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Summary:

Mark Josephson, CEO of hyper-local news aggregator Outside.in, isn’t concerned about AOL pouring $50 million into its Patch.com hyper-local news operation. He says that while they are both going after local advertising, the two services are very different and there’s plenty of room for everyone.

Mark Josephson, CEO of hyper-local news aggregator Outside.in, doesn’t seem all that concerned about AOL’s plans to pour $50 million into its own hyper-local news operation, Patch.com. That’s because while AOL is trying to generate its own custom content for dozens of small cities and towns in New York state and elsewhere, Outside.in is happy to take on the much less resource-intensive job of pulling together what is created by others — from traditional media outlets such as newspapers and TV affiliates to local bloggers and even municipal listings and announcements. If anything, the expansion of Patch.com will just give Outside.in even more content to aggregate.

“I saw they were planning to spend $50 million, and I tried to think of ways we could spend $50 million and I just couldn’t do it,” Josephson said in a recent interview. Although they’re coming at the marketplace from two different perspectives, the goal of both Patch.com and Outside.in is similar — to tap into the local advertising market. “I think we see the same thing, which is an opportunity to capture an advertising audience at the local level and then roll that up into large national buys,” the Outside.in CEO says. Other hyper-local efforts with their eyes on the same prize include Topix and Placeblogger.com.

“They’ve decided to create original content for everywhere they want to be, whereas we aggregate and pull together what is out there already,” Josephson said of AOL. Outside.in pulls from more than 40,00 different sources, including traditional publications such as local newspapers and TV stations, bloggers, social networks such as Twitter, Facebook and Foursquare, as well municipal information sources and real estate listings. Those latter sources make Outside.in a little like Everyblock, the startup founded by programmer Adrian Holovaty that was sold last year to MSNBC. Microsoft is also experimenting with some aggregation of hyper-local blogs through its Bing search engine.

Josephson says Outside.in has been working closely with traditional publishers to “help them take costs out of their business.” The company offers a self-serve version for publishers that allows them to aggregate content for a specific location and then use it to beef up their local coverage. “We’re working with about 100 publishers, including the New York Post, Tribune Co., Media General, as well as TV stations such as CBS, NBC and Fox,” Josephson says. “We don’t want to see the traditional media go away — we want to help everybody to stay in business.” One of the more recent additions to Outside.in’s list of clients was CNN, which is not only working with the service but also invested an undisclosed amount in the company in December.

Meanwhile, Josephson says the New York Post’s web site, which used to have just four sub-sites for their regional bureaus, now has a toolbar with hundreds of different boroughs, towns and other locations, all powered by Outside.in — providing news headlines as well as blog posts, and a local map with events and news items pinned to it at various locations. The service also pulls in content from Gothamist and other news sites, via their RSS feeds. And the content feed from Outside.in that publishers such as the NY Post use comes with ads embedded in it (publishers can pay a licensing fee for a feed with no ads, but 90 percent of the company’s customers take the ads).

As far as other hyper-local or aggregated content solutions such as Daylife and Topix, Josephson says they all serve a slightly different purpose. Daylife “does for other sections of the paper what we do for news,” he says, creating vertical and topic pages around content areas such as travel and entertainment, while Topix “does a great job of aggregating community and comment boards, but doesn’t really focus on news.” In any case, the Outside.in CEO says there is “plenty of room for everybody in hyper-local. There’s $115 billion spent on advertising focused on local markets, through TV, radio, print and outdoor — and only about $15 billion of it is online.”

And if AOL spends $50 million and brings a lot of attention and advertisers into online hyper-local, says Josephson, “then we all benefit.”

Post and thumbnail photos courtesy of Flickr user Thomas Merton

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  1. Good catch… there’s a super-whopping huge big difference here, though, between Patch.com and such other places that a lot of the “nouveau internet” miss entirely — Patch.com is investing itself into the communities. In the development of each site, they send people to all the businesses throughout town in order to actively collect, and verify, information for their directory listings.

