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What Nextdoor is doing right with hyperlocal and Patch is doing wrong

Mathew Ingram — Tue, 12 Feb 2013 21:06:26 +0000

Serving hyperlocal community-level or neighborhood-level markets with news and information is a tough business — just ask NBC, which recently closed the doors on its EveryBlock unit, or AOL, which is still fighting to keep the losses at its Patch operation from sinking the ship. So why should anyone pay attention to a startup like Nextdoor, which just got $21 million in financing from a group of venture capital funds? Because Nextdoor is doing the exact opposite of what Patch and others have done — instead of making its network wide-open, it is keeping the barriers to entry high, and that could be the key to its future success.

At first glance, it might not look like Nextdoor and Patch are even in the same game: after all, Nextdoor describes itself as “the private social network for your neighborhood,” while AOL has always described Patch as a source of news and information, more like a community newspaper. But when it comes right down to it, these are really just two different ways of looking at the same problem: how to get important information about a community to the residents who care most about that information — whether it’s school closings or local government ineptitude or criminal activity.

Blurring the line between news and social network

That kind of content has always been the core of what small town and community-level newspapers have done, and the best ones have been similar to a social network in many ways as well — in the sense that readers pay more attention to the birth and death notices and the letters to the editor than they do to the actual “news.”

This is the goal that EveryBlock was going after, first as a data-driven startup launched by programmer/journalist Adrian Holovaty with a grant from the Knight Foundation, and then as a subsidiary of NBC after it was acquired in 2009. In 2011, the service added a lot more human-powered and community features — which Holovaty said he had come to believe were crucial for such a network to succeed — but it wasn’t enough to keep the service afloat.

Patch recently did something similar: instead of relying exclusively on journalists, it is opening up the service in an attempt to make it more of a community noticeboard. The main goal seems to be to cut the costs of the network, which AOL has poured more than $150 million into. According to comments made during its latest conference call with analysts, Patch is doing well — but it is still well short of the revenue targets that AOL chief executive Tim Armstrong has repeatedly promised to hit.

Instead of starting with the news and then trying to add social-networking aspects later, Nextdoor started with the social networking side: the idea behind the service is that you and your neighbors need a place to talk about those school closings or crime reports or even where to find a good mechanic or babysitter, and doing it on Facebook or Twitter or another public network isn’t appealing for a variety of reasons, including privacy concerns.

High barriers to entry improve the signal

So what Nextdoor does is make it as difficult as possible to join — the exact opposite of what Facebook and even Patch try to do. Only people who actually live in a specific neighborhood can join the Nextdoor network for that area, and the service doesn’t just accept your word: it verifies it by checking your credit-card information, calling your home phone or sending a postcard directly to your house with a special registration code on it.

Nextdoor CEO Nirav Tolia says the company is sending out about 15,000 of these postcards every day, and admits that the service builds in “a lot of friction to join” the network.

In part because of Facebook, we are used to thinking of social networks as being more powerful the more open they are, but in the case of Nextdoor the private and restricted nature of the network could be its biggest strength — and it’s almost certainly why David Sze of Greylock, an early investor in LinkedIn, was interested in the company. In many ways, Nextdoor is like a LinkedIn for your neighborhood, but even more restrictive: so if you are interacting with someone on the site, you have a high degree of confidence that what they say is going to be relevant to you.

When it comes to monetization, Nextdoor and its backers say there are some fairly obvious advertising or e-commerce tie-ins to such local content — and given the network’s focus on keeping the signal-to-noise ratio high, an argument could be made that it is more likely to succeed at this strategy than either Patch or the existing hyperlocal media players (newspapers, etc.) in those regions. Nextdoor says it has doubled in size in the last six months and now covers over 8,000 neighborhoods in all 50 states.

Images courtesy of Flickr users Jason Parks and Pew Center

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Another hyperlocal journalism effort dies as NBC shuts down pioneering startup EveryBlock

Mathew Ingram — Thu, 07 Feb 2013 18:53:48 +0000

Not long ago, “hyperlocal” was the buzzword of the day in the digital media business, and a number of major media entities — including the New York Times and AOL — either acquired or started their own efforts in that direction. Now one of the pioneers of that movement has been abruptly shut down: NBC announced on Thursday that it has closed the doors on EveryBlock, the hyperlocal startup it inherited when it took full control of MSNBC last year, and the site has gone dark.

