GEEKNOTE: Thursday's Wall Street Journal carried a headline that caught my attention: "AOL Deal Unloads Majority of Patch"
Yep, THAT Patch. Or should I say "This Patch"?
Quite a few of us were disappointed when Alex Tiegen became one of the casualties this past fall when AOL cut the Patch staff nationwide in half. The New Port Richey Patch just hasn't been quite the same since.
The problem AOL faced with Patch is one that is common on the Internet: How to make enough on a website to justify the cost.
With ecommerce sites, the solution is fairly straightforward. You simply have to sell enough of your widgets to cover the cost of the website. eBay and Amazon are two examples of ecommerce sites that take a piece of each sale to cover their expenses. Likewise, some of the catalog businesses likely do quite well with their websites and save the cost of mailing bulky catalogs to boot.
Some of the penny auction sites charge for bids and make their money there. If you charge $1.00 a bid and sell an iPAD for $40.25, you've still made a killing by collecting the 4025 $1.00 bids that led up to the sale, plus the $40.25 sale price. (I don't recommend you try to buy stuff on penny auction sites.)
Some companies, mine included, run websites that function primarily as support sites for our existing customers and as sources of general information about our products and services to potential new customers. The sites are not designed to collect money and were never intended to be a revenue source. That is okay.
News and media sites have a special challenge. Conventional news sources like newspapers, magazines, radio, and TV stations all depend on advertising in order to survive. The information that they provide IS their product.
Some news organizations, such as the Wall Street Journal and more recently the St. Petersburg / Tampabay Times, have gone the subscription route for their websites. With some rare exceptions, this has not generated the sort of subscription revenues necessary to fund their news gathering operations.
That leaves online advertising. This is the model that Patch has used to date and they have bled millions of dollars trying to create a business model that can be self supporting. Unlike the Times or the Journal, Patch does not have a companion print edition where people are accustomed to paying for a subscription.
Hale Global, the new owners of Patch, have indicated that they are going to relaunch Patch with changes that will make it more attractive to mobile users and allow companies to self-post ads rather than depending on a sales staff like before.
Will this work? I think it is too early to say. There are certainly other companies (Google and facebook, to name two) that allow you to post advertisements without dealing with a sales staff. I've done some advertising on both Google and facebook, with limited success.
I think it will be interesting to see if Hale Global will be able to attract the sort of advertising necessary to again fund local reporters or if we will continue to simply see republication of news from other sources and generic articles that aren't specific to our area.
Done right, hyperlocal news sites like the New Port Richey Patch are a valuable resource to the community. I'll be rooting for the new owners of Patch and I hope that they are able to turn it around.
Rob Marlowe, Senior Geek
Gulfcoast Networking, Inc.