    That, alone, creates goodwill, and buzz, with 1000s of small business owners (the people who drive America’s enconomy and serve as connectors to 100s of people every day). While many might not necessarily be savvy, or web-obsessed, enough to find their way to those “passive aggregators”, they can jump onto a Patch.com site easily enough to get their local news… post events… check the local classifieds, and so on.

    I’ve been in a family business for 30 years and I’ve always gone with the guy/woman who’s come into my business and shook my hand rather than some stranger with a computer who just wants to drop a website in front of me and hope I’ll take the bait. Add to that, Patch.com is employing people who live in their respective patch.com communities.

    So, while I appreciate this article for picking up the importance of hyperlocal news, it actually misses the most important distinction between businesses such as outside.in, and patch.com — outside.in is in the business of “passive news aggregation”, while patch.com is in the business of helping communities become more richly developed.

    And, yes, I’m for hire AOL… ;)

    The Inimitable Sam Freedom

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    1. Thanks for the comment, Sam. I agree that there is a difference, and the road AOL has chosen is a lot more resource-intensive — it’s a kind of “boil the ocean” strategy, as I tried to describe in this post: http://gigaom.com/2010/02/19/aol-and-hyper-local-good-luck-with-that/

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  2. I am a reformed one-size-fits-all-hyperlocal guy having done exactly that with Microsoft Sidewalk. It ain’t hard to burn through a lot more than $50M let me assure you. To this day people tell me some of the sidewalk sites remain some of their alltime favorites in part due to allowing for customization in each locale. The problem wasn’t building some great sites. If Patch hires well, I am sure they can do what we did 14 years ago.

    I am happy to be proven wrong as more hyperlocal scorched earth is bad for all of us working our tails off to build viable hyperlocal biz models. I think they have two big gapsissues. Perhaps they have these hidden away. 1.A cost structure that raises the revenue bar incredibly high to make it viable. 2.I will always bet on an entrepreneur over a hired hand when the task is tough. Working for the man versus yourself gives you radically different motivations. The entrepreneur will work crazy hard in a way a hired hand never will. I have done and seen both. No comparison.

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  3. At this point there is no comparison between the quality of the content covering my community (Ridgewood, NJ) coming from these two sites. The Patch site is delivering real, local news and content, much of it information that I haven’t seen elsewhere. Outside.in is delivering a hodge-podge of local stories, most of which relate to other localities (Brooklyn, NY for example).

    I agree with the comment by David Chase that it won’t be hard to burn through $50M,. At least for now, the investment in having a local person running the site is resulting in a better editorial product. The one thing that Patch is doing incredibly poorly in my market is getting the word out that they exist. I found out out about it by attending a local media webinar. I’ve informally polled friends in the community and haven’t yet found anyone that was aware of the site’s existence.

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  4. I looked at Outside.in for my location, which is a small city, and discovered all it contained was links to the major media. It might be useful in larger cities where there is more localized media to begin with, but I don’t see it ever being useful where I live if it merely serves as an aggregator. Patch.com might be more useful for me if they ever leave the large cities.

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    1. Patch is currently only in small cities. That is the entire point of Patch, they create these little “patches” all over the places covering small localities.

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  5. yeah, none of these sites are very useful to be honest.

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  6. Another big distinction we need to make here is that Patch.com is a consumer destination site (a great one for many of the neighborhoods they’ve launched in). While Outside.in does have a consumer-facing site, it is much more than that. A big focus at Outside.in is actually on the b2b side where they provide the technology and platform to publishers to aggregate, curate, and create their own edited version of local news sections and pages.

    What people see on Outside.in when they search for their cities/ nabes/ zip codes does not reflect the power of curation that Outside.in brings to the publishers via their platform. Thus, Patch.com vs Outside.in is not really an apple to apples comparison IMHO.

    And, full disclosure, I work for Outside.in.

