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The Math of TechCrunch, Part 2: Does It Play Favorites?

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Editor’s note:  Previously, in “The Math of TechCrunch, Part I: Is TechCrunch Still About Startups?” guest author Mark Goldenson analyzed more than 20,000 TechCrunch stories to find out how much we actually cover startups versus big companies.  In this post, he drills down by investors, authors, and market segments.  Goldenson is CEO of Breakthrough.com, a startup that helps people find a therapist and get online counseling. His email is mark@breakthrough.com.

In my last post, we learned that TechCrunch now covers ten times more startups than in its first year, but over half its coverage is now on large companies.  In this post, I look at how the coverage breaks down by investors, authors, and markets.

These findings are based on the CrunchBase API and TechCrunch’s 23,547 stories on 6,308 companies from June 11th, 2005 to May 11th, 2011.  Here is what I found.

1.  Companies funded by a prominent investors get covered twice as much

Investors often pitch that their value is more than money. Among the 2,596 covered companies with investor data in CrunchBase, there is support for this:

Rank

Investor Startups Covered

1

Y Combinator 121

2

Sequoia Capital 103

3

Accel Partners 102

4

First Round Capital 93

5

Draper Fisher Jurvetson 87

6

Ron Conway 80

7

Benchmark Capital 70

8

Intel capital 70

9

Kleiner Perkins 70

10

Index Ventures 70

11

New Enterprise Associates 62

12

Charles River Ventures 57

13

Bessemer Venture Partners 55

14

DAG Ventures 54

15

Founders Fund 52

16

Greylock 51

17

Redpoint Ventures 51

18

True Ventures 50

19

500 startups 50

20

SV Angel 49

 

Companies backed by these top 20 investors get an average of 2.3 more stories than companies backed by other investors. Though Y Combinator benefits from making more investments than most firms, its halo effect is especially strong: YC has 20% more companies covered than Sequoia.

Yet, the amount of money raised does not increase coverage:

Top 10 Most Covered Top 10 Most Funded
Company Total raised Stories Company Total raised Stories
Google  $25,100,000

3069

Clearwire  $5,620,000,000

5

Facebook  $2,335,700,000

1961

Facebook  $2,335,700,000

1961

Twitter  $360,166,000

1675

DeNA  $2,208,000,000

15

Apple

1656

Solyndra  $1,643,200,000

1

Microsoft

1007

Terra-Gen Power  $1,200,000,000

1

Yahoo

912

Groupon  $1,137,000,000

172

Android

563

Sirius  $1,055,750,000

4

MySpace

494

Fisker  $1,018,000,000

1

YouTube  $11,500,000

448

AOL  $1,003,000,000

327

Only one of the most covered companies – Facebook – is also one of the most funded. When all covered companies are graphed against their funding, the R-squared value that measures the correlation between coverage and funding is only 0.04 out of 1, indicating that the amount of funding does not strongly affect coverage.

(Funding of Apple, Microsoft, and several other top companies was not readily available but reportedly less than a billion dollars. This does not include public financing from IPOs; because CrunchBase has hundreds of public companies that are rarely covered, the results would probably not be significantly different.)

2.     TechCrunch writers do play favorites

Over its six years, TechCrunch has quintupled its number of writers. These are the most prolific writers over time (some no longer work at TechCrunch):

Writer

Stories

Michael Arrington

4079

Erick Schonfeld

3076

Leena Rao

2705

MG Siegler

2649

Robin Wauters

2502

Jason Kincaid

2261

Duncan Riley

838

Alexia Tsotsis

827

Mark Hendrickson

479

Nick Gonzalez

344

TechCrunch readers sometimes complain that writers favor certain companies. Does the data support this?

Somewhat.

All TechCrunch writers publish the most stories about the same ten or so large companies, with one story often covering multiple companies. Within these top companies, some writers do have favorites, and one data point stands out: two-thirds of MG Siegler’s posts are about Google, Apple, and Twitter. MG covers Twitter twice as much and Apple three times as much as any other writer. (The percentages in his chart add up to more than 100 because multiple companies are often tagged in the same post).

3.  TechCrunch covered Chatroulette more than five billion-dollar enterprise startups combined

CrunchBase categorizes the markets of companies and not surprisingly, TechCrunch’s most covered companies are tagged as general consumer web. This includes portals like Yahoo and AOL, browsers like Mozilla and Chrome, and other non-specific markets. The next most popular markets are social networks, search, and mobile. CrunchBase’s category data is messy and most large companies like Apple could be classified several ways so this data is not precise (see pie chart at top).

One finding is notable: only 2% of TechCrunch stories are about enterprise companies. Many of the web’s high-fliers are sexy consumer plays, but TechCrunch’s combined coverage of five separate billion-dollar enterprise startups—Atlassian (9 stories), Palantir (7), ExactTarget (7), Workday (5), and Service-Now (1)—is less than its coverage of Chatroulette’s penis garden (36).

I think that’s unfortunate. These companies have good stories. Atlassian was funded on $10,000 in credit card debt. Palantir is using data analytics to catch terrorists. Workday founder David Duffield, the billionaire founder of PeopleSoft who adopted six kids, lost PeopleSoft in a hostile takeover by Oracle.  Workday now competes against his former venture and has become a billion-dollar company in less than five years.

I know these products are seen as boring, but boring businesses are often better businesses and part of journalism’s art is making the boring sexy.

Disclosure: Breakthrough.com is headquartered in the incubator at AOL, TechCrunch’s parent company.