The reason startups do press releases about funding rounds is that news outlets write about them. The reason news outlets write about them is that people (like those found on Hacker News) read, upvote, and comment on those articles.
Most startups would prefer to talk about their product, but that's a much harder sell as news.
I think that's right, but I do think it's also changeable, and that there is demand for more product-focused news. Part of the problem (imo, of course) is that funding-related news is just easier journalism: reporting a funding round is often a very loose gloss on a press release, while reviewing products requires work to identify which products are worth reviewing, how they should best be approached, maybe even data analysis.
I think people would read that if there were more of it, though. People on HN do vote up even fairly cursory product-focused articles when they appear, e.g. a blog post doing a comparison of Heroku and a competitor. I see the funding-related stories as more just a least-effort excuse to talk about a startup: someone (usually TechCrunch) doesn't really have the time to spare doing a proper product review, but throws out a little blurb about funding, and opens up the floor for discussion about the startup. That then gets voted up on HN because people are curious and want to discuss it, and the TC blurb presents an opportunity to do so, even if it isn't itself that compelling as an article.
Now if TC gets the same hits from those low-effort articles, why would they put in Consumer Reports style work doing more in-depth product-focused reporting? I would guess there's little monetary justification for doing so, unfortunately.
That's passing the buck and refusing to take responsibility for their own actions.
News places will reprint anything that will get views, and people will click through on anything sensational. So is that a valid excuse for engaging in GoDaddy-ish behavior?
No. You have to take responsibility for what you choose to do.
If you choose to release press releases purely about your VC funding round instead of talking about your product; that's your choice, nobody else's.
And if you talk about your product and nobody is interested in it; you should take that as a sign.
Startups certainly "take responsibility" for announcing and heavily publicizing their fundraising rounds. It's a strong signal that your company is on a path to success (not the only path) and you certainly want it spread as far and wide as possible.
I don't care if some people think my funding announcement less valid than other industry news, or somehow "less earned." The fact that there is a market for that kind of news means that enough people derive value from it. Not all news is valuable to all people: celebrity news and financial news have two very different audiences. If an investor is accidentally exposed to celebrity news at the grocery store checkout line, is it the fault of the celebrity?
There's a pretty big difference between being 'GoDaddy-ish' and releasing press releases about funding rounds. GoDaddy style behaviour is A Bad Thing in and of itself. The only thing that's bad about funding round press releases is that they're boring. But since people print them and are apparently interested in reading them... well, OK.
Press releases about funding don't reveal a lack of moral fibre or dubious ethics. They just reveal that the organisation is savvy enough to do something that works (een if it is pointless).
I agree there's a difference, I was just using it as an example to illustrate a point; that the fact that people will print something is not an excuse for that behavior.
Most startups would prefer to talk about their product, but that's a much harder sell as news.