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  7. Camilla,

    It was nice of you to offer “full disclosure”, but it was obvious from the outset. ;) I should probably disclose that I’m working for patch.com as an “independent contractor” on, what some might call the lowest rung of their ladder, but, as I’ve said, I come from many years in family business and can both recognize, and utilize, the huge value in going around shaking the hands of 100s of business owners each day.

    While I think there’s no comparison and, therefore (at least not now), no real competition between the two, there’s still something to be said for “the feel” of local editors, and all kinds of “townies”, scooping out the local news, plus all the community having the opportunity to interact in a myriad of ways, versus that of aggregated news being reassembled into a local online rag. Again, the former engages the community and encourages community building; the latter continues to be a non-engaging form for passive reading.

    The only advantage an Outside.In has over any hyper-local news venture is that it’s existence isn’t predicated on the survival of any one particular hyperlocal news venture.

    Matt –

    I’ve witnessed the innards of entrepreneurial internet marketing for quite some time so I like to think I can spot trends and the kind of innovation that springs from unintended consequences. So, imagine this (purely theory)…

    Remember what AOL was? It was like one large city with a little bit of everything in it. It was large, like a T-Rex and it ate like one, too. But, even though it’s not out for the count, the “Dino Age”, for many, is coming to an end. So, just like we now have reptiles (and other animals) that are much smaller relatives of those dinos, I believe Patch could turn into a whole bunch of “mini-AOLs.”

    Imagine this…

    The grassroots buzz will reach a critical mass where Patch.com DOES get a whole lot of attention. All it takes is one, or two, well-placed mentions on a news network (just like the insane fiverr.com got the other day). So, while off to a slow, methodical start, getting a big boost of attention will not be the problem.

    The question is on how to RETAIN those visitors; how to keep them coming back; and how to incentivize them to spread the word.

    Since I’m going on too long for the “internet age attention span”, I’m going to sum this all up quickly…

    Each patch starts off as a neat, well-developed, well-attended, community news website… THEN, ideally, we would see the backdooring in of the things that are piled on as “standard” in so many non-community local news sites… blogs and forums, for example.

    Once a certain number of people sign up for news from a given patch, it’d be just perfect to see it offer blogs to the locals under local-based categories (e.g. Marblehead MA, a prolific sailing community, might have a blog community for boaters), and forums that eschew controversial topics but, instead, have sections that are supremely relevant to the individual city.

    It’s called “framing”… you offer that stuff up first, and you’re offering too much. But start people off with a “bite” of hyperlocal community news, create buzz by putting up flyers around town and shaking the hands of 100s of business owners, and then… a little way down the road, offer added services that take almost nothing to maintain — maybe a few locals to monitor the forums for free.

    From THERE, they could find all kinds of local talent to add to their talent pool, either for hire, or accepting article contributions for the free exposure (cooking tips by local restaurant owners, sailing tips by local yachters or charter boats, fly tying tips by local fishermen, etc. etc.)

    Creating “mini-local-AOLs” from the inside-out…

    I say never stop building, and always pay homage to synergies.

    Ok, I’m out…! Thanks for stoking a fun, informative conservation.

    Sam

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  8. [...] who put them on a map like that.” Asked whether this was a reference to Outside.in, which also provides local aggregated news, Tolles said he didn’t want to single out any one [...]

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  9. [...] others who put them on a map like that.” Asked whether this was a reference to Outside.in, which also provides local aggregated news, Tolles said he didn’t want to single out any one [...]

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  10. [...] million on Patch this year. Other services going after the hyper-local news and advertising market include Outside.in and Topix, which is owned by a group of publishers including Gannett, Tribune and [...]

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  11. [...] It’s going to be good to contribute to the community and hopefully do some good. I believe in the business model that AOL has invested in with Patch.com and I think it will be a great success. I hope to [...]

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  12. @mathewi Mathew, w.r.t. your http://t.co/0W97OpOd post, would you please be kind enough to take a look at http://t.co/G2a9PfW7 once?

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