Conflicts of interest and business journalism

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Gordon Crovitz, the former publisher of The Wall Street Journal, writes in Monday’s Journal about conflicts of interest in the wake of the brouhaha over whether TechCrunch founder Michael Arrington can invest in startups and still write about them for the tech news site.

Crovitz writes, “Put another way, some of the smartest venture capitalists have concluded that they could get inside access to the best startups by becoming investors alongside Mr. Arrington. This is a tribute to TechCrunch, even if it is counter to how other information brands, like the Journal, build value. It may be evidence of a change in what builds trust, at least among investors and perhaps readers.

“Regardless of technological change, one constant is that information plays the key role in driving markets. Investors need confidence that they are getting the facts. The Latin warning ‘caveat lector’ — let the reader beware — applies even more in the digital world.

“This is an era of many different sources of information and business models. Readers can decide if there is even enough room for a brand with a reputation for being so close to trades that it’s hard to tell where news ends and investing begins.”

Read more here.