David Carr essentially wrote the obituary for AOL hyperlocal network Patch on Monday, but rumors of AOL CEO Tim Armstrong’s pet project’s demise may have been exaggerated, at least for now.
“Mr. Armstrong came close to betting the company and his future on Patch, but in the end, his survival instincts and shareholder pressure compelled him to let the white whale swim away,” Carr wrote, announcing that Armstrong will begin “winding down” Patch.
But in an internal memo leaked to Business Insider, Patch COO Leigh Zarelli told employees not to begin mourning quite yet.
“We are continuing to talk with potential partners about Patch and there is no change in course or direction from what we have discussed as a team,” Zarelli wrote. “Patch gets and will get a lot of media coverage, but we will keep you updated as we walk through the partner talks.”
Patch’s struggles have been extensively covered over the last year. Armstrong announced early in the year that Patch would be profitable by the end of 2013. A third of its sites were shuttered in pursuit of this metric, and hundreds of employees were laid off, including creative director Abel Lenz, fired in the middle of a company-wide conference call in August. (Armstrong later apologized to him, but didn’t rescind the decision.)
Now that 2014 is two weeks away, Carr declared Armstrong’s goal of profitability futile. But in Carr’s conversation with Armstrong, the CEO was not yet ready to eulogize Patch, which he cofounded and AOL purchased when he began his tenure there.
“Patch has more digital traffic than a lot of traditional players have,” [Armstrong] said in a phone call on Friday, still defending his pet project. “The long-term vision was clear: If you get the consumer, can you get the revenue? And we have a whole bunch of Patches where the answer is yes. But we rolled it out on a national basis and we’ve had to adjust based on the investor commitments that we have made.”
Joining Carr in heralding Patch’s demise, Gawker’s Hamilton Nolan declared the project a good idea that will nevertheless be unable to reap the rewards of local advertising money. Nolan criticized Patch for prioritizing a national network over a slow build-up—the company, founded in 2007 in New Jersey, had scaled to some 900 sites nationwide by 2010—and questioned its ability to snatch readers from established local newspapers:
In summary, Patch either needed to invest more in a smaller network of local sites that were actually successful, and expand organically, and cut the unsuccessful sites as they went; or they needed to find a way to spend even less on an even more comprehensive national network of hyperlocal news. The first option would not have satisfied Tim Armstrong’s grand vision. The second option already exists, and is called Twitter.
Jeff Jarvis also praised the idea of hyperlocal news while blasting Patch for what he described as the network’s unsustainable expansionism.
“Hyperlocal will scale — as it is only beginning to in New Jersey — by helping these independent sites in a larger news ecosystem bring together their content, audience, advertising sales for mutual benefit,” Jarvis wrote Monday. “Patch could have been that network. Instead, it thought it could own — it could be — the ecosystem. Nobody can do that.”
Jarvis, who noted that he served as an early, unofficial advisor for Patch, worried that its failure could lead to a larger disruption of hyperlocal.
“I still believe in Armstrong’s vision that local communities need local information,” he wrote. “But now I fear that its slow, tortured fall could — in the words of a friend — bring nuclear winter to hyperlocal.”
GigaOm’s Mathew Ingram similarly noted that scaling tried to solve hyperlocal with a mass-produced answer, when it’s an arena that demands “artisanal” journalism.