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Is micro-news the future?

AOL thinks so, and the Globe and GateHouse are fighting back
By CHRIS FARAONE  |  August 20, 2010

AOL is like the Energizer Bunny. It just keeps going and going through a staggering number of transformations and reinventions, and now it's betting $50 million that it can beat America's newspapers at their own game by providing local coverage so phenomenally complete, so microscopically granular, that soccer dads and zoning-board moms across the nation will collectively moan, "Give it to me."

Specifically, AOL is trying to corner the market on hyper-local news, which is the latest bright idea to sweep the communications industry. Ever since the online revolution decimated long-established advertising models and disrupted audience relationships, for-profit journalism has been engaged in a two-front existential conflict to redefine how it relates to readers and reinvent how it makes money. To date, relating to readers has proven easier than turning profits. AOL is itself a case in point — so far this year it has lost more than $1 billion.

Estimates of what the hyper-local market may be worth vary. New-media researchers at Borrell Associates in Virginia forecast that nearly $15 billion will be generated from local online ads this year, and even more important, that this number has been growing — by $1 billion since 2009. Publishers are betting on hyper-local ventures on the basis of two beliefs: first, that consumers want information that's directly relevant to their lives, and second, that while neighborhood businesses often can't afford ad space in major newspapers, they will take advantage of reasonable online rates. Still, not everyone's convinced that hyper-local is a wise investment, or even a major plus for civic-minded news.

"If there's any constant in American journalism, it's that local journalism has always been terrible," says Vanity Fair contributor and noted contrarian Michael Wolff.

Wolff owns, a worldwide content aggregator that he tooled to "put newspapers out of business." But he maintains there's no profit in local journalism online.

"There is yet to be a successful business model," he says. "Every one of these efforts has, to my knowledge, floundered on the fact that there just aren't enough eyeballs."

In New England, at least for now, these are the players trying to prove him wrong:

• the New York Times Company, which owns the Boston Globe and its 31 Your Town Web subsidiaries;

• the Framingham-based Community Newspaper Company (or CNC, a division of the larger New York–based GateHouse Media), which operates Wicked Local sites covering more than 150 Massachusetts towns;

• and AOL, which has established its Patch news sites in 13 commonwealth target areas, with 50 more in development from Back Bay to Cape Cod.

The Boston Herald will also be a player in this game, even if only by default. Their coverage area already includes many of the beats the hyper-local crowd have their eyes on.

"Boston is our neighborhood," says new Herald editor Joe Sciacca, who notes that his paper has long excelled at municipal sports coverage.

Given the generally gloomy forecasts for journalism these days, only uncertainty is certain: the news of stiff competition for hyper-local readers and ad dollars is either a sign of hope, or a decidedly counterintuitive plot twist.

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Related: News worth paying for?, Fourth-estate follies, 2009 edition, Murdoch mishegoss, More more >
  Topics: Media -- Dont Quote Me , Internet, Technology, Media,  More more >
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