BOB GARFIELD: In some areas of reporting, politics and government, for instance, print and TV still dominate the coverage. Elsewhere, notably entertainment and technology, dominance has been ceded to the Web. And no news site dominates quite like TechCrunch, a network of websites and blogs that’s basically buried all other news sources, online and off, in coverage of technology and tech enterprise. But success has bred scrutiny, including a recent New York Times piece that questions TechCrunch’s approach to journalism. At issue is what some see as rumor mongering but which bloggers regard simply as incremental information gathering. Whereas traditional news organizations nail a story down, confirm it and then confirm it again before going to press, TechCrunch uses the fluidity of the blog form to develop stories in full view in close to real time. Founder and co-editor Michael Arrington explained his process.

MICHAEL ARRINGTON: The way we handle the news is we have lots of sources in the technology space. They're my friends, to different degrees, and I trust them or don't trust them to different degrees. There are people in Silicon Valley that if they send me a text message and say X just happened, I'll write that story and say that this is confirmed this happened. I trust that person that much – single source, never wrong. That person would never burn me. But if I'm at a party or, you know, at a lunch and somebody says, hey, yeah, you know, I heard that Google just bought Microsoft, just as something sort of preposterous so we know we're not talking about a true rumor, at best I'm going to sort of try to track that down with sources I have at both of the companies involved and see if it goes anywhere. Ninety percent of the time it doesn't, and we don't post anything even though it would be a great attention grabber. Ten percent of the time though something happens where I call up somebody, and maybe they’ll say, oh Mike, there’s something there, you should dig on that. And then, you know, maybe I'll talk to a couple of other people and realize, wow, I'm pretty sure that right now these two companies are in a conference room talking. And I might go with that story then. That certainly isn't enough for, say, The New York Times with the rules that they play under today, but it certainly is enough for me.

BOB GARFIELD: Now, that kind of approach has two really interesting consequences that change the dynamics of reporting altogether, and I hope you'll give me some real-life examples.

MICHAEL ARRINGTON: Yeah.

BOB GARFIELD: One is that once you print it, sources start coming out [LAUGHS] of the woodwork -

MICHAEL ARRINGTON: Right.

BOB GARFIELD: - people who do have information to either confirm or deny authoritatively. And the second thing is that companies who tend to say absolutely nothing when there are merger talks going on, for very good reason, themselves, because you have put it in play, come into public view and start speaking for the record. Give me some examples.

MICHAEL ARRINGTON: Yeah. So part of the first big story that we ever broke, I got a tip from – I mean, The New York Times would horrified by this – but I got a tip from an entrepreneur who said that he'd heard [LAUGHS] that Google was buying YouTube. And I was still a pretty young blogger, and I'm not a journalist – I didn't go any kind of journalism school – so I wrote a story saying, I got an email tonight about a possible Google acquisition of YouTube that may be in the final stages before closing. Rumored price is 1.6 billion. A quick call to a venture capitalist confirmed that the rumor is circulating, and he also confirmed the price. And that’s most of the post. There was some commentary afterwards. I was immediately attacked for spreading rumors because of the flimsiness of the source. It turned out that four days later the acquisition was announced at that price. But that was a perfect example. And I updated and wrote new posts on that story probably six times over the weekend that occurred between my rumor being announced and the actual deal announcement. Sometimes people, our readers, just want to know what insiders in Silicon Valley are talking about. You know, if two VCs go to lunch, what rumors are they swapping? And I think as long as you tell your readers this is a rumor that’s circulating, there’s no reason not to post that, with exceptions.

BOB GARFIELD: Well, actually, there are some reasons that I can think of. These venture capitalists are using you to float a rumor that they stand to benefit from being in circulation, whether there’s any substance to it or not.

MICHAEL ARRINGTON: Sure.

BOB GARFIELD: I mean, there’s any number of ways that posting unsubstantiated information can leave you vulnerable to being just totally played by one party or another.

MICHAEL ARRINGTON: Sure, yeah. Sure. Right at the end of my sentence - I made a bold statement and then said, “with exceptions.” One is exactly what you said. If somebody’s telling me something that they supposedly know directly, what incentives do they have either way on the deal? We also look at whether or not a public company is involved, and so, you know, stock manipulation is a big concern. I need to be extremely certain in that circumstance, that even if I'm clearly stating it’s a rumor, that it’s right. For instance, last summer we wrote a story about Yahoo! and Google announcing a search marketing deal. We broke that story – I think there was a six billion dollar momentary swing in Yahoo!’s share price. I was absolutely correct on that story, and I felt really good about my sources, and so I went forward. The funny thing is the readers love this. Our readers love – they trust us, they understand our language when we say this is a thin rumor. They love it. The people that don't are our competitors, and other bloggers and mainstream journalists freak out about it and create this issue that really doesn't exist.

BOB GARFIELD: Okay, so your free ride with me is over because there’s another ethical issue that I do have to discuss.

MICHAEL ARRINGTON: Uh-oh!

BOB GARFIELD: And that is your financial interest in a variety of tech enterprises -

MICHAEL ARRINGTON: Yeah.

BOB GARFIELD: - some or many of which TechCrunch reports on. Now, that clearly is out of bounds in terms of traditional journalism and it seems to me out of bounds in terms of any kind of conflict-of-interest common sense. How do you justify it?

MICHAEL ARRINGTON: A little bit of background, I think, is important. I was an investor and an entrepreneur before I became a blogger. I sort of fell into blogging and realized I loved it. It is not a situation where I'm like, wow, you know, I'm an investor – I should start a really big blog so I can pimp my investments. It’s a situation that sort of involved and that I fell into without even realizing where it would end up. Today I have investments in four or five start-ups. The total of these investments is less than my monthly income, and my monthly income isn't that big. I think the important thing is that we're transparent and we are up front in saying, look, we have an investment in the start-ups, so take this with a grain of salt. Here’s a bunch of other coverage, positive and negative, about this story, and we link to competitors. Even then, I take a lot of heat.

BOB GARFIELD: At some point isn't it just better to divest yourself so that the issue just goes away?

MICHAEL ARRINGTON: Yeah. So I announced two months ago, three months ago, that I'm actually going to divest myself of any interest in any start-ups. The funny thing is, I think friend conflicts of interest – because I have so many friends that are sources – are way more powerful than the few thousand dollars I've invested in a couple of start-ups. Really, as long as people are accurately disclosing these conflicts in the articles they write, each and every one, I think at least the readers know what’s going on, and that’s the important thing.

BOB GARFIELD: All right. Mike, you've shamed me into confessing when you buy an On the Media tee-shirt or a coffee mug [SIGHS], we get a cut of the profits.

MICHAEL ARRINGTON: [LAUGHS] Well, as long as you disclose that in any articles about TechCrunch, I think that you’re going to be just fine.

BOB GARFIELD: And I always will. Mike, thanks very much for joining us.

MICHAEL ARRINGTON: Hey, thanks for having me on. I really appreciate it.

BOB GARFIELD: Michael Arrington is founder and co-editor of TechCrunch.