AOL says Patch continues to double its revenue from last year
AOL | All Things D | paidContent | Ad Age
In its second-quarter earnings report, AOL says Patch "grew traffic and engagement at double digit rates year-over-year and quarter-over-quarter" and that revenue more than doubled in the second quarter compared to a year earlier. Patch is on track to make $40 million to $50 million this year, though it has invested more than $200 million so far, according to paidContent's Staci Kramer.
The company reported in May that its first-quarter revenue was double that of last year's, too, and that its traffic was up 55 percent from March 2011 to March 2012.
In an interview with Ad Age's Jason Del Rey, AOL CEO Tim Armstrong described an upcoming shift in Patch's strategy, expanding from its current focus on hyperlocal news to listings and commerce.
As for the listings business, he was asked if Patch was trying to build a competitor to Craigslist. "Craigslist and other companies like that that sell used merchandise haven't really scaled into communities," he said. "They've been very metro-focused. One of the opportunities for Patch...is the ability for us on the commerce side to offer the people the ability to do listings and other things like that locally."
The new version of the sites, to be launched later this year, will have a social component that Armstrong called "community networking."
All Things D's Peter Kafka notes that traffic to AOL's sites is improving, "which by AOL’s standards means it is shrinking less. Visitors to the sites AOL owns were down 1 percent over the last year, but that’s a smaller decrease than previous quarters."
Global display revenue grew 2 percent, AOL reports, fueled by "continued double-digit growth in international display advertising." Domestic ad revenue was flat compared to a year ago. Among the charges AOL lists, it notes operating income before depreciation and amortization "was negatively impacted by $8.8 million of costs related to the proxy contest," a reference to the battle waged by activist investor group Starboard Value to kill Patch, among other goals.
Earlier: Patch reports record audience as AOL faces proxy fight | AOL earnings reports tell history of Patch since 2009 || Related: The hard truths of hyperlocal journalism reveal themselves in Journatic trouble
Correction: This post originally misspelled Jason Del Rey's name.