Won't Replace Local News

Web Giant's Tillinghast Talks About Acquisition of Startup and the Need to Find 'Solid' Online Revenue Models

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NEW YORK ( -- Among the conundrums left by the newspaper die-off: What is the new model for local news and information, once the sole province of community newspapers? snapped up one of the more promising efforts, will continue to build out additional cities, but it will get a whole lot more traffic from will continue to build out additional cities, but it will get a whole lot more traffic from
The startup, founded by programmer and journalist Adrian Holovaty, was funded by the Knight Foundation's "news challenge" program, an annual contest for innovations in local news. President Charlie Tillinghast sees as a differentiated entree into local journalism for the behemoth news site, which until now has relied on aggregated stories for its local coverage. The NBC Universal and Microsoft joint venture paid an undisclosed sum for the startup, which completed its obligation to the Knight Foundation in June, including building the platform, launching it in 15 cities, and releasing the code to the public. will continue to build out additional cities, but it will get a whole lot more traffic from, by some measures the biggest news site on the web. creates no information of its own, and has no pretense of replacing local newspapers. Rather, it aggregates news stories, blog posts, Flickr photos and Twitter blurbs by neighborhood name or ZIP code. In addition, it surfaces the valuable public records that serve as source material for local journalism: property transfers, foreclosures, crime, restaurant inspections and building code violations. "All this is great data, and it's news," Mr. Holovaty said.

It's the latest attempt by big media to figure out local news. AOL snapped up, which launches local news sites in small communities, and the New York Times and other dailies are experimenting with blogs in Brooklyn and suburban New Jersey. Mr. Tillinghast believes can play a part in the local ad market, thrown into disarray by the collapse of newspapers, local TV, and the yellow pages.

Charlie Tillinghast
Charlie Tillinghast Credit:
Ad Age: How does fit into's strategy?

Mr. Tillinghast: We are not new to local but we have not had a differentiated offering. We are basically providing links to other sites but we have some concern about the breadth and depth of those providers as the economy gets worse and worse for local media.

Ad Age: But don't services like compete with local news for eyeballs and revenue?

Mr. Tillinghast: They are bringing municipal data and making it available -- and that is a net addition. It is different than putting journalists out there and having them report the news in a traditional way. We view this as complementary to local media; it's not an attempt to take a bite out of them. is filling the gaps -- and not only that but providing vastly more information than local media ever reported.

Ad Age: As a startup, has little revenue. What do you see as its business model?

Mr. Tillinghast:We are going to be experimenting with a variety of local revenue models and seeing what works. There is a lot of experimentation in the space right now and we are going to be part of that. I am confident we will find a good way to monetize it.

Ad Age: The local ad market is big, fragmented and kind of up for grabs. How do you see MSNBC's play in it?

Mr. Tillinghast: It is undergoing massive change at the expense of local news providers. I see it as going through a period of chaos out of which will emerge solid but different revenue models for people who offer content locally. I don't profess to know what those models are, but you have to be in the game to figure it out. You can't figure it out in a conference room looking at a whiteboard.

Ad Age: Is there any synergy here with some of the ad products and technologies owned by Microsoft?

Mr. Tillinghast: The synergy here is with MSN in terms of being able to fill its [local] needs. We are the news provider for MSN and in this case we are extending it to local news.

Ad Age: Why did you go after and not one of the other startups in the space, such as

Mr. Tillinghast: We did not go out and do a comprehensive inventory of sites with the idea of acquiring one. We were impressed with Adrian, and started out talking about ways to work together. Those talks turned into an investment, which morphed into an acquisition.

Ad Age: If local is such a big an important market, why not put journalists there and syndicate your own content?

Mr. Tillinghast: For us to hire a reporter for every municipality is not workable. We would also upset local providers. My biggest worry is the incumbent news providers go out of business. Then you have a huge vacuum and a wild scramble to fill it. That may or may not be good for the community.

Ad Age: Does provide any benefit, then, to local media other than referral traffic?

Mr. Tillinghast: We have partnerships and now we may be able to offer more than just traffic to them. Maybe we can offer some data. We are contributing to the overall mix of content not simply aggregating, parsing it out, or referring people to content that's already there.

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