At one time, AOL had hoped to reach 1,000 Patch sites by the end of 2011. But now comes word that Patch is slightly scaling back its efforts in some markets, fueling speculation inside the hyper-local news organization that Tim Armstrong's big local bet was a bit too ambitious.
In the past week, Patch has merged three pairs of sites: Franklin Lakes and Wyckoff, and Glen Rock and Ridgewood in New Jersey, where Patch got its start, as well as Clayton and Concord in California. While Patch still consists of 860 local sites, a person familiar with Patch's plans said that if Patch executives are pleased with the results of these mergers, the company would carry out more in the first quarter of 2012.
Patch spokeswoman Janine Iamunno said that Patch has merged sites in one-off cases in the past, and did not deny the possibility of future mergers. "It's not some shift away from what we're doing," she said, "but if it makes sense to do it again, we will." She said the company still plans to launch new Patch sites before year's end.
Blog posts announcing the mergers in each of the three markets all mentioned that the mergers were carried out to better serve both readers and advertisers. Still, Ms. Iamunno insisted that the ideas for the mergers came from editors covering the beats, who felt that there was too much overlap in news coverage between the towns.
"This was an editorially driven decision," she said.
Yet internally, AOL is in the process of figuring out just how small (or large) a Patch should be, a calculation that includes available readership and just how "hyper" local advertisers want to go.
In the fall, Patch editors had their freelance budgets slashed as executives pushed to make the business more financially sustainable. In the past month, a slew of national advertisers have been spotted on Patch sites, including Target , LL Bean, and AT&T to name a few. But in a recent interview, Jon Brod, president of AOL Ventures, Local & Mapping, said that the focus is still on what the company calls "local-local" advertisers as well as "regional-local" advertisers, with whom Patch has yet to have much success. Mr. Brod said that Patch will continue to roll out a new assisted self-service ad platform to help better monetize the local advertising markets. The platform consists of three segments of tools for local advertisers: one to generate leads, one to build brand awareness, and one to offer deals, he said.
Mr. Brod also noted that outsiders who judge Patch for not yet achieving profitability should keep in mind that Patch sites on average are just a little more than 12 months old.
Yet, it's not clear how much longer AOL has to prove that the big bet on Patch will pay off.