Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
After six years and more than $300 million, AOL (s aol) has finally called it quits on CEO Tim Armstrong’s plan to build a “hyper-local” journalism entity known as Patch, an effort that will undoubtedly go down as one of the longest-running and most expensive such projects in media history. On Wednesday, AOL sold a majority interest in the unit to Hale Global, an investment company that specializes in buying distressed assets from corporations like AOL. In other words, the bone-yard.
It’s hard to settle on a metaphor for Armstrong’s long-standing and ultimately disastrous commitment to Patch (which he co-founded before he became AOL’s CEO) because there are so many good ones to choose from. For example, there’s Captain Ahab and his fatal quest to land the giant whale Moby Dick — although Tim Armstrong has at least escaped with his life — or Don Quixote in Cervantes’ novel of the same name, a gracious but ultimately pathetic would-be knight who goes around picking fights with windmills.
We don’t know how much either Ahab or Quixote spent on their pet projects, but it was likely substantially less than AOL spent on Patch over the years — and while AOL has been coasting for some time on the hundreds of millions of dollars it still pulls in for dial-up internet access, it couldn’t afford to continue blowing hundreds of millions of dollars for something that was producing virtually zero return.
Hyper-local journalism just doesn’t scale
What makes Patch more than just another failed growth strategy from a faded internet giant is that Patch had a noble goal: to fill the media and information needs of small communities across the country who weren’t being well served by their local papers or the regional titles of large chains. Armstrong reportedly came up with the idea while driving home to his own neighborhood of Riverside, Conn., and within a year or two had convinced AOL to put a reporter in more than 800 towns across the U.S.
While its goal was noble, however, Patch’s whole approach to the problem was wrong, as I tried to explain in a recent post. The company tried to construct a kind of industrial model for local journalism — a cookie-cutter approach where each site and each journalist would stamp out more or less similar stories and content. But as the authors of last year’s Columbia University report on the future of journalism pointed out, we are in the “post-industrial” phase of media now.
The most successful “hyper-local” efforts — sites like West Seattle Blog and Howard Owens’ Batavian — seem to be those that emerge organically from within the community they serve, and are driven by the passion of local residents — and in many cases those of a single individual. Virtually every project that has been constructed by a major media entity, from AOL’s Patch to the ill-fated New York Times project known as The Local, has failed miserably.
In fact, it’s entirely possible that hyper-local journalism isn’t really a business at all, or at least not the way that Armstrong and Patch envisioned it — i.e., one that can scale from one or two sites to hundreds across the country. The AOL chief executive gave it the old college try, but even the vast resources of AOL couldn’t topple this particular windmill.