Is TechCrunch doomed by payola scandal?

Late last week, tech biz bloggers were shocked — and a few were cruelly happy — to read that TechCrunch founder Mike Arrington had fired 17-year-old intern, entrepreneur and Internet fameball Daniel Brusilovsky. Arrington said the teenage overachiever had accepted a computer from a company in exchange for coverage on TechCrunch. Brusilovsky also admitted, Arrington said, to asking a different startup for a MacBook Air, which led that company to complain to Arrington.

Not only did Big Mike cut Brusilovsky from staff, he removed all of Daniel’s posts — I counted 70 of them in Google’s cache — and blogged a candid and legally-vetted description of the events, titled “An Apology to Our Readers.”

So of course the hot topic of discussion among local journalists over the weekend was, is TechCrunch’s reputation shot now?

TechCrunch isn’t a newspaper, so its staff aren’t bound by the well-established and very strict boundaries given to print news writers. Things are different at the papers. I challenge you to try to buy dinner for a New York Times reporter.

Bloggers, by contrast, have no industry standards. A few years ago, Microsoft and AMD sent a bunch of them free high-end laptops with “no strings attached.” Of course, there were strings attached: The bloggers, mostly Mac users, would show up at meetups, conferences and coffeehouses toting bright red Ferrari-branded laptops running Windows Vista. Great advertising.

Brusilovsky hasn’t said it, but I have to wonder if the people who kept their laptops set the stage for Daniel to think it was cool to ask for one.

Despite all that, anyone in public relations knows that what matters isn’t whether Brusilovsky was conflicted between writing what he felt was right, and wanting a MacBook. What matters is the perceived conflict of interest, as perceived by TechCrunch readers and the small but rabid tech-startup community that follows Arrington’s every move.

To them, Brusilovsky’s bargaining wasn’t just dishonest, it was sleazy. The guy didn’t ask for a $275 netbook, he asked for a $1,500-plus MacBook Air. Did he ask for the solid state drive, too?

(You can watch Brusilovsky tell his version of the story in this video interview and summary post. He says he received “products” from Intel as part of their Intel Insider marketing program, and claims a friend at a startup sent him an iMac as a thank-you for a professional introduction, not for a TechCrunch post.)

In some ways, Arrington did himself a disservice by taking an issue that could have been dealt with quietly and publishing it as news on his own site, with a cross-post to the Washington Post. But overall Mike’s apology proves his Internet instincts. Had he tried to hush up the problem, it would have been blown up into an even bigger scandal by gossipy reporters who would have figured it out a lot quicker than Woodward and Bernstein outed Richard Nixon. Breaking the news himself was the right way to go.

The online reaction to the incident is a dual-core pile-on: “Arrington is ultimately to blame” runs side-by-side with “Arrington should have paid his interns more.” Having written for much bigger publications than TechCrunch for nearly fifteen years, I have an opposing view: TechCrunch is totally safe, for reasons that have nothing to do with how Mike handled things.

I’ve been a regular contributor to several pubs that have been bitten by dishonest writers. At Wired News, prolific reporter Michelle Delio was investigated for fabricating quotes from sources, and possibly making up the sources. Slate ran an unforgettable story on the sport of monkeyfishing that turned out to be, in the editors’ own words, “a complete lie.” I also wrote for The New Republic, infamous for Stephen Glass‘ hilarious, shocking, and totally made-up stories.

By contrast, TechCrunch’s problem is a lot smaller. One post about an unnamed tech company may have been written in exchange for a computer. There might be a couple more written under similar terms. These posts themselves didn’t do any great harm to anyone, not compared to Stephen Glass’ portraits of hackers and young Republicans who didn’t even exist, stereotype-cementing stories that made the rounds in Washington, D.C., in the era when President Clinton read The New Republic aboard Air Force One.

What effect did these scandals have? The New Republic is the only publication that still suffers from Glass’ dishonesty. As for Wired and Slate, I’ve found over the years that self-styled avid readers of both sites are completely unaware of either scandal. Wired appended 24 of Delio’s stories with a note that there were doubts about her sources. How many people have ever found those old, stale tales? Try getting them from Google without knowing what you’re looking for.

I’m sure most TechCrunch readers didn’t click on “An Apology to Our Readers.” I didn’t. I skipped past what I presumed was an apology for problems with the site, rather than with its reporting. Comments must have broken, I thought. Far more people would have read the post had its title been “TechCrunch Fires Intern for Accepting Bribes.”

But the bigger reason TechCrunch is safe is that it takes a lot more than one intern to discredit a publication. The Delio incident didn’t ding Wired’s credibility at all, except among a few bitter bloggers who already hated Wired anyway. Likewise, studies have found that blatant “advertorial” content, where a sponsor pays for specific coverage, actually works on most readers. Brusilovsky’s behavior is inexcusable, but his actual effect on TechCrunch will be near nil in a week or two. Readers don’t know, and more important, they don’t care.