Patch will appeal judge’s order to turn over confidential source

Joliet Patch | Chicago Sun-Times

Patch editor Joseph Hosey won’t reveal who gave him police reports about a gruesome murder in Joliet, Ill., Hosey’s lawyer Ken Schmetterer told a judge in Will County, Ill., Tuesday.

Judge Gerald Kinney on Aug. 30 ordered Hosey to give his source up. Hosey and Patch Media plan to appeal the order, Dennis Robaugh reports.

“Some experts, including media lawyers, said Hosey most likely would not be jailed after being found in contempt of court,” Becky Schlikerman writes in the Chicago Sun-Times. “Rather, it’s a procedural motion to give the appellate court jurisdiction.” Read more


Layoffs hit Patch

AOL CEO Tim Armstrong told Patch employees in a conference call Friday the widely reported layoffs at the site will occur today. 60 percent of Patch sites had “real traction,” he said, 20 percent had “significant traction” and another 20 percent would be sold or consolidated. Armstrong said he’d had meetings with major media companies about the Patch sites. Employees were told to await an email, apparently with details about another conference call.

I’ve also heard that some Patchers were fired in a separate phone call at 11 a.m. and told their last paycheck would be Aug. 23. Darrell Etherington says he’s confirmed that with another source. Several people who are staying have told me Patch bigs told them they were on the “go forward team.”

Peter Kafka’s sources say “AOL will immediately let go of about 350 Patch employees.

Up to 150 more will be told their jobs are in limbo while AOL tries to find other media companies to operate some underperforming Patch sites. If it can’t find partners, those employees will also be out of work.

I’ve asked Patch for comment. Read more


Tim Armstrong apologizes for publicly firing Abel Lenz

“I acted too quickly and I learned a tremendous lesson and I wanted you to hear that directly from me,” AOL’s CEO Tim Armstrong writes in a note to staffers. He says he apologized to Lenz, who he says he’d spoken to previously about not recording confidential meetings.

The email’s subject line is “Accountability starts with me.”

Jim Romenesko published audio of the call on Saturday. Read more


No layoffs at Patch today

AOL CEO Tim Armstrong told Patch editors Friday there would be no “impacts,” or layoffs announced today. The “impacts” will arrive on a rolling basis over the next week, he said.

Armstrong said in an earnings call earlier this week that AOL would sell or close as many as 300 underperforming Patch sites.

In the call Friday, Armstrong said Patch would spend the next week looking at options for 400 of the local news initiative’s 900 sites. They’ll fold or Patch will find partners to run them. “We’re going to become a fast-moving company and fast-moving partner company,” Armstrong said.

Nicholas Carlson reported Thursday that AOL wouldn’t address a rumor that Patch CEO Steve Kalin and Chief Content Officer Rachel Feddersen were leaving the company. TechCrunch’s Darrell Etherington is reporting that Armstrong “will be running the show along with new CEO Bud Rosenthal.” Read more


AOL will close or sell unprofitable Patch sites

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.

Read more

Patch gets new CEO, lays off staffers

All Things D

Steve Kalin is Patch’s new CEO, AOL CEO Tim Armstrong told Patch employees in an email Friday. Patch will also make several motions that Armstrong writes will “move Patch meaningfully toward profitability.” Among them: layoffs.

The changes we are making at Patch, however, come with the difficult decision to eliminate some positions. These employees have contributed greatly to Patch’s business with passion and dedication. We sincerely thank them for all they have done to make Patch what it is today. Their impact will always be felt here. We wish all affected employees continued success. They are truly Patchers for life.

Via email, Patch spokesperson Joe Wiggins replied affirmatively when Poynter asked whether editorial jobs would be among those going. He sent along this statement:

Patch is streamlining its regional editorial structure across the country by moving from 20 to nine teams. We are implementing this team approach based on the success of our field tests earlier this year. The team approach allows for flexibility based on the unique needs of each community and the strengths of our editors. We are not reducing our number of sites or our coverage area as a result of this change.

Making these important changes came with the difficult decision to eliminate some positions. We recognize these changes are painful for individuals and for our organization – and we are committed to handling the people impacted with care and sensitivity.

The company will host a “Patch All-Company call” at 6 p.m. ET Friday.

Last fall, Patch began rolling out a new site design. The new design means editors will be “taking a less central role,” Laura Hazard Owen reported at the time. “We’re not doing a pivot,” Patch content honcho Rachel Feddersen told Jeff Bercovici. “This is an amplification. The redesign doesn’t take anything away from the journalism we’re creating.” Read more


AOL’s redesigned Patch websites make a play for neighborhood groups

Patch’s new site design went live in five Long Island, N.Y., towns Sunday evening.

The new design is less newspapery, Patch creative director Abel Lenz told me Friday, when he, chief content officer Rachel Feddersen and Patch CEO Jon Brod gave Poynter a demonstration of the site design. There’s an anchor spot up top for editor’s picks, but all the rest of the content flows down a center column, much like Advance’s sites in New Orleans, New Jersey and elsewhere.

But there’s a key difference between a reverse-chronological blog view and Patch’s new design. Patch readers will be able to follow certain topics — e.g., sports, government, local businesses — and they’ll also be able to create groups on Patch whose updates will feed in among the local news they’re interested in: A blog, or a private group, or a public one for a kids’ soccer team, in the example they showed me. If the site of a game changes, for instance, Lenz says, that “story” will show up in your feed. Read more


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.”

Read more

Starboard loses bid to place members on AOL board

Starboard, the activist investment group that expressed great skepticism about AOL’s content-based strategy, lost its bid to place three members on the company’s board at today’s annual meeting. AOL’s entire present board was re-elected, a company news release says.

This may mean some more breathing space for Patch, AOL’s local-news initiative, which would have been in the crosshairs of any Starboard-affiliated directors. Starboard prepared an investor presentation for the SEC saying it did not believe Patch was a “viable business,” estimating it was losing “approximately $79 million to $133 million per year.”

Related: Patch reports record audience as AOL faces proxy fight Read more


Patch reports record audience as AOL faces proxy fight

Patch | The Wall Street Journal
Patch reports today its audience is up 14 percent over last month, with 11.7 million users in May, and that its revenue is up 17 percent over the same period. This news comes at a propitious time for AOL’s ambitious local-news initiative: Thursday’s annual AOL shareholder meeting will be a showdown between CEO Tim Armstrong and Starboard Value, the activist investment group that’s been calling for the corporation to change its content-focused strategy. “We do not believe Patch is a viable business,” Starboard wrote in an investor presentation it’s filed with the SEC. It estimated the local-news initiative is on track to lose “approximately $79 million to $133 million per year.” Starboard is hoping to elect three directors to the company’s board at the meeting.

Keach Hagey reports in The Wall Street Journal that AOL’s been catching some tailwinds that might blunt Starboard’s attack. Its stock is up 43 percent following a sale of patents to Microsoft, and much of its equity is held by long-term investors (who might nonetheless get twitchy if a frustrated Starboard sells its 5.3 percent share in the company, Hagey writes) for
torrent proxy

Previously: AOL reports Q1 earnings with progress for Patch as rumors swirl it’s selling tech sites Read more


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