Street Fight
Street Fight's Rick Robinson emails Patch president Warren Webster "to get at the root of what’s going on inside the swirling world of AOL’s local bet." The exec in charge of the 863 Patch sites insists that "we are succeeding on a number of levels," and notes that "building something as ambitious and important to communities as Patch is a long-term investment." Patch traffic, he says, has increased 250% since the beginning of 2011. Unfortunately, he isn't asked about Patch editors lugging around prize wheels and being told to drum up ad sales leads. || Previous Patch coverage on Romenesko+.

Howard Owens
Howard Owens writes that the duties described by a Patch editor, while vast, are pretty standard for anyone running an independent news site. "But here’s the thing about the work load for Patch editors: They’re not owners. They are expected to do all of the things they would have to do if they owned their own web sites, but merely in service of building wealth for AOL shareholders. ... Patch editors should know that what they’re being asked to do on salary they could do for themselves far more successfully and with some chance of building a valuable business for themselves and their families." Owens has owned and operated The Batavian, a local news site in upstate New York near Buffalo, since 2009.

Business Insider | WSJ.com
A Patch editor from the East Coast tells Nicholas Carlson that coming up with advertising possibilities "is a bridge too far by any measure" and "requiring journalists -- already run ragged by their normal duties -- to do this is so far beyond the pale it actually makes my stomach hurt." The editor says his job requires that he....

Post seven pieces of content a day, with a minimum of four; Edit all copy and photographs; Shoot and edit video for stories and as stand-alone content; Main reporter and writer (with no editor or copyeditor); Main photographer; Contract freelancers and assign stories; Maintain budget (couple grand, more or less) per month; Pay freelancers twice a week; Recruit and edit stable of bloggers; Track all users and comments on site; Acquire guest editor for vacation days (and pay them from my own budget at $100 a day); Post to Facebook and Twitter four to six times a day (twice a day on weekends)

The source says lead editors are responsible for organizing marketing events, which involves carrying a large Patch banner and other items, such as chairs, barrels for bottled water giveaways, iced tea in hot weather, or coffee urns in cold weather. In some markets, the editor has to take a "prize wheel" to events. Dow Jones reported earlier this week that AOL chief Tim Armstrong wants at least some Patch sites to turn a profit this year. If Patch veers "way off track," he said, AOL could explore a sale. || In January, Nicholas Carlson wrote that "the real problem with Patch is that no one needs it." He followed that up in March with some thoughts on what Patch has to do to succeed "and prove us wrong." || Read Patch stories from the Romenesko+ archives.

Reuters
Felix Salmon sizes up Digital First Media, the new management company headed by John Paton that will run MediaNews and Journal Register Co, and concludes it's "much more likely to solve the problem of building strong — and profitable — Web-based local media than is AOL’s Patch." Among the reasons: Papers know how to sell local ads and share content. "Digital First will, for the foreseeable future, be able to continue to have that hard-to-replicate feel of an old-fashioned newspaper, even as it embraces reader-generated content, new-media workflows, and the rest," Salmon writes. || Related: Paton tells Staci Kramer that it's too early to say whether he'll maintain the recently created paywalls at MediaNews papers. | How's the journalism? After pointing out six things to watch out for at Digital First Media, Ken Doctor asks how Journal Register's journalism compares to before.

Street Fight
Tom Grubisich traces the growth, decline and relaunch of YourHub, the Denver-area hyperlocal effort that signed up franchises around the country when it launched in 2005. YourHub, now run by The Denver Post, has a mix of content from users and staff, but Grubisich describes the citizen journalism as "weak" and notes that some stories are simply press releases. The managing editor responds that community managers will hold meetings for residents to talk about stories and learn about journalism. "What happened in Denver is a sobering case study about metro newspapers and what happens when they plunge into hyperlocal," Grubisich writes. "While the Post has fixed some of YourHub’s worst flaws, it hasn’t created anything like well-connected electronic town squares throughout metro Denver." Would YourHub survive if Patch moved to town? || Related: Analysts say AOL could be profitable if it ditched Patch; Bluffton Today shifts to twice-weekly publication

New York Times | Bloomberg.com | DigiDay Daily
AOL's Internet access business, in particular, would be good to unload, say analysts. They also point out that closing Patch, which has reporters in 850 towns, would free $160 million and lift AOL into profitability. (AOL lost $11.8 million in the second quarter.) AOL chief executive Tim Armstrong argues that the kind of content that Patch sites post is the Internet’s future growth engine. Analyst Sameet Sinha tells Verne Kopytoff: “Frankly, AOL hasn’t delivered on its [turnaround] promise yet. It’s just been a series of stumbles.” || DigiDay: AOL's chief ad man talks tough, and says Patch "is another example of AOL leading in the marketplace." || Bloomberg.com: For a private equity firm that’s looking for the cheapest way to get online, AOL is trading for 57 cents on the dollar.

