Newsweek writer calls Silicon Valley journalism a 'cesspool'

Newsweek writer calls Silicon Valley journalism a 'cesspool'

Summary: Some Silicon Valley journalists are accused of making deals with VCs to write favorable stories about their companies.

TOPICS: Banking

Dan Lyons, a columnist for Newsweek, has written a scathing attack on Mike Arrington and MG Siegler, who run CrunchFund, a small VC fund.

The former editor and his reporter at TechCrunch, a leading AOL tech news site, are accused of being part of a trend among Silicon Valley journalists to raise money from investors in exchange for favorable PR services.

Here is the formula:

First you establish yourself as an "influencer" by posting a lot of noisy stuff on a blog and building an audience. Then you need to "monetize" your influence. You tell all the VCs in the Valley that you are starting an "angel fund," and you ask each one to give you, say, $500,000.

They go along because

(a) $500,000 is pocket change to these guys -- so small, in fact, that they don't care if they lose every penny of it; and

(b) you're an influential hack and they don't want to piss you off; and

(c) they figure you can maybe write nice things about their portfolio companies, which would be especially useful if/when one of their portfolio companies gets caught up in some scandal; and

(d) if any independent journalists write something critical about one of the VC's portfolio companies, you can use your influential personal blog to savagely attack those journalists and try to discredit them.

This is exactly what happened recently when Path, a startup in which CrunchFund is an investor, was criticized by Nick Bilton, a reporter for the New York Times, about Path's secret spying on users' address books. Mike Arrington launched a "blistering critique" of Mr Bilton, calling him a pit bull.

Almost before you could stop throwing up in your mouth at the idea of Michael Arrington accusing a Times journalist of being less than noble, Arrington's partner at CrunchFund, MG Siegler, weighed in with his own attack...

I'll give them this much. They're good at what they do. Siegler especially is a nasty little ankle-biter who has developed some level of expertise in launching ad hominem attacks. He did one on me a while back. Then he did one on Josh Topolsky at The Verge.


He takes on another Techcrunch alumnus, Sarah Lacy and her new site PandoDaily, saying that she is working the same type of angle as CrunchFund, taking investments in exchange for friendly coverage.

He doesn't call it blackmail, but Mr Lyons quotes an unnamed VC, who tells him that some tech blogs have business models that seem to be based on "hush money."

Mr Lyons is right to point out the bias in the posts by Mr Arrington and Mr Siegler, but he unfairly tars all local media when he writes:

This is what now passes for "journalism" in Silicon Valley: hired guns and reformed click-whores who have found a way to grab some of the loot for themselves. This is perhaps not surprising. Silicon Valley once was home to scientists and engineers...

Now it is being turned into a silicon cesspool, an upside-down world filled with spammers, liars, flippers, privacy invaders, information stealers -- and their grubby cadre of paid apologists and pygmy hangers-on.

Hit men, click whores, and paid apologists: Welcome to the Silicon Cesspool » Real Dan Lyons Web Site

There's plenty of good journalism in Silicon Valley. Mr Lyons is not from around here and is clearly looking in exactly the wrong places but most people know where to go and who to read.

Mr Lyons should also take a look at New York City's tech media scene. VCs might be looking for favorable coverage there too.

Business Insider, edited and founded by Henry Blodget, a former high flying Wall Street analyst, raised $7 million in September 2011. This followed the publication's first profitable year -- making $2k on revenues of about $5 million.

Leena Rao reported:

The round was led by new investor IVP, writes the site's co-founder and CEO Henry Blodget. The company had previously raised funding from RRE Ventures, Allen & Co., Marc Andreessen, Gordon Crovitz, Ken Lerer, and others. This latest round bring Business Insider's total funding to nearly $14 million.

We know how much VCs love low margin businesses -- so what else are they looking for?

Topic: Banking

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  • No surprises

    Press release journalism has been rampant in lots of places, not just the tech beat.
    John L. Ries
  • Pulleeezzeee

    In about 50 years of independent writing, much of it about cars, I have seen this type of attack, whack and hack journalism so many times that I've developed a layer of callus on my brain when it comes to this type of writing. One has to be a "real" writer in New York, I guess, to tell the rest of the world what's wrong with us while us poor writing "folk" in the boonies are just bagmen/women, techwhores and anything else that will get us something for nothing. Please this is all just noise.
    • Nevertheless...

      @itsnotyourbusiness <br>...there do seem to be a lot of hacks out there, which is a good reason to read critically and to get one's news from multiple sources.<br><br>Note that Tom also says "there's plenty of good journalism in Silicon Valley" (he's based in the Bay Area himself). It's not like he's claiming that all, or even most tech journalists are on the take. But just as bad money tends to drive good out of circulation (Gresham's Law), corrupt (or even lazy) journalism will tend to drive out good journalism if unchecked.
      John L. Ries
  • RE: Newsweek writer calls Silicon Valley journalism a 'cesspool'

    Of course this is happening, and no doubt on a larger scale than we see. But it is certainly not a Valley exclusive. What is, indeed, right is the practice is pure s$%t. Particularly at a time when that money could support many more real entrepreneurs and innovators who could take a small percentage of it and create more great businesses and jobs. The Sand Hill Boy's Club has never been a well-kept secret.
  • Ummm....

    "Click-whores" is too harsh, huh?
    There are a lot of seemingly and purposefully inflammatory article headers right here on ZDNet which appear to be aimed to cause readers to click on the articles and "read" them.
    Are you [i]sure[/i] it's too harsh?
    • RE: Newsweek writer calls Silicon Valley journalism a 'cesspool'

      @Zorched :-) Thought I was the only one pissed about that.
  • RE: Newsweek writer calls Silicon Valley journalism a 'cesspool'

    Are an influx of laziness, sensationalism, ego and lack of backed talent at least partly to blame?... perhaps. I was often accused of holding "favored" suppliers to a higher standard... perhaps (though I'd like to believe that I imposed a fair standard). The quality of industry wares DID improve significantly, but was it merely a coincidence?... perhaps... and perhaps not. Same here.
  • Its sickening, isn't it

    And its hardly limited to tech media. Time & again you see a lone fighter against corrupt practices having his reputation tarnished by the media. Its so easy.

    I don't agree with the underlying theme of this article which seems to say ' hey, we are not all like that, and you on the other side are not perfect either'! That's not the point. There are good and bad guys on every side.

    Corruption is one of the greatest bottlenecks to society's growth. One way to hold it down is by the good guys coming together to hammer the bad guys. It does not matter whether the bad guy is on your side of the fence or the other.

    The tech sector would be an easier place to do this, since people are smart enough to know what works and what does not, and reputations count. Its far worse in places where information does not flow so easily.
  • Newsweek

    Not that what is happening with these blogs is ok, but Newsweek claiming anyone else's journalism is a 'cesspool' is like crap claiming dung smells.
  • Want Proof? See Dave McClure's recent tweets

    Couldn't agree more. Dave McClure of 500 Startups was mad at TechCrunch last week and tweeted that he should have invested in Pando Daily so that he could control his story. What more do you need to know the mind of investors..
  • ideafaktory podcast with Dan Lyons - Liberating Anonymous Drones

    If you want to listen to a discussion on this topic, I just spoke with Newsweek/Forbes writer Dan Lyons (aka Fake Steve Jobs) about peddling influence. <a href="" target="_blank" rel="nofollow"></a><br>Dan also wrote a scathing piece about this that we discussed. Face it, there's no money in writing, so the only thing left to sell is traffic and attention, which is devious, brilliant, and subversive. That puts pressure on everyone else to think critically - and just assume that everyone has a bias, sometimes a financial one.