And second, Patch has gone big with its sprawling network of sites — building economies of scale and making a long-range play for national advertisers who want to target their message to local readers.
We can make "the national hardware store a local hardware store," he says.
Patch is also doing some smart things to engage the suburban moms who make the majority of household purchases — launching moms columns, for instance, and creating moms councils to advise Patch sites.
The trouble is, Patch has plenty of local news competitors, like Mainstreet Connect in Connecticut and Wicked Local in Massachusetts. Sophisticated tracking software means nationally focused sites can offer targeted local advertising, too.
And the company has no plans to supplement its online advertising revnue with something more promising — say, the Groupon-style consumer deals that have proven so lucrative of late.
In the meantime, the Patch approach to journalism, if cheap by traditional measures, is still costing the company a pretty penny in the aggregate — analysts expect AOL to spend some $120 million on the venture this year.
Can AOL, with all its struggles, afford to make that kind of investment much longer?
David Scharfenberg can be reached at dscharfenberg@phx.com.
