TechCrunch founder and editor Michael Arrington is in "tense severance negotiations" with AOL, and the talks could pan out in one of two ways. In AOL's best case scenario, they offer Arrington a ton of money, and he leaves the site by himself to pursue his venture capital projects or whatever makes him happy. In its worst case scenario, Arrington flies off the handle and attempts to sabotage TechCrunch. And that would be very bad news for AOL chief executive Tim Armstrong.
Along with the Arrington fiasco, AOL chief executive Tim Armstrong has been dealing with a shower of criticism over a declining stock price, whispers of selling the company to private equity and his floundering interactive advertising idea "Project Devil." After reportedly keeping his new star Arianna Huffington in the dark about the CrunchFund venture project--a project she promptly vetoed which sent Arrington packing--Armstrong is looking scattered, and his future at the company may depend on how he concludes the TechCrunch saga. Arrington already suggested two solutions that would keep him from leaving: AOL could renew TechCrunch's editorial independence from AOL (read: Arianna Huffington) or "sell TechCrunch back to the original shareholders." The fact that Arrington and AOL are discussing the terms of their divorce is a clear sign that these ideas did not fly, and Armstrong is making a power play.