One of the Dispatch’s biggest challenges has been to forecast the amount of ad space, or inventory, it will have each month, because this fluctuates greatly depending on how much traffic the site gets. On occasion, the site has had to turn advertisers away. To deepen and diversify its inventory without taking on too much risk in increased editorial costs, Hopfinger plans to bring established Alaskan blogs into the Dispatch under a revenue-sharing agreement.

At first glance, the statewide profile of the Dispatch seems to set it apart from smaller local sites. But Rogoff and Hopfinger stress that Alaska’s agenda-setters constitute a kind of village, one spread among Anchorage, Juneau, Washington, and Houston. They share a narrow and well-defined set of interests: federal funding, government regulation, the oil industry (hence the Houston link), transportation, Sarah Palin, and so on. One of the site’s most successful features is its “Bush Pilot” blog, focused on the small-scale aviation so critical to Alaskan life.

“It’s like a small town,” Hopfinger says. “The flipside of that is there are fewer people and fewer businesses.” But he adds that the Dispatch has benefited from the kind of boosterism that smaller community sites enjoy. “You get an opportunity as an underdog. People want to see us succeed,” he says.

An emphasis on a small and well-defined community sets apart most of the online-only local news outlets that began to dot the web about five years ago. These run, generally, from professionally staffed hard-news outlets such as the Dispatch to news-oriented community blogs like Baristanet and West Seattle Blog. Wherever each site falls along that spectrum, none of these grass-roots ventures has either the assets or the built-in costs of local sites backed by established newspapers or television stations. (For a detailed discussion of costs, see Chapter Seven.)

The grass-roots sites also face a different set of problems than do large-scale, networked hyperlocal ventures such as Patch, and, to a lesser extent, the original TBD. Patch is hardly a legacy newsroom. But it does have to succeed on a scale that justifies AOL’s vast editorial, infrastructural, and ad sales investments (and that compensates for the company’s declining income as an Internet service provider). If only a few of the 700-plus Patch sites take root and thrive in their communities, that won’t be enough for the enterprise to succeed; for the business to make sense, the bulk of them have to work.

These distinctions suggest two axes for plotting the local news ventures working online, depicted in the chart shown here. The vertical axis distinguishes online-only outlets from those that also have traditional print or broadcast assets. The horizontal axis arrays organizations according to their editorial footprint: single-site, hyperlocal outlets covering a community or neighborhood; sites or small site networks covering a cluster of communities; and site networks with a regional or national scale.

The local news sites on the top half the chart are tied to substantial legacy operations, whether they are based in one city or spread across a chain of newsrooms that share back-end resources. These sites enjoy the same advantage in serving their local audiences that the New York Times site does in delivering national news online: access to the editorial resources of established professional newsrooms. But that editorial product published online yields only a tiny fraction of the ad revenue that it does in print or broadcast. The health of these sites is effectively wedded to the health of their traditional parents.

The hyperlocal networks in the bottom right quadrant don’t have legacy newsrooms to draw on. They must either build an editorial staff from scratch, like Patch and Main Street Connect, or cull local information from public sources and other sites, as do EveryBlock (now owned by MSNBC) and Outside.in. Their key asset lies, potentially, in uniting hundreds or thousands of hyperlocal channels with back-end infrastructure for selling and serving advertising.

It is easy to understand the argument that these networks ought to occupy the sweet spot for hyperlocal news. Like a stable of trade publications or a chain of small newspapers, Patch can pull together a large audience out of many small ones. Its size should confer advantages unavailable to local competitors in the individual markets where it operates: lower costs, better technology, access to bigger advertisers, and so on. And as noted above, those markets have been carefully selected for their commercial potential.

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.