The broadcaster’s former partnership with Microsoft acquired EveryBlock in 2009 for what sources said at the time was “several million dollars” — two years after it was founded by developer/journalist Adrian Holovaty with a $1-million grant from the Knight Foundation, one of the first winners of the now-annual Knight News Challenge (the original code for the project remains open source, as required by the terms of the grant).

Everyblock closed down. That's nuts. They may not have found exactly the right product, but it's clearly the future: everyblock.com
—
Tom Coates (@tomcoates) February 07, 2013

NBC chief digital officer Vivian Schiller told the Poynter Institute that the project was a “wonderful scrappy business,” but didn’t make sense as part of the company’s growth strategy. In a memo to staff, she said EveryBlock provided an engaging user experience, but wasn’t a good fit with NBC’s core strengths (she also pointed out that the media company still owns and operates a former news startup called Breaking News, which it acquired in 2010). Said Schiller:

“As we continue to grow and evolve the NBC News Digital portfolio, we are focused on investing in content, products and platforms that play to our core strengths. The decision to shut down the site was difficult, but in the end, we didn’t see a strategic fit for EveryBlock within the portfolio.”

In a blog post, Holovaty — who wrote a seminal essay on the use of data in journalism in 2006, and created some of the earliest data-driven projects at the Washington Post — said that he was saddened by the news, and added on Twitter that looking through some of the comments about its demise was like “attending my own funeral.” Holovaty left EveryBlock last year, and said at the time that he expected the company to be around for “a long, long time.”

@digiphile @NBCNews @everyblock @adrianholovaty i'm a big believer in Adrian's original vision and the EB team. It was a tough call.
—
Vivian Schiller (@VivianSchiller) February 07, 2013

EveryBlock started as an automated news aggregator that pulled in data from local feeds and databases, similar to what Holovaty’s ChicagoCrime.org project did, but the site pivoted somewhat in 2011 to focus more on human contributions and community. Other hyperlocal efforts, including the New York Times’ local experiment, have either been shut down or downsized significantly, and AOL’s Patch is also rumored to be undergoing cuts.

Post and thumbnail images courtesy of Shutterstock / Karen Gentry

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In Patch redesign, more focus on users — and less on editors

Laura Hazard Owen — Mon, 24 Sep 2012 00:00:41 +0000

Aol’s struggling hyperlocal community site Patch is rolling out a redesign intended to encourage more social networking and discussion between members. The changes also reduce reliance on paid editors and freelance writers. The redesign will initially only show up on five Long Island Patch sites and will roll out to 50 more by the end of the year, with the design expanding to the remaining 800-plus Patch sites in the first quarter of 2013.

Redesigned Patch mobile website (a redesigned app is coming in November).

This is the change that Aol CEO Tim Armstrong mentioned in Aol’s second-quarter earnings report in July. “When you see it, you’ll understand,” Armstrong said of Patch’s redesign at the time. While the changes seem like a good step toward turning Patch into an actual community hub, though, whether it actually becomes one relies on the users. And it’s unclear at the moment whether they’ll find enough at the new Patch to switch from the services like Facebook that they are already using every day.

Patch’s goal is to encompass “content, conversation and commerce,” Patch CEO Jon Brod told me. He says the company thinks it’s done a good job providing content — and that traffic is up 40 percent since the beginning of 2012 — but wanted more ways for readers to be involved. The redesign is focused around groups — both editor-curated groups like “Police and Fire” and “Getting Around” and member-created groups for, say, class parents, religious institutions or kids’ soccer teams. All of the businesses listed in Patch’s directory will turn into groups as well, where business owners can post content and customers can post reviews.

Patch editors are still writing editorial content, which is featured at the top of each page, but they’re taking a less central role.

Patch is “one click to manage your life,” chief content officer Rachel Feddersen, who joined the company in claimed. But as Patch places more focus on social networking, can it really compete with Facebook, or more established local listings services like Yelp? The site’s redesigned mobile app is coming in November (and the company says that Patch’s mobile website works well now). AOL is hoping that users will come for “the news of the town,” in Federson’s words, and then stay to create groups and communicate with other members.

