Tonight the Wall Street Journal has an explosive (free) story on an issue that has been non-stop whispers in some blogging circles for weeks. And that is? The allegation that some high-profile bloggers who simultaneously advise startups and promote them on their blogs have undeclared conflicts of interest.

The WSJ story focuses on FON, the recently-funded Spanish wireless company that got so much blog-o-sphere attention last weekend for its just-closed financing. But as the WSJ story points out, nine (!) members of FON’s U.S. advisory board helped build the buzz by writing positively about FON on their blogs, people like Dan Gillmor, David Weinberger, and Wendy Seltzer. While Gillmor and Weinburger disclosed on their sites that they are advisors to FON and might be paid by the company, the WSJ says that none of the other advisory-board members disclosed that they might one day get cash from FON.

The story continues, citing TechCrunch‘s Mike Arrington as another blogger (albeit with no FON connection) who “occasionally serves as an advisor to companies he writes about”, including sometimes receiving stock. To be fair to Mike, he says in the piece that he generally doesn’t write about companies once he becomes an advisor.

More broadly, this is serious stuff, and it is a reminder to all of us that whether you call yourself a pro or not, with a large online audience comes responsibility. You’re kidding yourself — and playing fast and loose with your readers — if you think otherwise.

And what’s the policy here at my site? I almost never write about companies in which I have a financial interest (to the point that I get grief for my reticence from management!). And when I do write about anything in which I have a conflict, real or perceived, I disclose it every frigging time, as I’m sure most readers of this site are irritatedly aware.


  1. Paul,
    Great find! If bloggers are getting some kickbacks, I say its about time. Most bloggers are doing this on their own and deserve compensation for their efforts. As for conflicts of interest, readers beware! Mike Arrington and others do a superb job of bringing new startups onto the radar screen. It is up to the readers to make their own value judgments and informed decisions about recommendations.

  2. I was persuaded by Paul’s post, and about to give 3 cheers for transparency, when I saw Scott’s brilliant comment. Now my only problem with conflicts of interest is that I don’t have enough profitable ones.

  3. Couldn’t agree with you more. Reminds me of the days before Section 501 of SOX.

  4. Fascinating. It seems to be a way of monetizing attention for A-listers.

  5. Seth — I read your interesting theory on your blog. As one venture guy put it to me recently, “What’s the business model for that blogging stuff?” I think you just gave a plausible (highly conflicted) answer.

  6. Well, Marc Canter perceived a conflict when he said (in a podcast) that you criticized structured blogging having not disclosed you invested in some kind of structure-extracting super scraper company of some sort. (I’m paraphrasing.)
    Was Marc mistaken about your investment or do you disagree about the conflict? This isn’t supposed to be a gotcha, I’m actually curious because his remark has since affected how I read your blog.

  7. Hey Gabe – Nope, no idea what Marc’s talking about. Wish I was conflicted with an investment in a “structure-extracting super scraper” company! And if I was, I’d disclose it ….

  8. Good to know. Too bad you can’t leave comments in the middle of podcasts, or track mentions in any reliable way…

  9. Paul, thanks. Anyway, conflicts are sooo Old-Media. It’s A New Era. :-) (… of attention-selling, both wholesale and retail).

  10. Hey Paul, I am going to write more about this at crunchnotes, but I have two quick observations. First, Rebecca, the WSJ reporter, clearly had an angle she was pushing and took only the part of my conversation that fit her model into the story. Also, the fact that every single blogger disclosed the conflict tells me that there’s no real story here.
    What is the story? The WSJ is scared shitless of bloggers.

  11. Hey Mike — I don’t disagree. While conflict of interest in the blog-o-sphere is a legitimate concern, this version of the story felt more than a little pre-cooked.

  12. Quote “promote them on their blogs have undeclared conflicts of interest.”
    Which of the persons mentioned in the article did not declare their interest?
    Go on tell us Paul!
    Fred F.