, 2012

But we can't help but wonder how Zuck's handling the wear and tear. Asked whether he was "still having fun," Zuck outright dodged the question. He told Mr. Arrington that, "for me it's not really about fun, though--it's about mission."

Can we get a fact-check from Sean Parker on that?

Image via Flickr user jdlasica

For the last decade, Erick Schonfeld has been the lone wolf of tech media, working as the East Coast point man for tech publications headquartered in Silicon Valley “He’s the kind of reporter who can handle anything you throw at him, from a trendy Web 2.0 startup to a Fortune 100 titan,” said Josh Quittner, who was Mr. Schonfeld’s old boss at Business 2.0. “For us he played the one man band.”

The thirty-nine-year-old father of three lives in the suburbs near Chappaqua, forty five minutes north of New York City. (He left a tip on Foursquare about his morning commute from the Metro North station: “Get here early and snag a metered parking spot.”)

At public events he tends to wear slightly oversized suits in tan or grey, frameless glasses and a thick head of dark curls. “He’s a very sober person, even keel, not easily upset,” said Mr. Quittner. “When I started we had a number of people working for us on the East Coast, but by the end it was just Erick.”

Two weeks ago, Mr. Schonfeld, never a shrinking violet, took a big step into the spotlight. He had been, for the last four years, the co-editor of TechCrunch, a level headed counterpart to Mike Arrington, the pugilistic provocateur who founded the site as a personal blog. But the last year has been an eventful one for TechCrunch. Mr. Arrington sold the site to AOL a year ago, after which AOL merged with the Huffington Post, setting up an inevitable clash between two of the biggest egos in media: Mr. Arrington and Arianna Huffington. After Mr. Arrington announced he'd formed his own tech fund and would be investing in some of the same companies TechCrunch covered, he was forced out in a dramatic shake-up. That's when the mild-mannered editor was asked to step in for one of the media’s biggest bomb throwers. He accepted the position, and immediately found his old partners leveling their formidable rhetorical firepower at him.

“The truth is, Erick was Arianna Huffington’s choice, not TechCrunch’s,” wrote Arrington acolyte Paul Carr, in a resignation post that he published on TechCrunch (where else?) as Mr. Schonfeld was boarding a plane. Mr. Arrington followed up a few days later on his new blog, Uncrunched, noting, “Public executions of leaders tend to have a severe chilling effect on whoever takes over, and Arianna Huffington is, without a doubt, the current editor in chief of TechCrunch.”

With his influential ex-partner publicly undermining his authority, many wondered if Mr. Schonfeld could keep the site together. Prominent tech investor Fred Wilson had already written on his blog, “TechCrunch is a big question mark. If AOL can keep the rest of the team together, then TechCrunch has a bright future.” The key, wrote Mr. Wilson, was that Techrunch “Has a voice, a swagger, a 'fuck you' attitude that comes from Mike. That can also live on without Mike if AOL allows it. They need to keep the remaining team, the voice, and that attitude if they want to remain at the top of the world of tech media.”

That may be Mr. Schonfeld's biggest challenge for the moment. The two remaining writers best known for their swagger are Sarah Lacy and MG Siegler.

Ms. Lacy is on a fourth-month maternity leave. And late Monday night, Mr. Arrington announced that MG Siegler would be coming to work for him as a venture capitalist at his new Crunchfund, though he would continue to pen a TechCrunch column on Apple.

A weary Mr. Schonfeld phoned Betabeat, shortly after the news about Mr. Siegler broke. “Obviously, MG was a great asset to us, and I would have loved to keep him on as a writer,” said Mr. Schonfeld. “But I'm glad I found a way to keep his voice on the site.”

Mr. Schonfeld noted that this move into venture capital was long in the works, a notion Mr. Siegler seconded in a blog post. But the timing, so soon after Mr. Arrington’s departure, did not look good. “It doesn't really matter how it looks, it matters how I perform,” said Mr. Schonfeld. “I'll stand by that, over the time to come.”