As for the third part of Patch’s goal — commerce — it’s not here yet. Brod said the company is working on “a number of initiatives” but can’t go into detail, though Tim Armstrong told AdAge in July that Patch will start offering local listings at some point.

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Axel Springer buying local portal meinestadt.de to court local classifieds

Robert Andrews — Tue, 21 Aug 2012 11:41:34 +0000

German news publisher and ad company Axel Springer’s landgrab in online advertising is continuing – this time, in towns and cities around the country.

Its recently-formed Axel Springer Digital Classifieds joint venture is acquiring allesklar.com, the operator of 16-year-old meinestadt.de, a network of 337 local news and information sitelets underpinned by several categories of classified ads.

The company claims eight million monthly uniques and is being sold by its founding Stegger family (56.1 percent) and rival publisher Holtzbrink’s Digital Strategy unit (43.9 percent).

Although it publishes several regional, as well as national, newspapers, most of Springer’s online efforts have been at the nationwide level. Now it will gain a large local network through which to pipe meinestadt.de’s existing ads as well as those from Springer’s other sites.

Springer publishes one of the world’s most-read newspapers, Bild, but has also been piling heavily in to online-native classifieds, buying a host of such sites, including French property ads site SeLoger for a whopping €633 million and TotalJobs for £110 million. The publisher also operates autohaus24.de (auto classifieds), immonet.de (real estate) and buecher.de (e-tail).

Springer formed Axel Springer Digital Classifieds together with the investor General Atlantic in March when they acquired TotalJobs. The publisher owns 70 percent and the investor 30 percent of the unit.

Announcement.

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British dotcom vet UpMyStreet sold, again, to Zoopla

Bobbie Johnson — Fri, 11 May 2012 08:10:38 +0000

British property listings site Zoopla has bought the veteran local information website UpMyStreet, the two companies announced early on Friday — in a deal that appears to mark the end of the road for one of the UK’s oldest web brands.

Zoopla, which is itself in the process of undergoing a merger with Daily Mail’s Digital Property Group, said it was a “natural fit” given the existing commercial relationship between it and UpMyStreet — which provides a database of localized information and service listings.

Already, visitors to UpMyStreet are being redirected to Zoopla, and it’s not clear how the site will be integrated in.

We’re trying to find out the size of the deal, but a source with knowledge of previous Zoopla acquisitions suggests that the way UpMyStreet has simply been redirected suggests it would be relatively small — certainly lower than £1m.

Techcrunch points out that the site itself has had a tiny, declining traffic footprint — which probably makes it an acquisition of data and staff at best.

It’s been a long, tricky road for UpMyStreet, which was founded in 1998 as one of the original local data services and proved a breeding ground for a number of now-prominent folk in the British tech industry.

After making a name for itself through the first dotcom boom, the site ran out of money in 2003 and was just about to close down when it was purchased by price comparison website uSwitch — which itself was sold to EW Scripps in 2006 and then again to Forward Internet Group in 2009.

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Hyperlocal: opportunities for publishers and developers

Wed, 04 Apr 2012 21:19:17 +0000

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12 tech leaders’ resolutions for 2012

Tue, 31 Jan 2012 17:14:37 +0000

Lose your love handles, call your mom more often, get that promotion: If you’re like many of us, you’re already thinking over some New Year’s resolutions that will make you a better “you” in 2012. But how are the tech industries’ thought leaders approaching the new year? We asked 12 of them for their resolutions and published those from Dec. 27, 2011, through Jan. 7, 2012, on gigaom.com. We have bundled them together here in a single document for the convenience of our valued GigaOM Pro readers. Be sure to check back over the coming months for further thoughts and advice from some of the tech industry’s most well-known names. Companies mentioned in this report include Sprint, Facebook and Amazon. For a full list of companies, and to read the full report, sign up for a free trial.

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Guardian’s n0tice puts a new twist on hyperlocal

Bobbie Johnson — Fri, 28 Oct 2011 10:00:33 +0000

The Guardian, one of the world’s most forward-thinking newspapers, has been conducting some interesting online experiments recently, including a cool little tweetbot that answers your questions by finding stories in the news, and its attempt to open up news production.