The Wall Street Journal
AOL is spending heavily on content, the Journal reports, with its second-quarter results showing that its "cost of revenue increased 20% from a year earlier to $403.4 million." Included in that cost is hiring for the network of Patch sites:

AOL is spending about $160 million a year on Patch, which equates to about $150,000 to run each individual Patch site annually, according to an analyst's estimate. AOL first focused on building traffic to Patch sites, and just recently started ramping up ad sales. ... Boosting traffic is crucial to capturing ad spending.Traffic to AOL sites rose just 3% in June, according to comScore Inc., with increases to its newer properties, such as the Huffington Post and local Patch websites, barely making up for steep declines at its legacy sites, such as the AOL.com home page and mapping site MapQuest.

One analyst questions the business model: "If you sell lemonade for $1 and it costs $800 to make it, that's not a great business."

Street Fight Magazine
Local advertising was once the exclusive goal of Patch and national advertisers were practically forbidden, reports Rick Robinson. "I hear things there are changing. They are taking national ads now." Robinson, a former editor of AOL Local, says Patch editors expect more emphasis on “trending topics” and tailoring content to what people Web-wide are searching for, and not necessarily what's going on in the community. "The Huffington Post influence is gently suggesting adding this content to drive UVs," he writes.

Remember when everyone online had a Home Page? Robinson does. From a 2002 interview when he was with AOL:

Weblogs, over the last several years, have migrated to replace, in some cases, people's home pages. It's natural that the blog and the home page would combine. And when you remember that AOL has the largest collection of home pages in the world, it kinda gets interesting.

Slate | SimsBlog
Reports that AOL will spend $120 million on Patch this year have started a fresh wave of skepticism about the financial viability of Patch, and hyperlocal journalism as a whole.

Earlier this week, Judy Sims noted problems, including that "most local advertisers are high-maintenance clients that are time consuming and expensive to acquire and difficult to retain." She suggests AOL should focus on building its national sites in specific verticals (which it has been consolidating into 20 "power brands," with many merging into The Huffington Post). The vertical sites could then include local content on those topics, Sims wrote. "What if you could go on ParentDish, Aol Autos, KitchenDaily or Engaget and drill down from the national level to also see local content, listings and ads?"

Then Jack Shafer wrote for Slate that Patch's problems may show hyperlocal efforts are a "complete waste of time and resources." He argues:

"I'm convinced that Web users are more interested in hypercoverage of their interests — sports teams, hobbies, food, vacations, family, games, et al. — than they are of the starving-artists exhibition at the farmer's market, increasing parking-meter rates, the city budget, local real estate prices, or many of the other topics covered in Patch. Besides being wildly expensive to create, hyperlocal news doesn't seem to appeal to a broad audience."

In the comments on his piece, several people defended non-Patch hyperlocal efforts. Batavian publisher Howard Owens said local news is only expensive to publish "if you have a big corporate structure to support and shareholder demands to meet. There are a handful of successful local online ventures that produce a ton of highly engaging, sought after, popular, memorable local news that do it at a fraction of the cost of the corporate entities."

West Seattle Blog's Tracy Record said, "For those of us operating independent community news sites, it is a business that is NOT 'wildly expensive' to run -- Patch makes the classic error of adding the middle-management layer, among other expenses -- and it is of great interest."

Dan Kennedy, a Northeastern University journalism professor, said the problem was not lack of interest in local news, but that you can't "impose a corporate, cookie-cutter approach in covering local communities."

EARLIER: Knight News Challenge learns hyperlocal efforts are best when homegrown

USA Today | Washington Post | Slate | paidContent.org
The mood at AOL's 225,000-square-foot, three-story building in the heart of Silicon Valley is more like that of a technology start-up, reports Jefferson Graham. "Employees are encouraged to draw on the walls, play pool and ping-pong, and come to work whenever they like. All they have to do in return is produce hot websites and mobile apps." Brad Garlinghouse, president of AOL's Applications and Commerce Group, tells Graham:

The space you work in is a reflection of the kind of company you are. You get innovation from working in a space that's very open and doesn't have offices … where people can work together and play together.

Meanwhile, AOL's Patch continues to get scrutinized by media writers. Jack Shafer says "the Patch presentation succeeds in being advertorialish and amateurish at the same time, which I find off-putting." AOL president Tim Armstrong acknowledges that "Patch is not popular with the media"; Erik Wemple says he's right:

The negative stories have often been a bit gleeful in tone, almost celebrating this enormous venture’s stumbles in gaining its sea legs. I myself am guilty here (and I got hammered on Twitter).

> HuffPo COO's responsibilities narrowed to focus on running Patch
> Prediction: Patch will create a spike in j-education among the masses