Despite being viewed by some as the Robin to Mr. Arrington's Batman, in fact Mr. Schonfeld has a formidable resume of his own. After graduating from Cornell in 1993, Mr. Schonfeld went right to work as a journalist at Fortune. In 1996 and again in 1997, Schonfeld was recognized as one of the “brightest financial journalists under the age of 30” by the TJFR Business News Reporter. In 1999, he won the prize for best information technology submission at London’s Business Journalist of the Year Awards. In the lead up to the dot-com bust he moved to Business 2.0 and when that company went under a few years later, he took a coveted spot as co-editor at TechCrunch.

When Mr. Schonfeld began working at TechCrunch in 2007 it was still largely the personal blog of Mr. Arrington. In the five year’s since, the site has become the news outlet of record for the tech industry. Startups compete to break their company’s news on TechCrunch, both as a status symbol and because coverage there brings young companies so many new users. The site’s conference, Disrupt, is a sell-out affair, with execs from Google, Facebook and Twitter taking the stage to trade inside jokes with Mr. Arrington.

Mr. Schonfeld’s opportunity is vast. TechCrunch is bigger and more profitable than ever. Its recent acquisition by AOL means it has a fatter bankroll and a much larger audience network. Still, there's a big obstacle: Mr. Arrington seems intent on burning the fields behind his departing forces, even going so far as to write his own epitaph, evoking the spirit of Louis XIV: “I am TechCrunch and TechCrunch is me.” Given that he's the site's founding editor and most recognized writer, that has been true till now. It’s up to Mr. Schonfeld to rewrite that formula.

“I’ve been recruiting for the last three weeks straight,” Mr. Schonfeld told Betabeat. “To pretend that everything will go on as before is foolish. But the team will grow and, best of all, the top writers in the industry all want to work for us.”

For some, Mr. Schonfeld comes across as the consummate company man. “When Mike sold TechCrunch to AOL, a lot of the writers were very unhappy,” said one former staffer. AOL was about as far from the scrappy, irreverent brand TechCrunch had built as possible, and what had been an intimate business was now going to become part of a notoriously corporate behemoth. “Erick was the opposite of most people. He seemed to relish going to those AOL management meetings.”

No one Betabeat spoke to for this article doubted Mr. Schonfeld’s talent’s as a journalist. But several of the site's writers, past and present, worried that Mr. Schonfeld didn’t have the edge necessary to cultivate a new class of TechCrunch writers who would maintain the site's trademark swagger. “Mike can make you feel like a million bucks, and he can also tear you apart with a few words,” said a former staffer. “Erick was good at patching things up after Mike lashed out.”

Up until now, Mr. Schonfeld’s calm persona had been an asset at TechCrunch. It was a classic good cop, bad cop partnership, with Mr. Arrington lighting the fires and Mr. Schonfeld, along with CEO Heather Harde, making sure the trains ran on time.

But Mr. Arrington’s wrath was also the site’s most powerful tool. He used it to motivate his writers and to inculcate their work with a combative tone that became the site’s trademark.

Mr. Schonfeld threw a few punches of his own last week, slamming rival publication VentureBeat for writing a hackneyed attack on TechCrunch. VentureBeat quickly retracted their story and then apologized. Asked if he felt the need to get more aggressive, to put his own stamp on TechCrunch and to reclaim it from Mr. Arrington, Mr. Schonfeld demurred. “It’s not like I’m new here," he said. "There will be more continuity than difference and I don't see a need to sever the connection to Mike. I am not going to change the editorial approach, which was to be smarter and to be first.”

But Mr. Schonfeld did acknowledge that he needed, in some very big ways, to fill the void left by TechCrunch’s departed founder. “I have a lower profile than Mike, it’s a different style.I try not to draw attention to myself, because I prefer to let my stories speak for themselves. But yes, I realize I am the face of the company now. I don’t have to do things the way he did, but yes, I have to come out and be more, be in public."