But one of the most interesting trials could be a new hyperlocal service called n0tice that the company is putting through its paces.

The site, which is currently running in invite-only beta, is an attempt to create a publishing platform based on location — and it uses the metaphor of a community noticeboard to get there. People can sign up to create their own board, customize it, leave messages, place small ads, anything they like. In a way it harks back to the days of BBS, but with all the bells and whistles you might expect from a website in 2011.

Testers, mainly in the U.K. where most of the focus is, are starting to use it for a range of different things: whether it’s existing local bloggers giving it a trial run, people selling items, listing events in their community, reporting road closures, and so on.

And there’s a business model too: while small ads are free to run, companies that want to target users pick a location and pay depending on how far they want their message to spread.

It’s certainly a departure for The Guardian, which has largely focused on content over platforms — and the end result is a hybrid with some serious potential. It’s part blogging platform, part Craigslist, part communal Twitter stream, part forum, part event listing. Work clearly needs to be done on some areas, and the emphasis is likely to shift over time, as more and more users come in and shape it — but the real question is whether it becomes more than the sum of its parts, or less.

Hyperlocal has long been something media companies have talked about as a way to save themselves, yet in reality it has struggled to really make its mark. On a micro scale, a number of local media properties have done this very well over the years — sites like McKinney, Texas’s Townsquarebuzz or Howard Owens’s The Batavian, say — but in order to be sustainable for a large media organization, hyperlocal needs to scale. That’s part of what convinced MSNBC to buy and relaunch EveryBlock, a data aggregation service that promised to make important local news available to you.

But where EveryBlock was all about data, n0tice is about people.

“I love Everyblock, it’s a real inspiration, actually,” explains Matt McAlister, who is running n0tice from his lofty perch as director of digital strategy for The Guardian‘s parent company, Guardian Media Group. “But I wanted to go as far in the opposite direction as I could in terms of aggregation, at least at the start. We may be wrong about that choice, but I’d like to think that people will be interested in participating on n0tice in part because it’s their space to make.”

He adds that it’s also different from other services that it shares similarities to, such as AOL’s often-derided Patch.

“It’s different from Patch in lots of ways, but one significant difference is that anyone can own a noticeboard, kind of like WordPress. It’s totally open that way. It’s different Craigslist in that it feels like a more holistic view of what’s happening the local area, not just things that people are trading.”

Still, with The Guardian behind it, a lot of people are going to be watching n0tice to see what happens. There are a few things that are worth thinking about that should be taken into account, though.

First, the UK classifieds market is far more disjointed than, say, America. Craigslist — so often invoked as the scourge of the U.S. news industry — is not just weak, it’s more or less non-existent. Sites such as the eBay-owned Gumtree are more powerful but not entirely embedded.

Second, the idea that newspapers have failed to compete with Craigslist — as posited in this piece at the Nieman Journalism Lab — also carries less weight in the U.K. Britain’s Daily Mail, for example, has been active in the small ads online for years with the likes of loot.com and has a growing property website empire.

Third, the real competition for a service like n0tice may ultimately be from social networks like Facebook or Twitter, where communities of interest already coalesce. McAlister’s argument here is that n0tice doesn’t have to beat social networks, it just has to be open enough.

“We haven’t really viewed what we’re doing in a competitive landscape, but rather approaching a common real world problem that doesn’t seem to have been solved yet. Given the open nature of the platform we’re building, I imagine we’ll be able to do a lot with WordPress and Twitter and Foursquare and any other open platform.”

Some seeds of where this thinking might go can be traced through his own work. Before being catapulted to run group-wide digital strategy, McAlister helped architect the Guardian Open Platform system — which attempts to turn the news into an API. Prior to that he was director of the Yahoo Developer Network and at the intersection of publishing and the web with The Industry Standard and Infoworld.

He confirms that combining with other services will be important as n0tice grows. A read API is about to be launched and they’re working on a write API too. Meanwhile, it will be important to connect to existing social networks and sources of activity. “We have done some lightweight hooks so far, but clearly there will be some fun things we can do with Twitter, Foursquare, Facebook et cetera,” he says.

