Tech Crunch announced yesterday that Michael Arrington is leaving the site for AOL-backed CrunchFund. (Credit: TechCrunch, screenshot)

Michael Arrington announced yesterday that he was leaving TechCrunch after more than a week of confusion about his job and a new AOL-backed investment fund.

TechCrunch describes itself as a six-year-old “technology media property, dedicated to obsessively profiling startups, reviewing new Internet products, and breaking tech news.”   Michael Arrington founded the site and sold it to AOL in the fall of 2010.

On Sept. 1, AOL announced its new CrunchFund. the fund is described as “an early stage venture capital firm founded by Michael Arrington and Patrick Gallagher.  The fund invests in and works with information technology companies at any stage but is primarily focused on seed and early stage investments.”

Since early September, the fund and TechCrunch have been in the news as media outlets, the site, and its staff tried to determine exactly how that fund’s creation affects the site’s editorial side.  The fund and Arrington’s role would present conflicts of interest when the site’s staff reports on companies the CrunchFund invests in. And, the lack of certainty regarding Arrington’s future within AOL made things all the more complicated.

In a Sept.1 story, the Wall Street Journal reported that AOL/Huffington Post’s Mario Ruiz stated “Mike will run the fund and will continue to write for TechCrunch, but will have no editorial oversight.”

The next day, Sept 2, reports varied with Business Insider reporting that AOL’s Ruiz said Arrington is “not employed by AOL.”

Business Insider also reported that day that Huffington e-mailed to inform that:  “Mr. Arrington is not being paid by TechCrunch, he does not report to TechCrunch editors, and he does not report to Arianna Huffington or other AOL Huffington Post Media Group personnel.”   That report also noted that Arrington will be working with AOL Ventures and that he may blog unpaid.

And then later, AOL corporate communications SVP Maureen Sullivan is quoted as telling Business Insider “Michael Arrington is still employed by AOL” (AOL Ventures)

The New York Times’ Sept. 4 story by David Carr explained that Arrington created the CrunchFund “to finance some of the technology start-ups that his site wrote about.”   Then AOL “invested about $10 million  in his fund.”

Carr quoted Sept. 1 comments from AOL’s Tim Armstrong about CrunchFund.

“TechCrunch is a different property and they have different standards.  We have a traditional understanding of journalism with the exception of TechCrunch, which is different but is transparent about it.”

He also quoted Huffington on Sept 1 saying “Michael has stepped down … and is no longer on the editorial payroll effective immediately.” She added  “It is very, very clear that they are distinct entities and Michael will have no influence on coverage.”

Meanwhile, TechCrunch’s employees defended the site from criticism and comments about the fund.  In a Sept. 2 post, TechCrunch criticized AOL’s Armstrong’s quotes about TechCrunch’s standards.  TechCrunch suggested Armstrong comment instead that:

“Despite the name — which in hindsight was a bone-headed choice — it’s important to understand that ‘the CrunchFund’ is a simply an extension of Mike Arrington’s existing angel investing activities. None of the writers and editors of TechCrunch has any influence over, or stake in, the fund and hopefully it goes without saying that it will have absolutely no impact on the day to day editorial independence of TechCrunch.”

TechCrunch added: “To be absolutely clear about this: the CrunchFund is Mike and Tim’s baby. It has nothing to do with anyone else at TechCrunch. The first time most staffers heard about the fund, and AOL’s involvement in it, was when it was announced in the [New York] Times.”

On Sept. 6, Arrington wrote on TechCrunch about  AOL’s “multiple conflicting statements” and the “confusion.”  Arrington stated:

“My employment relationship with TechCrunch and AOL is not the core issue. The only issue being discussed at this point, the only issue that matters, is TechCrunch editorial independence and self determination. Regardless of my role, if any, going forward.”

He claimed Tech Crunch “no longer has editorial independence” and stated that he has asked AOL either for “reaffirmation of the editorial independence promised at the time of acquisition” or to let TechCrunch’s “original shareholders” buy the site back.  He wrote that if AOL didn’t agree, he wouldn”t “be a part of Tech Crunch going forward.”

Also on Sept. 6, TechCrunch’s MG Siegler wrote “TechCrunch as we know it may be over.” He commented that “no one knows much of anything” that is going on or will go on at TechCrunch.

Siegler called the past week at TechCrunch “insulting” and a “nuclear situation.”  He dismissed criticism or suggestions that Arrington’s investments influence or present conflicts of interest in TechCrunch’s reporting.  Siegler added that he has “a really bad feeling” about the future, especially since it’s unknown what Arrington’s current position is with TechCrunch or AOL.

He argued that TechCrunch would “probably” be fine without Arrington, but “it will not be the same.”

Siegler also directed to his Sept. 5 personal blog post in response to the New York Times report. He stated that “the concept of an ‘editor’ at TechCrunch is essentially just a title and nothing more.”  He noted that “with a few exceptions (mainly for newer writers), no one  person even reads posts by any other author before they are posted.”  He defended that lack of “top-down management” by nothing “we’re fast and furious.”

Fortune reported Sept. 7 that Arrington had been or would be fired.  Fortune didn’t attribute the news to anyone.

All Things D’s Kara Swisher noted Sept. 8 that “at least one” TechCrunch employee, Paul Carr, has stated he would “resign if Arrington is not allowed to handpick his successor.” Gawker noted that Carr’s “defiant” post was taken down from the website, only to be later re-published after apparently undergoing editing.

Finally, everything has seemed to sort out though. CNET reported Sept.12 that Arrington “has officially severed ties”  with TechCrunch. The announcement was made on TechCrunch’s website and “confirmed” by Arrington. “Former co-editor Erick Schonfeld will take over as the sole editor of TechCrunch,” according to CNET.

AOL’s statement, published here on TechCrunch, states

“The TechCrunch acquisition has been a success for AOL and for our shareholders, and we are very excited about its future. Michael Arrington, the founder of TechCrunch has decided to move on from TechCrunch and AOL to his newly formed venture fund. Michael is a world-class entrepreneur and we look forward to supporting his new endeavor through our investment in his venture fund. Erick Schonfeld has been named the editor of TechCrunch. TechCrunch will be expanding its editorial leadership in the coming months.”

CNN added that Arrington “will now focus full-time on his venture fund, which AOL says it will remain an investor in.”

iMediaEthics wrote in May after Arrington announced that after two years of not investing, he had decided to invest in venture funds again. AOL indicated that Arrington and TechCrunch would be considered an exception to AOL’s ethics policies.   Arrington had stopped investing in 2009 to avoid criticisms of conflict of interest.  He denied in May of this year that he started investing against because he was “trying to get fired from AOL,” which bought TechCrunch last fall.