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Patch Traffic Triples in 2011; Company No. 4 Behind Yelp, Yahoo, and City Grid

Patch's "hyperlocal" platform climbed 6 spots on comScore's list of Internet players from just one year ago. We fall in line behind three of the biggest names in business... and continue to grow.

As editor of this little enterprise I am responsible for sticking close to the constituency -- you -- and trying to give you the information you need to stay informed and, maybe, have a little fun.

As a result, I have a pretty good sense of what our readers want, what they like and don't like, and if they're interested in what we're doing. In the year and a half we've been up and running I've seen exponential interest and a dramatic spike in readership here. That makes me feel really good, of course, but I thank you for visiting -- and staying.

Please find a news item released Tuesday to mark the achievement, documenting our climb and apparent acceptance into your very busy lives:

 

PATCH BECOMES #4 COMSCORE REGIONAL/LOCAL PROPERTY;

TRAFFIC MORE THAN TRIPLES IN 2011

Hyperlocal platform climbs 6 spots on comScore list from just one year ago

January 10 - New York, NY: Patch, AOL’s platform of over 850 hyperlocal news, information and engagement sites, is now the fourth largest regional/local property, more than tripling its UV traffic between December 2010 and December 2011, per the comScore data released this week. In addition, in December 2011, Patch showed a 5% traffic bump over November (9.9M UVs versus 9.5M UVs), bucking the trend of seasonal declines in comScore’s local news and information category.

“Given that the average Patch site is just over a year old, we couldn’t be happier with the traffic growth we’ve shown to date,” commented Warren Webster, president of Patch Media. “We are incredibly proud of the role we play in our communities every day - and of the consistent positive feedback we receive from our users - so seeing this rise in traffic is very gratifying for our entire team.”

The other properties in the category are Yelp (#1); CityGrid (#2), Yahoo! Local (#3), and CBS Local (#5).  In December of 2010, Patch ranked #10 in the category.

Patch currently has 863 sites in 22 states plus Washington, D.C., with over a thousand professional journalists managing those sites and over 13,000 bloggers contributing content. In recent weeks, Patch launched its first three Patch Latino sites and its coverage of the 2012 election season across its primary-state Patches and beyond.