Staying power needed

Still, even if n0tice gains traction, the longer term issue may be whether it has support. After all, The Guardian‘s approach to the local market and small ads has lurched one way and then another over the last few years — it sold off its regional news operation for £44m, sold half of its sizeable classifieds business Trader Media, and launched and then closed a series of local blogs.

It’s not the only one: large news organizations including the New York Times and Washington Post have launched attempts at hyperlocal platforms or services, only to shut them down soon afterwards. Even with support from the top, does the company really have the willpower to get stuck into hyperlocal and stay there?

“My hope is that the advertising model we’re working on will support the investment people make in n0tice,” says McAlister. “If that’s the case then it will at least be sustainable, if not actually a generative platform — something that gets stronger the more people use it.”

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Hyperlocal Businesses Try New Revenue Models

Laura Hazard Owen — Thu, 27 Oct 2011 17:04:24 +0000

Hyperlocal startups in a crowded marketplace are testing new ways to stand out, and they discussed their strategies at the Street Fight Summit in New York City this week. Here are some lessons learned.

New Revenue Streams: When sites can’t compete on CPMs, where else can they find revenue? The St. Louis Beacon, a nonprofit online publication for regional news, sought to tie revenue strategies to its mission, business manager Shawn McGinness said. The site derives about 10 percent of its revenue each year from events. The Beacon also created what it calls “SpAd packages,” which give sponsors exposure on the site, at events and in printed materials and also provide them with engagement consulting to help them frame their message, design their ads and use social media. (Jeff Jarvis has previously stressed the importance of efforts like these.) And its coverage of the health/biotech industry, which makes up the bulk of the startup scene in St. Louis, has led to donations larger than those raised through typical development efforts.

For many sites, though, advertising is key. Display ads make up “95 percent, maybe 98 percent of revenue,” said Debra Galant, the co-founder of Baristanet in Montclair, N.J. Meanwhile, the site has scaled back its effort to offer daily deals. “We felt like we had to be in the deal space,” Galant said. “But it just doesn’t turn out to be a lot of money. Sometimes it makes sense for an advertiser; we have the apparatus there and can sell it, but it’s not our emphasis now.”

Success As a Standalone The key to starting a small hyperlocal site from scratch is to think about it as a business, as well as a journalistic enterprise, said LocalAmerica‘s editorial director Tom Grubisich, who moderated a panel on the topic. Baristanet’s Galant said, “We’re like the community elders. That’s how we stayed valuable.” How valuable? The site pulls in “well north of” $100,000 per year. “I’d like to see Patch sites as standalones competing against us,” Galant said, and “see how well they do without the AOL (NYSE: AOL) infusions.”

Scott Brodbeck, editor and publisher of Arlington, Va.’s ARLNow, said the journalistic product is the key to a good business. The site grew its audience by offering a “consistent product,” he said: all content is written by fulltime or freelance reporters with backgrounds in journalism. The site links to local blogs and their reporting, but “I don’t really view them as competition,” he said.

Going Hyperlocal In Silicon Alley A panel moderated by Curbed founder Lockhart Steele focused on the startup scene in New York City, and whether hyperlocal businesses started here can scale nationwide. It depends, said Owen Davis, managing director of early-stage VC firm NYC Seed: The “car culture” in other parts of the country may hinder the expansion of a startup focused on “trying get people to interact and purchase.”

Steele asked whether, given fatigue on the part of local merchants, startups are better off demoing a product outside NYC. “San Francisco is more fatigued than New York,” said David Tisch, managing director of seed funding firm TechStars. “Here you can test 15 different kinds of neighborhoods”–tourism- and finance-focused Midtown, neighborhood-y Brooklyn–without leaving the city.

The Next Big Thing (Hint: It Is Not Daily Deals) Offline retail is still an open space, said Tisch. “When was the last time your in-store experience was changed?” Steele pointed out that NYC is a great place to test a retail-based startup. Tisch mentioned Prism SkyLabs, which used footage from stores’ surveillance cameras to build heat maps of how people walked around the store and finding which aisles and shelves got the most attention. “That’s innovative,” he said, “taking existing technology and finding a data layer on top of it.” As for daily deals, Davis said it’s an oversaturated space with little new innovation.

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How long can AOL stay committed to Patch?

