Friday, March 02, 2012

Will survive? AOL says yes. The jury is still out

So I came across this interesting article about today and plastered it all over my facebook wall.

Funny how something like this can seem very real and relevant when you have people that are friends affected by it. This piece does a very good job in my opinion of discussing the future of hyper local news in America, specifically given the fact AOL has banked its hopes on this venture being very profitable.

I don't know whether to believe's president who said that the site is making progress because of its traffic, or the writer of this article who presents a very different perspective, all I know is that patch does seem to be stretched thin across the U.S. landscape, with nearly 1,000 websites, but still, some people have never even heard of the site.

When I mentioned it to a friend today, I still got the puzzled response, "never heard of it" which would seem indicative that the brand has not penetrated the local consciousness of its readers, even nearly 4 years after its inception. So what are the ad people doing? If you believe printed reports and leaked material, including web traffic reports, a. advertising staff turnover is very frequent, thus leading to instability on the online advertising, which is the very lifeblood of the venture, and b.the network is scrambling to find money streams beyond online advertising.

It would appear that AOL is not getting a return on its investment, if we are to believe the figure cited by the author. You do the math, if they have dumped $160 million, but have only seen a $20 million total profit, it doesn't take a genius to figure out something isn't right.

The article goes on to discuss traffic. Web traffic is hard to gauge, but if we are to believe that social media is as big as they say it is, (Everybody and their mother seems to be on Facebook after all) then we can use it as an indicator of sorts.

Consider the local patches. They all have "Facebook" like indicators.

Glendora patch has existed a little over a year now and has collected these many facebook likes: (click on image below to read)

Walnut has existed almost a long, perhaps only a few months apart and they have this many:

Finally, Baldwin park, which has only been around for a few months, less than a year for sure:


I am not sure if these are a fair basis for comparison, with say something like Hollywood patch (which presumably would have a big draw with 583 likes, versus say Bethlehem Pennsylvania, which is back east and boasts of only 100 fewer than Hollywood California.)

I know some blogs that far exceed these social media numbers. If we go by social media alone, or facebook specifically, then may be in real trouble! Or it may just be reaching its potential at some future date and hasn't yet peaked, but a $140 million deficit does not sound very promising. Stay tuned as they say!

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