September 23, 2014

AOL Plans Shut Down of Hundreds of Patch Sites

patch

If you operate a business website, especially one that updates regularly, then essentially you run an online publishing operation.

That’s one reason news breaking over the weekend that AOL plans to shed about 400 of its Patch local news sites by either closing them or merging them with other sites, is so important.

Media blogger Jim Romenesko reports the company plans to focus on a core 500 of nearly 1,000 Patch sites and make them profitable.

Patch’s business model targets local advertising sales in the communities its sites cover. Venture Beat reports that strategy hasn’t been working so far.

Impact on Local Business

Techcrunch, also an AOL owned website, reported hundreds of employees will be laid off as a result of the decision to close so many Patch news sites.

But the decision is also likely to affect local businesses that use the sites as a way to promote themselves to local customers.

Patch’s advertising page states 87 percent of the websites’ visitors are local and that 77 percent of the local community a Patch site covers visits monthly.

A testimonial page displays videos representing what the company says are thousands of local businesses that advertise with the network. Patch also lets businesses sign up for local listings free. See the video below.

Of course, those businesses have many other choices for online marketing including their own business websites, social media and evolving services from sites like Yelp.




18 Comments ▼

Shawn Hessinger - Editor


Shawn Hessinger Shawn Hessinger is the Editor for Small Business Trends. He is a journalist and social media networker with more than a decade of experience in the traditional newspaper business before moving to the digital world. He was the former community manager of BizSugar and the former community editor at AllAnalytics, a site dedicated to professionals in the business intelligence and analytics community.

18 Reactions

  1. It’s one thing when it’s positive news or news that is fact, but when it’s news to attack somoneone just because a political hack wants to destroy someone in the community, then it needs to be shut down. Quite frankly, I find Patch to be very racist, always highlighting blacks being arrested and showing pictures. Is Armstrong a Bigot?

  2. Shawn: I have never heard about Patch. I have been using the word, “glocal”, for some time. You could be global with social media activities and have an online presence, and at the same time have cultivate a strong connection with your local community.

    • Hi Martin,
      The word sometimes used to describe Patch and similar sites is hyperlocal. I’ve followed Patch since it was only a startup before it was acquired by AOL. While I think there may be a business model in the idea of hyperlocal content, one must remember all of the competing channels out there today that allow businesses to connect with customers on the local level.

  3. Sad to see the layoffs, but what I’d really be interested to know is how they were paying the writers. I feel like they could have gone the About.com route and gotten good writers on a revenue share and let the authors do the heavy lifting on the promo. My guess is that the sales team cost too much.

    • Hi Robert,
      I believe I interviewed for one of these positions some years ago. If memory serves, they were (and perhaps still are) full-time salary positions very much like the newspaper jobs they sought to replace.

    • Robert, I was a former employee & it was actually the cost of the writers and expense accounts, as in the markets that were not doing well, Patch eliminated the high salaried sales people & went with independent contractor sales at $10k per year with no benefits! So, sales was not the cause. It was writer cost & only 1 revenue ad source which were display ads that do NOT work for the businesses that purchase them.

  4. This is bad. It shows that more and more businesses are cutting costs by shutting down some of their less profitable services. Techcrunch is right when they say that this will lay off a lot of employees. While I know that they have their reasons, it is still not good for the overall state of business in the country.

  5. I’m not surprised at all.

    First off, some of they had a spammy feel.

    Second of all, some of them kind of had a spammy feel to them.

    Thanks for this info, Shawn. I didn’t even know that AOL owned them!

    The Franchise King®

  6. I think it’s a shame what’s happening. A lot of hard-working writers and editors are going to be out of work.

    But it’s hard for large corporations to make enough money on the Web to justify costs — and still please Wall Street with high enough earnings.

    Until advertisers pay enough to support such endeavors, it will be a bleak picture. Readers have to realize – advertisers pay the freight for “free” content and unless you want to go a system where you hit a different paywall every time you want to read a simple article or watch a 3 minute news video, you have to support advertisers.

    My 2 cents. :)

    – Anita

  7. I’ve been a Patch reader/follower since they came to my town. They did a great job of covering local events that were ignored by the big-city TV news stations. After the AOL sale, everything changed. AOL wanted Patch to make a lot of money in a short time. AOL is not patient enough for this start up venture. It’s sad that the big corporate mentality has spoiled this local resource.

    • I agree that it’s tough for a startup Web business to survive in a large corporation, Thad. It’s really driven by investors, and then it trickles down to executives inside the corporation.

      Patience is not something that Wall Street has much of, unless you’re someone like Jeff Bezos who somehow manages to convince everyone it’s OK to lose money. But given how large Amazon has become, he clearly knows what he’s doing.

      Still, most executives do not have his vision or persuasive powers and so can’t pull it off. It’s “Off with their heads!” if progress isn’t fast in coming. And then it flows downhill from there. :(

      – Anita

  8. Wow, that’s a huge cutback, I hope they can make it work without letting too many people go.

  9. I met with a former student in 2010 to hear about a hyperlocal news site coming to my town. He moved from the West Coast back home to the Midwest to become editor, and it was a heady meeting to hear about grand Patch plans during the height of the recession when journalist layoffs were the big industry news everywhere (and unfortunately remain so). Because I was interested and no longer teaching college journalism, I agreed to help out as a freelancer for a while. I was paid $12.50 for each community listing, and quickly did about 25 with photos, and paid from $50 for a column maybe $100 per story. It was way more work that it was worth, but I was thrilled because it seemed so hopeful for journalism. I wrote a handful of news stories and 24 columns in almost two years, when the freelancer ax finally fell. Just for perspective, typically one “traditional” project as a freelancer (like a mag story with photos) made me as much as I made from AOL in a year. That said, I think it was great fun to write about local history in a “carte blanche” column, to have a former student as my editor, and to hope that this grand experiment in hyperlocal journalism would turn into something big. Unfortunately hope doesn’t keep anything alive in business. I’m not sure what the editors were paid, but guessing less than 50K and more like 35K, something like what a weekly community newspaper reporter or editor would make.

  10. Well, this sucks, really.

    500-ish staffs were laid-off, with 150 sites were shut down. With empty ad spaces on many Patch’s sites, it’s probably a foregone conclusion.

    My question has always been this: Why Patch is not doing better in finding ad income? Contextual ads and so on are great, especially for a massive network with huge traffic like Patch, IMHO

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