Forbes | Street Fight
In AOL’s earnings call, CEO Tim Armstrong talked about Patch, revealing “how he plans to keep his promise to make the network of local news websites profitable by the end of 2013: by closing, selling or finding partners for the 300 or so Patch sites that, in the company’s estimation, aren’t on a course to break even anytime soon,” Jeff Bercovici reports.
Newspaper sites may be potential suitors, Armstrong said in Bercovici’s account.
Armstrong didn’t say exactly what Patch’s revenues or costs would look like after disposing of the bottom third, but, in response to an analyst’s question, he did say that the average cost of a Patch site is “much, much lower” than the $150,000 it peaked at two years ago.
Armstrong said a third of the 900 Patch sites have “a viable business model,” Steven Jacobs writes. “Our goal is to get Patch to profitability, and we plan to make the hard decisions to get there,” Jacobs reports Armstrong said.
Several Patch employees tell Poynter that on a phone call with site editors Wednesday afternoon, Armstrong said that there was zero probability that Patch would shut down, that the initiative enjoyed support on AOL’s board and that Patch is worth fighting for.
Poynter made several requests for comment from AOL and Patch spokespeople Wednesday.
Patch in May said it was “streamlining its regional editorial structure,” a move that entailed job cuts.