Patricia Soto January 10, 2012 at 10:33 PM
AOL Should Take ‘Immediate Action,’ Investor Starboard Says “This valuation discrepancy is primarily due to the company’s massive operating losses in its display business, as well as continued concern over further acquisitions and investments into money-losing growth initiatives like Patch,” Starboard said in the letter" http://www.businessweek.com/news/2011-12-22/aol-should-take-immediate-action-investor-starboard-says.html
Patricia Soto January 10, 2012 at 10:35 PM
Analysis Indicates AOL Hemorrhaging Cash Thanks To Patch, Other Woes Much of the company's financial woes are attributable to Patch. Patch is AOL's attempt to create web communities and advertising focused on specific real-world towns and communities. In theory, users in such areas are hungry for online sources that cover their own local news and events. In practice, things don't seem to be working out that way. So how much money did Patch lose? Business Insider thinks Patch lost at least $100 million this year, which would make it a definite boat anchor in terms of AOL's overall business performance. AOL CEO Tim Armstrong bet on Patch as a way to differentiate AOL from the likes of Google and Yahoo; personalized, community-focused news is the engine he bet would drive readers to AOL-owned properties. It's not working well. Worse, it's not clear it'll ever work well. The problem with Patch is that it's trying to drive revenue based on a relatively small number of sales in a huge market. Margins are small, site expansion is both time-and-labor intensive, and there's no sign of a crucial tipping point that'll start driving readers en masse to AOL properties. http://hothardware.com/News/Analysis-Indicates-AOL-Hemorrhaging-Cash-Thanks-To-Patch-Other-Woes/
Kathleen January 10, 2012 at 10:37 PM
It's certainly not unprecedented for a business to lose money at the start; that doesn't mean Patch isn't doing a good job of providing local news and rich content. The field of journalism is struggling to adapt and create a new model. I think many of us would say that Patch provides value -- localized information and the chance to communicate with our neighbors through the comments -- that we appreciate and don't find anywhere else. It will be up to AOL to determine whether they can continue under these conditions.
Patricia Soto January 10, 2012 at 10:51 PM
Spoken like the NON-AOL-investor that I'm sure you are. AOL has an obligation to its shareholders, such as myself, to make money or ditch the dead weight. AOL isn't some cutesy start-up that has the luxury of "losing money at the start," and for the record AOL is well past its "at the start" point in the business model. "... good job of providing local news and rich content" is up for debate as well - by his own admission in a front page story, the "Editor" makes vague reference to local town rumors about a possible business closure in Moraga. If that was MY business ... I wouldn't want such town gossip about my restaurant being reported on a "news" site. Indeed, you are correct, it seems that the biggest benefit derived by Patch's audience is the ability to swap comments in an online forum ... making Patch a BLOG, not a news site.
J.D. O'Connor (Editor) January 10, 2012 at 10:53 PM
Buzzkill... no, I'm kidding. All of this is out there and has been discussed, is being discussed, a lot. And I for one think that's a good thing. One thing to consider, however, is that initial expenditure went into hiring editors and writers and buying the gear we all use to cover our communities. As for Lamorinda Patch, we've nearly run out of advertising space... and our readers are investing in us, and other Patches, in number. Thanks for reading! Ed.
Chris Nicholson January 10, 2012 at 11:06 PM
The Patch growth stats are misleading. All growth from a zero base looks "exponential" and it is easy to show system-wide growth via rapid expansion of storefronts. Ask Krispy Kreme about that. The critical analysis is to look at the "same-store" stats year over year for the "older" (older than five quarters) Patches. From this data, you need to look at the unit economics of a single Patch. First look at direct expenses (JD's salary and budget) versus direct revenue (ad sales). If revs <= expenses at this level, the future is not bright, because you also need to eventually cover allocated overhead for technology, marketing, corporate functions, etc. Of course, AOL will not release enough info to make a thoughtful assessment of any of this. If I were an AOL investor, I think it would be reasonable to conclude that Patch is a dumb investment on the part of AOL (with "dumb" defined as having a negative expected ROI). If Romney were in charge (you know, after he "comes to town") he would surely fire everyone and shut it down. As a consumer, however, I am happy to enjoy the "free" service while it lasts. I just hope that JD's contract does not include a non-compete (generally not enforceable in CA, unless he "sold" them the old site instead of just "took a job" at Patch) so that if AOL ever pulls the plug, he can roll this community onto a different platform.
J.D. O'Connor (Editor) January 10, 2012 at 11:06 PM
Patricia -- Your opinion is welcome and your stance as an investor appreciated. Good luck with that. We'll just keep churning it out, providing readers with real-time news and information. I don't feel the need to list our successes but the impact on our three communities is broad and felt every day. How can I tell? Our readers tell us so... As for your interpretation of what is news -- and not -- I believe you will find that subject open to debate on many levels. Again, best of luck with your endeavors. J.D. O'Connor/Editor
Patricia Soto January 10, 2012 at 11:08 PM
"Buzzkill... no, I'm kidding." Stay classy, Patch! Believe it or not, it is possible to keep the written word alive and well - and in its proper format - even in the tech-heavy, Twitter-dominated year 2012. There is a world of a difference between the WSJ and NY Times that well-read, well-educated local "folks" as you call us read, and the drivel that appears in blog format on this site. Just as manners will never go completely out of style, proper English, appropriate grammar and quality writing has a place, too. The "Ed's" use of shorthand, ridiculous phrases and other intellectually-insulting comments, lines and headlines suggests he is catering to the lowest common denominator. I'm not a mathematician by trade, but I do have a calculator and can crunch the numbers. As a close friend and confidante of a former "Ed" of a Patch in a similar market with similar target audience, I am intimately aware of what it costs to employ you "Ed" types ... so please don't tell me that my struggling AOL shares are because of upfront costs to staff these pages.
Chris Nicholson January 10, 2012 at 11:10 PM
Patricia: When exactly did you buy your stock? At what point in time did you think that Armstrong's plan was ANYTHING OTHER than to make aggressive/risky moves to grow revenue in the face of a steady erosion of the traditional AOL business? Did you fail to do your Due Dil on this bet? Or maybe you are trying to be an activist and get him to change his strategy.
