AOL’s biggest current push into journalism is in Patch, a spreading network of hyper-local community news sites, in which it is investing $50 million this year. AOL has been posting hundreds of openings for Patch editors across the country, along the lines of: “Journalists wanted. Small town news. Big time job.”

Armstrong was one of the initial investors in Patch, which AOL purchased in June 2009 (Armstrong says he recused himself from the negotiations and took back only his initial investment). Focusing on neighborhoods of 15,000 to 50,000 people, Patch news operations emphasize original reporting, whether about the local high school graduation or the city council fight over taxes. There were 100 Patches in nine states by mid-August; at least 400 additional sites in more than a dozen more states are projected by the end of 2010, particularly in areas where local newspapers have pulled up stakes.

Most Patch launches tend to in be middle-class to affluent bedroom communities, where demographics are attractive to local and national advertisers. Perhaps cognizant of that class divide, AOL started the Foundation in March 2010 to partner with local organizations in inner-city neighborhoods to fund Patch sites in underserved areas. In September, AOL announced the launch of PatchU, a program in which journalism students at a number of colleges and universities can intern at local Patch sites to get course credit and practical experience. The program, which partners with thirteen major journalism schools, offers hands-on training for students and provides a degree of journalistic credibility to Patch—and a source of free content.

Still, the landscape is littered with failed or gasping hyper-local sites, from independent start-ups like the defunct Backfence and the struggling NewJerseyNewsroom to legacy experiments such as The Washington Post’s defunct LoudounExtra and The New York Times’s The Local, which recently shut its three New Jersey sites and pointed readers to Baristanet. Even AOL, in the late 1990s, tested the hyper-local waters with Digital City, a partnership with Tribune Co., and found them too chilly. It was a different model—using reporters employed by Tribune newspapers—and a different time—fewer people had computers, there were no smart phones, and everybody used dial-up. Lack of scale was a problem.

And so was lack of engagement. People had been trained to expect local news to arrive only on a certain day via weekly newspapers, recalls Owen Youngman, then in charge of Tribune’s Digital City effort and now the Knight Professor of Digital Media Strategy at Northwestern University’s Medill School of Journalism. Youngman said success will still be a challenge, but if a local online news service can demonstrate comprehensive and continuing coverage of a big story, akin to news radio, he said, it’s got an opportunity to grow.

According to people familiar with AOL, local full-time Patch editors, who range from fresh journalism school graduates to twenty-year-plus veterans, make about $35,000 to $50,000. They are the 24/7-foot soldiers and they work hard at cultivating their Patches. Every one gets a Blackberry, laptop, digital still/video camera, and a police scanner to keep them up at night. None of them has an office. They are encouraged to work out of local coffee houses or other public venues where they are supposed to be in touch with their neighbors—and the local news.

Satta Sarmah is the editor of the Patch in suburban Rye, New York ( Sarmah, twenty-five, interned at CBS News London and the Columbia Journalism Review, and then worked at the Orlando Sentinel, CNN, and before joining Patch in November 2009. She got a scoop in June when coyotes attacked and slightly injured two little girls in separate incidents. Rye Patch broke the story of the second attack.

Typically, Sarmah said, she posts her first story between 6 and 8 a.m. and on some days may finish work after a city council meeting ends at midnight. She writes as well as assigns and edits her dozen-odd freelance contributors and manages a weekly budget. She is supervised by the Hudson Valley regional editors, Kathleen Ryan O’Connor and William Demarest. Patch supervisors are said to earn around $80,000, depending on experience.

On September 11, the Rye Patch news site led with a comprehensive rundown on the fall activities of local youth football, field hockey, soccer, volleyball, tennis, and cross-country sports teams. Also featured were stories about: local regulations governing the installation of residential walls and fences, and the intricacies of the “bagel tax” for local coffee shops. Then there were the usual events and announcements.

Lisa Anderson is a 2009-2010 Encore Fellow at CJR. She was the the New York bureau chief and a national correspondent for the Chicago Tribune until December 2008.