Nonetheless, he added firmly, "I’m going to do it my way.”

The main problem with this, one investor told Betabeat, is that Mr. Graham takes a straight six percent stake in YC companies even as he waxes righteous when those companies go out to raise. Entrepreneurs defer to Mr. Graham's advice, this source said, even when there's another investor they'd like to work with. "He's protecting those two blockbusters," this source said, referring to the relatively small number of mega-breakout YC startups such as Airbnb and Heroku.

It's fine by some investors if Mr. Graham wants his companies to talk a big game, our source said--personally, this source plans to clean up by investing in YC companies later when they "have to do a down round" after the inevitable failure to meet their investors' artificially inflated expectations.

ARRINGTON TOWN! Mike Arrington seems to be breaking stories on his own Twitter feed rather than push them to TechCrunch writers--and now that he's got his own blog, we're expecting to see some direct competition with his own stomping grounds. After years of pressuring startups to give TechCrunch exclusives, some sources speculated that Mr. Arrington is now telling founders not to send stories to TechCrunch. Betabeat was unable to confirm that, but we're told by TechCrunch staff that Mr. Arrington is no longer Skyping or Yammering or with the team, and he's stopped forwarding stories to tips@techcrunch.

"I have no idea where Mike tells people to send his scoops," former TechCrunch writer Paul Carr said. "I think he's breaking stories on his own Twitter feed." So with TechCrunch out of the way, where are founders sending their stories? Perhaps that other tech-y blog with the prominent personality at its helm? "BI is trying to replicate the fuck you attitude of classic TC," Mr. Carr said.

NEXT! Justin Johnson, the first creative filmmaker hired at Next New Networks, is bowing out. If you recall, NNN, the company that brought you "Bed Intruder," has been taken over by YouTube (read: Google). Mr. Johnson is headed to L.A. after four and a half years at NNN; he's behind the popular YouTube Time Machine, which had more than million page views in just over a week after launching last year.

Given the "Google crushes startup souls" narrative going around, we wondered if Mr. Johnson felt his new corporate overlord was cramping his style. Nah dogg, Mr. Justin told us in an email. "The Time Machine App has been hugely successful which has given me some cushion for sure, but ironically, I just got sick of being a teacher of how to succeed on YouTube, and wanted to get off the bench and give it a go myself," he said. "I call it 'quitting YouTube to work on YouTube.'" Friend and former co-worker Erik Beck, who launched the YouTube channel Indy Mogul with NNN and Mr. Johnson, is also leaving Google. "We're working to build up a channel of our own for fun and profit," Mr. Johnson said. "I think it's a very positive story for YouTube--we believe so much in the system, we want that freedom to profit from pure creation ourselves instead of the salary and ridiculous benefits at Google."

BIRCHBOX: A NEW SCENT FOR MEN, COMING SOON. As Guyhaus ramps up for toiletry delivery and Bespoke Post launches out of the ER Accelerator cannon with "curated awesome" subscription care packages for men, Birchbox just may scoop the market first. "My husband would like monthly samples," one customer queried via Tumblr. "Why not a birchbox for men?" "We’ll have something for him very soon :)," Birchbox answered. "Stay tuned!"

Mr. Carr

Flabbergasts! New York-based TechCrunch editor Erick Schonfeld, newly-named editor in chief of the site, has been accused. In a glorious resignation post, TechCrunch writer Paul Carr pointed a finger at the New Yorker: "While Heather, Mike and other senior editorial staffers were making a stand for the site’s editorial independence from The Huffington Post, Erick cut a side deal with Huffington to guarantee him the top job once Mike was gone."

This information came from Mr. Arrington "and was later corroborated by more than one other person close to the situation," Mr. Carr told Betabeat by email. "I don't really want to say much more than that."

Mr. Schonfeld appears to be on an airplane at the moment and did not respond to an email seeking comment.