J.D. O'Connor (Editor) January 10, 2012 at 11:11 PM
Et tu, Chris? ;-} Editor/Minion/Destroyer of Language JD
Steve January 10, 2012 at 11:11 PM
I'm a fan of LM Patch but also an AOL shareholder and a realist. The notion of of a hyperlocal blog is extremely appealing to most consumers, making money doing it is an entirely different challenge. AOL is bleeding money(the stock is down 35% over the last year) and converting traffic to ad revenue has yet to happen in a meaningful way with the Patch enterprise. I hope you guys make it JD, but as you say, be careful out there. I'm not sure this thing will make it.
Patricia Soto January 10, 2012 at 11:11 PM
Thank you, Chris Nicholson, I should amend my will and leave you my AOL shares. Yep, dumb of AOL to invest in Patch, and perhaps even dumber of ME to invest in AOL. You've hit the nail on the head, this is a "free" service and you get what you pay for ...
J.D. O'Connor (Editor) January 10, 2012 at 11:14 PM
Thanks, Steve, "careful" is my middle name. All best, JD
CJ January 10, 2012 at 11:17 PM
PS-You're punctuation is a little lacking............. Just saying.
Chris Nicholson January 10, 2012 at 11:17 PM
Just keepin' it real.
Patricia Soto January 10, 2012 at 11:22 PM
Great question, Chris. I want a strategy change, STAT. Steve, I have no problem with the risk factor. But at a certain point you have to stem the bleeding. And in the meantime, stop calling yourself something that you're not - this is a community blog, an online forum with a hyper-local twist. This is not real journalism. It is not quality reporting. 2 of my 3 children are active (and love) the high school newspaper class they participate in - and I assure you, even with their iPads, iPhones, Facebook and the like, this class does not EVER teach students to follow this type of "writing." It is possible for the well-written word to survive, just not on Patch, apparently.
Chris Nicholson January 10, 2012 at 11:25 PM
Don't get me wrong, Patricia, I respect JD and like it here (many would say I like it too much). I'm just trying to point out that the "front of the office" (editorial / readership) is quite different from the financial side of the house. It is not uncommon for news organizations to do great work up until the day they go bust. But, as a consumer, why should I care? Enjoy it while it lasts and even bankruptcy might not spoil the fun. I flew United on an outbound leg and then they went bankrupt and then I flew home. Nothing changed.
Chris Nicholson January 10, 2012 at 11:27 PM
Umm--- if you think the status quo model burns cash, what would it look like to staff-up and deliver the service that you seem to want?
CJ January 10, 2012 at 11:30 PM
PS- Show me where you can find "real" journalism anymore? I mean unbiased real, current and relevant investigative journalism? I am sure I could shoot a hole in any you mentioned previously NYT for sure and WSJ (much less biased than NYT). The Patch is definitely not "journalism". It is blogosphere marketing. I had my issues with it at the beginning and came back to just antagonize the status quo around here for fun.
Patricia Soto January 10, 2012 at 11:35 PM
That's just it, we don't need to be pouring any amount of money into this service. AOL is spending a bloody fortune on an industry that we all know has been dying a slow and ugly death. Why sink the cash into a sinking ship and not even give it the proper tools to right itself? And why try saving the sinking ship in the first place? If you want to be a news site, do it the right way - yes, fine, take the risk and sink tons of cash in for the initial investment, but invest in the right people - not people who blog about hookers and hoofers. If you're content with a site that headlines hookers and hoofers, maybe invest a wee bit less. Sure enough, United is a bankrupt airline. And if I was a shareholder, I'd expect them to tidy up their spending, pronto. But at least their employees still respect certain industry standards when they fly the friendly skies. I'm not seeing the same on this site - again, young journalists in our high schools aren't looking to this "news site" for inspiration.
Brad Katkowsky January 10, 2012 at 11:36 PM
I'm with CJ. I hate patch so much I read it three or four times a day.
CJ January 10, 2012 at 11:46 PM
United Air? The one we all call Hag Airlines? The one that cannot fire even the most rude and obnoxious flight attendant? The one my friends who fly to Asia(regularly) refuse to fly on anymore? That United? If that is "respecting certain industry standards" give me a the alternate.
CJ January 10, 2012 at 11:53 PM
Hate is too strong. How about a general disdain? Like an old girlfriend I cannot seem to break up with. She just keeps pulling me back in.....(in my best Al Pacino voice)
Patricia Soto January 10, 2012 at 11:57 PM
Agreed, a hundred times over: The Patch is definitely not "journalism". It is blogosphere marketing. I had my issues with it at the beginning and came back to just antagonize the status quo around here for fun. #1 - it's blog-land. And the whole reason I signed up to comment in the first place is I'm tired of a company I'm invested in pouring so much money into blog-land and trying to tell investors it's news #2 - the comments, by and large, are tongue in cheek and meant to antagonize one another. Would you make these comments to somebody live, in person, while standing in line at the grocery store? Would you speak this way to the driver pumping gas one stall over at Shell or Chevron? I would hope not. We all feel witty and emboldened in this online format, but this is not something a company should sink so much money into.
Zoe Claire January 11, 2012 at 12:17 AM
YOUR comments, at least, are primed to antagonize. One thing I've liked around here is how few of them are. I don't write anything I wouldn't say to someone in person, believing in your rule, and no one has ever come back in the manner you suggest. Do you live in Lamorinda??
Patricia Soto January 11, 2012 at 12:27 AM
Indeed, live here, but have never seen "Ed about town" around these parts (though admittedly, I don't WORK in town).
Nancy Lee January 11, 2012 at 12:28 AM
Let me see if I have this right. A woman makes an investment she regrets and then signs up with the company's news service to take out her frustration on one of its sites -- which she is clearly only just starting to read. Makes perfect sense...
natalie johns January 11, 2012 at 03:03 PM
Jd do you remember that really odd woman from San Leandro or Lorenzo or somesuch who came through the site doing much the same as this Soto person? She did pretty much the same thing, didn't know the site and tried to pass herself off as a local???
John January 11, 2012 at 03:20 PM
Keep up the good work JD. The site is a valuable service to the community.
J.D. O'Connor (Editor) January 11, 2012 at 03:30 PM
Thanks, John, it's a thrill a minute and lots of fun. Thanks for your support! JD

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