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Web 2.0-style Conflict of Interest

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When is a conflict of interest not a conflict of interest? When it involves a Web startup, apparently. Both the Wall Street Journal and ZDNet have written about Vator.tv, and how one of the key players behind the company — which does interviews with CEOs of various startups — is Bambi Francisco, the wonderfully-named tech writer for Marketwatch.com.

bambi.jpg

There are a couple of obvious problem with this, one of the first being that interviewing CEOs of startups is Bambi’s actual job, and now she is starting a company to do that separate from Marketwatch. But it gets worse: according to both the WSJ and ZDNet, Ms. Francisco owns a stake in Vator.tv, and her main partner and financial backer in the venture is none other than Peter Thiel, a cofounder of PayPal and now a venture capitalist. Bambi’s coverage at Marketwatch has also mentioned both Mr. Thiel and some of the various technology companies that he has invested in or advises.

Could this be any more clear-cut an example of conflict? I don’t see how. And yet, Marketwatch editor David Callaway tells ZDNet that:

“the rigid rules of the past may not always apply to new media. Is there a potential for a conflict in Bambi’s case? Yes. Do I think we can avoid it? Yes.”

Matt Marshall of VentureBeat seems to feel that Ms. Francisco has been wronged in some way by the coverage of this story, and that it is “a non-scandal,” and many may agree with him. I am not one of them. However, he also comes to what I think is the correct conclusion: Bambi has to leave Marketwatch (to avoid what he calls “complications,” and what I would call conflicts). Either that or she has to sever her financial relationship with Vator, or make Marketwatch a partner in the venture.

An internal memo from David Callaway to Marketwatch staff is here, but it doesn’t do much to clarify the situation (at least not to me). Let’s review one thing that Mr. Callaway seems to have missed: A conflict of interest doesn’t exist or not exist because *you* say it does — it’s something that your readers or viewers get to decide on. And in many cases, the appearance of a conflict is just as bad as having an actual conflict. Staci Kramer at PaidContent is right — making this about old vs. new media is a copout.

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Web 2.0-style Conflict of Interest
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