Mr. Carr let loose the dirt on Mr. Schonfeld and AOL content overlord Arianna Huffington in his farewell post.

"The curious thing is that Erick knew everyone at TechCrunch supported him, at least for the interim role. And yet when Arianna called, he answered. Mike and I spoke at the time and he gave me his take on the deal: “at the point Erick began negotiating with Arianna instead of standing firm with the rest of us, he became nothing more that Arianna’s pet. All hope for independence with him at the lead became lost”. (Mike asked me to keep our conversations confidential until the situation was resolved.)"

...

"In this situation, though, I think [Ms. Huffington] screwed up badly by allowing her growing personal animosity towards Mike — and, let’s be clear, this fight was almost entirely personal — to rule her head, ejecting Mike completely from the company he founded and installing his polar opposite as a puppet editor."

...

"I really can’t over-emphasize how much Mike, as an editor, made writers feel like he had their back."

...

"Do I have another job already lined up? The answer is no. Once I hit 'publish', I’ll be without a regular writing gig for the first time in five years. This is both terrifying and exciting in equal measure. Sometimes you just have to hurl yourself off the cliff and see if anyone tries to catch you."

Mr. Arrington flashes his "first amendment" gang sign.

Betabeat published a story yesterday about the ways in which tech investors who write about private companies on public blogs might run afoul of SEC regulations. It focused, naturally, on Mike Arrington, who saw the post around 2 a.m. this morning and responded with this tweet:

"Screw that. Let me introduce you to the first fucking amendment to our constitution."

Mr. Arrington failed to provide any links to the first amendment, but luckily, Betabeat had spent yesterday afternoon conversing with Prof. John Coffee of Columbia University, one of the foremost experts on securities law in the nation.

"I do agree with Ralph Ferrara that the rules established by the Securities and Exchange Act of 1934 apply to public discussion of private companies in the same way it does to public companies," said Prof. Coffee.

Prof. Coffee also agreed with Mr. Arrington that the first amendment offers some protections to bloggers writing about private companies in which they are investors with inside knowledge. "It's not just about the sin of omission. Otherwise it would be impossible for anyone to write about companies with attaching a full prospectus to every post."

The argument, should a case go to court, says Prof. Coffee, would be about proving deception. "Can you prove that this blogger wrote something which wasn't their honest opinion, or show that they intended to deceive others?"

The portion of the Securities and Exchange Act of 1934 on which all this hinges is section 10 b-5: Employment of Manipulative and Deceptive Practices:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

1. To employ any device, scheme, or artifice to defraud,
2. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
3. To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,

in connection with the purchase or sale of any security.

So the answer is, yes and no. Investors like Reid Hoffman, who wrote a post on TechCrunch about why Greylock invested in Groupon, are not guilty of fraud simply because they neglected to mention, let's say, the $400 million a year Groupon was losing.

But by blogging publicly about the investment, and knowingly omitting a material fact about the company's finances, Mr. Hoffman opened himself up to an investigation by the SEC or charges of fraud from investors who believe they suffered a financial loss as a result of his post (see Rochez Bros. vs Rhoades).

In Mr. Hoffman's case, charges of market manipulation might center around the long expected IPO or the robust secondary market for trading equity in Groupon. And as Prof. Coffee points out, the fact that the secondary markets are much smaller and far less transparent than the public markets, means that manipulation is a much more serious issue.

"Especially in the very thin, private secondary markets, where there is little liquidity and share prices are more subject to manipulation, investors who blog publicly and don't disclose contrary interest, are in violation of 10 b-5."

P.S.--"The winner from this group receives the Disrupt Cup and $50,000, taking over possession from Disrupt New York winner Getaround. Without further ado, the runners-up is Prism Skylabs. And the winner is…Shaker! Disclosure: TechCrunch founder Michael Arrington is an investor in Prism Skylabs and is a pending investor in Shaker."

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.