Update: Sources tell CNBC that AOL paid $40 million. We’re guessing the $25 million figure is cash and the rest is an earnout.
Earlier: AOL has told insiders that the company is only paying $25 million for TechCrunch, a second-hand source tells us.
Another source close to AOL thinks the price is “on the lower side vs. what some have said,” which would be consistent with $25 million.
If true, this would be a surprisingly low figure. TechCrunch boss Michael Arrington recently pegged the company’s revenue at “nearly $10 million,” and $25 million would only be 2.5X this number (versus 6X for a recent public-market buyout for Internet Brands).
It’s possible that the $25 million is just an initial payment and that the price could include earn-outs for performance and retention.
(If we were negotiating this deal for AOL, we’d certainly have included an earnout, as the company’s value could quickly disintegrate without it).
We’ll update if we get more info.
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