Mathew Ingram — Thu, 06 Oct 2011 22:04:48 +0000

Even before AOL’s future started to look dodgy — with speculation about the future of CEO Tim Armstrong ramping up, as the company’s financial underperformance continues — the rollout of the Patch.com hyperlocal news project seemed exceptionally ambitious. To create a thousand local newsrooms across the country felt a lot like a “boil the ocean” kind of venture, with impossibly high costs and a slim chance of success. According to some reports, AOL is now busy scaling back its ambitions for Patch as well as trying to cut costs, which could ultimately wind up jeopardizing what the project was designed to do in the first place.

A report by Jeff Bercovici in Forbes magazine says the 800 or so editor/reporters who run Patch’s local outlets “have been told their budgets for freelance assignments are being reduced, in some cases severely,” and content is also being re-used across multiple local sites within the Patch network. There have also been some reports that editorial staff within Patch are being asked to help with advertising sales, a move some see as crossing the editorial/advertising divide that exists in most journalistic entities. And there have been a couple of high-profile departures from the ad-sales side of the AOL unit, which doesn’t create a lot of confidence about how that part of the business is doing.

AOL is said to be committed, but for how long?

Patch president Warren Webster, however, has said in a number of interviews that AOL remains committed to the effort, and that reports of its imminent demise have been greatly exaggerated. He told Forbes that while editors in charge of some local Patch units have been working to help come up with advertising campaigns and ideas, this has been a result of their own initiative, not something AOL has forced them to do. And he told StreetFight — an online magazine that covers the hyperlocal sector — that the former web portal is pleased with the progress it has made so far:

We are succeeding on a number of levels, and our users and advertising clients remind us of that every day. Building something as ambitious and important to communities as Patch is a long-term investment… the company is very committed to Patch.

AOL’s management may be committed to Patch on an ideological level — the hyperlocal market has been a fascination of CEO Tim Armstrong’s since before he joined AOL, when he helped to finance Patch as an investor while still at Google — but the question of how long can it continue its financial commitment remains. The project has so far cost the company more than $130 million dollars, and if it reaches its goals, it could cost another $30 million or so (although Forbes says the 1,000-town goal is being downplayed). That’s a lot of money for a company that continues to post disappointing results, after reassuring investors numerous times that its balance sheet was close to turning the corner.

Not only that, but Armstrong has repeatedly promised that some Patch outlets would be profitable by the end of this year, and that window is quickly closing. According to some reports, the company is even spreading advertising sales around so that Patch’s better-performing offices look profitable, although Webster denied that this was happening in his interview with StreetFight. If AOL can’t show that hyperlocal advertising is a workable strategy, then the skepticism about the viability of the project is going to accelerate, to the point where Armstrong could find himself facing unpleasant questions from his board — like the ones Yahoo CEO Carol Bartz faced just before she was ousted.

Can Patch cut its way to profitability?

Webster told Forbes that the reduction of freelance content at Patch’s sites was always part of the larger plan, and posting content from other Patch outlets across the network also made sense, even if it stretches the concept of what local means. But those steps also feel like an attempt to get a handle on the millions being spent on the project — along with a recent shift in focus that is aimed at getting more bloggers to post their content to Patch’s sites free of charge (including one controversial effort that is targeted at high-school students), in the same way many contributors do to Huffington Post.

But are there enough bloggers who can fill that gap? And will AOL be sharing any of the advertising revenue it hopes to generate with them?

Huffington Post has also been rolling out more locally-themed topic pages, including several recent ones aimed at readers in Detroit and Miami — and these efforts have also caused speculation about whether the company is more interested in an aggregation approach rather than unique content, since the former is substantially less expensive. The problem for Patch is that the more its sites become lookalike aggregators rather than having a unique voice, the less likely they are to appeal to the market they are aimed at, and the less desirable they will be as an advertising vehicle.

AOL’s management may be committed to Patch for now, but the company can’t continue pouring money into an unprofitable entity forever, no matter how much Webster talks about a “long-term” investment. AOL doesn’t really have the luxury of thinking long term at the moment — Armstrong has to show some positive movement to investors or his job is likely in jeopardy, and without him Patch loses its biggest champion.

Post and thumbnail photos courtesy of Flickr user Stewart Chambers

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