Update (April 2, 2007): For those of you still sending in emails pleading with me not to stop writing about startups – this was an April Fools joke. I do not in fact believe that there “just isn’t anything left to invent.” Thank you.
Tomorrow we will announce that we have acquired Philip “Pud” Kaplan’s FuckedCompany.com in a stock for assets transaction. The basic details of the transaction are included in a press release that will go out around 9 pm PST tonight, and Pud has also mentioned this on his personal blog. We weren’t going to announce this for another week or so (even though I hinted at it on CrunchNotes), but too many people know about it already and news of it was starting to leak (see Wired and CNET as well). I don’t want to be in a position again where other sites are breaking our news, so we’re announcing officially this weekend.
We’ve been working on this deal for months, it is good that we are finally able to close and announce it.
FuckedCompany first went live in 2000, chronicling failing and troubled companies in its unique and abrasive style after the dot com bust. Within a year it had a massive audience and was getting serious mainstream press attention. As the startup economy became better in 2004, much of the attention the site received went away. But a large and loyal audience remains at the site, coming back day after day for its unique slant on the news. At its peak, FC had 4 million unique monthly visitors.
Since FC focuses on the negative news coming out of startups, and TechCrunch tends to focus on the positive, this combination may seem odd. But the sites are in fact extremely complementary. For example, the audiences are about equal in size and have very little overlap. So from day one we will double our reach and traffic.
Reasons For The Merger
The market moves in cycles, and its clear that we are at the tail end of the current boom (disregard recent statements I’ve made to the contrary). Thousands of startups launched in the last year and a half, and well over a billion dollars was invested in them. Even in good times, 90% of startups fail. But recent events make me believe that even a 10% success rate might be optimistic going forward. Some recent trends that alarmed us:
- Smart people are saying the end of the current boom is near, and these guys are rarely wrong in their predictions. See, for example, Peter Rip’s recent post “Web 2.0 – Over and Out.” Peter really nailed the analysis in that post – and it’s hard to argue with any of his conclusions.
- The TechCrunch DeadPool, where we track failed startups, is growing exponentially. If the failure rate of startups continues to grow this fast, we will be at a point where failures will begin to outnumber new funded startups. Since 9/10 startups fail, by focusing on the negative we will have much more content for the site.
- While plenty of startups are launching, we aren’t seeing any actual innovation any more. There just isn’t the “wow” factor around new startups like in 2004/2005. That does not bode well for the future – there just isn’t anything left to invent.
- We’ve noticed a significantly higher number of negative comments on TechCrunch relative to past periods. Our readers are unhappy; they want a change in editorial tone.
Also, the current trend in blogging, led by Valleywag and others, is to “go negative first, and ask questions later.” That tabloid-style journalism tends to generate a lot of eyeballs and, subsequently, advertiser dollars. This is something we just can’t compete with. By acquiring FC, we can go more negative faster than anyone else out there, when and if we need to.
With the combination of these two companies, we can now effectively cover a startup from the idea stage, through the hype and funding stage, and then cover its inevitable bankruptcy and liquidation as well.
What To Expect
Integration will occur slowly. The FuckedCompany site has a notice on it about the announcement and will soon be upgraded to more of a TechCrunch look and feel (white background instead of the previous black and red, and a new logo that matches our font and style. For now, though, we are keeping the sites separate and each will continue to operate normally. Deeper integration will occur over time.
Many of our readers still enjoy reading about new startups, and we won’t stop covering them. But we will likely move new startup coverage, which will be a secondary consideration going forward, to a new blog over time. TechCrunch and FuckedCompany will begin to mirror each other’s content, and at the appropriate time the brands and sites will be merged.
Please Give Us Your Feedback
It’s important that we continue to tweak our business model to ensure that we stay relevant and publish compelling content going forward. That’s the main reason this transaction occurred – we are seeing the end of an era and are acting on what we are seeing.
I know our reasoning won’t satisfy every one of our readers, and I understand that this is a lot of change coming very quickly. I want your feedback to ensure that the merger is done tastefully and properly. Leave your comments below, or send me a private email (my email address is on the About page). I definitely want to hear your opinions.
When TechCrunch first launched in June 2005, there were no blogs dedicated to covering new startups. Today, nearly two years later, there are dozens of excellent blogs doing this, and mainstream media is paying attention as well. Entrepreneurs with new ideas will always have a way to reach potential users and customers. They just won’t be able to do it here any more.
Update (3/31/07 2:52 PM PST): We’re gotten many requests for the text of the press release. It isn’t officially going over the wires until tomorrow, but i’ve posted it below. It’s still in draft form.
TECHCRUNCH TO ACQUIRE FUCKEDCOMPANY
Will Roughly Double Monthly Audience and Create New Opportunities For Expansion
ATHERTON, Calif., April 1, 2007 – TechCrunch announced today that it has agreed to acquire the assets of FuckedCompany, a website that features breaking stories on dot com company failures. Assets to be transferred in the transaction include the domain name fuckedcompany.com, all content on the site and other assets related to its business.
Following the completion of the transaction, the unique monthly visitors to the combined sites will be roughly double what TechCrunch.com achieves currently.
“We’re thrilled to be part of the TechCrunch team,” said Philip Kaplan, the founder and original editor of FuckedCompany. “We see this as the natural transition for our company as TechCrunch follows what is happening in the world of technology and start ups and Fucked Company tracks what happens when they fail. The combined company will be able to grow and stay relevant no matter what the current economic forecast.”
“I’m excited to be working with FuckedCompany, a website that helped define the extravagance of Web 1.0, and which serves as a constant reminder to entrepreneurs and venture capitalists that the market moves in cycles,” said Michael Arrington, founder of TechCrunch. “As the Web 2.0 movement cycles down, we can now focus on covering those startups that clearly aren’t going to make it to a liquidity event.”
The transaction is expected to close shortly. More details are available on www.beta.techcrunch.com and www.fuckedcompany.com.
Founded in 2005, TechCrunch is a leading network of weblogs and other sites focused on providing news, analysis and services around new technology startups. The TechCrunch network delivers more than 4 million monthly page views to 1.5 million unique month visitors. The TechCrunch network includes Techcrunch.com, a weblog focused on new web startups, CrunchGear.com, a weblog focused on new technology gadgets, MobileCrunch, a weblog focused on mobile technology, Japanese and French versions of TechCrunch.com, and Crunchboard, a job listing site.
Founded in April, 2000, Fuckedcompany was the premiere news website covering the first dot-com bust. At its peak, Fuckedcompany was visited by 4 million unique users monthly and was named “Site of the Year” in 2000 by both Yahoo and Rolling Stone, and was #6 is TIME Magazine’s “Best of 2000.