Conflict of Interest 3.0: the winner of TechCrunch's vaunted Disrupt Battlefield startup competition is financially backed by TechCrunch's pugnacious founder, Michael Arrington—it is a matter of pure coincidence that Arrington judged the competition. How much longer are we going to take this seriously?

Layer, the winning startup, will now reap a "$50,000 prize and the coveted 'Disrupt Cup,' a wealth of press exposure and new open doors." All of the above directly benefit Michael Arrington, a man for better or for worse integral to TechCrunch's public image, despite no longer playing an editorial role at the website. But his tertiary duties are still strong: his combative interviews draw crowds at the Disrupt conference, to the tune of $3,000 per ticket. Startups are more inclined to apply for the Disrupt competition if they know they'll have the ear of a prominent investor. And Arrington's presence provides more blog grist for TechCrunch, which can now of course fawningly cover Layer as a conference champion. The conflict is "disclosed" in a post announcing the winner, as if that somehow neuters it, but TechCrunch readers were long ago desensitized to the presence of conflict disclosures. You could disclose an incoming tsunami and we'd all just click through.

The whole thing is clever vertical integration: found the website that covers the startups you invest in, let that website throw competitions that you yourself can judge, providing free exposure and clout for these same investments. He's a true Carnegie of pixels, this Arrington!—but it's a bit harder to sell murky apps than steel. We'll see if this crop of winners fares better than its predecessors.

Photo: Steve Jennings/Getty