After three years of Patch.com crumbling from its perch as “the next big thing hyper-local news coverage” America Online would have us believe that the news site network has finally stopped hemorrhaging cash—all it took was a dramatic de-emphasis of actual news.
Appropriately, just over a week ago, Brian Farnham left his position as Editor in Chief of the company—a departure that AOL CEO and Patch.com co-founder Tim Armstrong has said would not be replaced.
Despite the increasingly quick pace in which Patch.com sites have been devolving into glorified Facebook timelines, AOL representatives have recently been bragging about an increase in advertising revenue—$330 million for the first quarter of 2012.
But consider that this comes despite a four percent decline in all revenue and that the entire company was only able to report $21 million in profit for that same time period.
Add in the claims that Patch.com is losing about $500 million each year, and you can understand why Starboard Value—an investment firm with a 5.3 percent share in AOL—is calling for the company to ditch Patch.com.
In the happier days of 2009, AOL purchased the then-promising Patch.com, with big plans to expand the network and dominate the local news scene across the country.
The initial plan to rapidly expand into markets across the country generated a lot of fear among hyper local newspapers –many of which were struggling to stay afloat amid a floundering economy.
Luckily, for many of those threatened papers, Patch.com quickly went from expanding to having to reduce its stringer budget to the point where there is now very little news on the sites.
If you eliminate self-serving press releases, the occasional police log and surveys, what actual news can you find on Boston’s Patch.com sites?
Monday morning, there was a story about some people showing up for a duckling parade at the Boston Common and a ground breaking at Jackson Square in the Jamaica Plain-Roxbury area. Not exactly the sort of content that might threaten WickedLocal.com or Boston.com’s YourTown section.
In order to launch a variety of local sites, Patch.com poached Gate House Media newsrooms, dangling the carrot of autonomous news reporting with more pay to a slew of Gate House regulars.
It’s worth mentioning that many of these reporters were coming off of the summer of 2009, when they were required to accept a temporary pay cut in order to stay employed. There’s no doubt that pay cut was still fresh in the reporters’ minds when Patch.com came to the neighborhood.
Sadly, many of these new editors found themselves having to build a website of business listings, serving as glorified ad men and women. Couple with an ever-dwindling freelancer budget to make way for an increased emphasis in free content and you’ve got a news source that quickly becomes little than a community calendar with a police log depository.
As the sites have continued to drag down AOL’s financial performance, the company has scrambled to rethink its approach, because clearly internet viewers are much more interested in 5 tips for leading a boring existence, than actual news.
If Armstrong is miraculously able to get Patch.com to turn a profit by the end of 2013, that’s great for the countless local editors suckered into the gig, but it’s really hard not to be skeptical.