To download the complete version of "The Story So Far: What We Know About the Business of Digital Journalism," a new report on digital news economics from the Columbia University Graduate School of Journalism, click here.

The most important example of that influence was the decision to fold TBD’s ad sales staff into WJLA’s, which led to the departure of the small digital sales team that Brady had assembled. “Selling digital is hard. I was adamant that the only way to be successful was to keep the sales force separate,” he says. The tension was visible from the start, Brady adds; an example is an ambitious launch sponsorship of more than $75,000 that his sales team planned to pitch to a local car dealership. WJLA intervened, arguing that it would damage a valuable relationship between the dealer and the TV station, Brady says.

“When I was at the Post, we were routinely doing six-figure online deals,” Brady says. “If the sales force itself doesn’t believe digital is worth it, how are they going to sell it? To just assume nobody would ever spend that much online is insecurity with your own inventory.”

Just as revealing as what went wrong is the list of things TBD seemed to have going for it, which help to clarify the intense interest local online news ventures have drawn for the last five years. Most important was its association with sister site, another well-funded, generously staffed Allbritton venture led by high-profile news veterans. Like Politico, TBD promised to be not just on the web but “of the web,” in Brady’s phrase, meaning that it would link abundantly, deploy social media aggressively, and engage closely with users. And like Politico, TBD promised to deliver to its advertisers a well-defined audience—not just generic news consumers, but people intensely interested in the particular news it had to offer. (Still, it is worth keeping in mind that at least through 2009, Politico earned more than half its revenue from its free, ad-supported print edition, with a circulation of about 32,000.)

TBD also sought to strike a balance between focus and scale: Visitors would be drawn in by news about their immediate environs or interests, but behind the scenes the operation could reap the “efficiencies” of serving a large metropolitan area. (Brady insists “hyperlocal” is the wrong word for what was really a regional site with a neighborhood interface.) Likewise, the site would include a mix of aggregation and firsthand reporting. To describe the site, Robert Allbritton has used the analogy of a supermarket bringing together items that previously could not be found in one place. Before TBD, he declared when the site launched, finding local news online was “like trying to buy groceries in the old country. First you went to the fishmonger, then to the baker, then to the grocer, and so on.”

Other hyperlocal ventures have tried to apply versions of that idea on a national scale. A good recent example is Main Street Connect, a “national community news company” that went live in 2009 and consists, so far, of ten sites serving towns in Fairfield County, Conn. The separate sites share editorial resources (neighboring communities see many of the same articles), technology infrastructure, and an ad sales team. “We’ll soon be bringing our vision to other groups of towns,” Main Street’s website promises. “Watch for us.”

By far the grandest of the new hyperlocal journalism ventures is the nationwide Patch network, which was bought by a struggling AOL in 2009. With sites in 700 communities and counting as of March 2011, each led by a local editor making $40,000 to $50,000 a year, Patch has turned AOL into one of the biggest sources of new journalism jobs in the country. Visitors to a local Patch site see news and information about a specific community, written and curated by people in that community, whether it’s Dublin, Calif., or Dunedin, Fla. (In March 2011, AOL also bought, a hyperlocal network that automatically aggregates news, blog posts, police reports, and other public data, and says it is in 57,830 neighborhoods. Reports suggest AOL was interested in the underlying technology more than the business itself.)

Bill Grueskin, Ava Seave, and Lucas Graves are the co-authors of "The Story so Far: What We Know About the Business of Digital Journalism." Grueskin is dean of academic affairs at the Columbia University Graduate School of Journalism. Seave is a principal of Quantum Media, a NYC-based consulting firm. Graves is a PhD candidate in communications at Columbia University. For further biographical details, click here.