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Mark Josephson, who lead sales and marketing at Patch for the past two year has left the company. Josephson was CEO of equally poor performing Outside.in when it was acquired by AOL two years ago.
AOL’s content group posted a loss of $5 back in May, making $146.4M on its membership business. Yes, that’s people dialing into the internet through AOL.
I’ve maintained for years that Patch would never take off (see We Don’t Want Hyperlocal News, We Want Social News), and I wrote similar observations about Outside.in back in the early days (see Jarvis Is A Local Yokel, and First Look: Outside.in), and other hyperlocal bellyflops (see Everyblock is yet another proof point that no one understands hyperlocal, if it means anything at all).
Josephson probably just got tired of beating his head on Tim Armstrong’s $100M investment in Patch, which is going nowhere.
It’s time for AOL’s investors to can Armstrong, shut down Patch, and let Huffington steer the company somewhere, using the cash flow from the declining membership business to build something new.
Everyblock is the newest hyperlocal bellyflop.
Jeff Sonderman, NBC closes hyperlocal, data-driven publishing pioneer EveryBlock
NBC News has shut down EveryBlock, one of the early pioneers of data-driven hyperlocal community news and information.
The decision took effect today.
The site started under a $1.1 million grant in the first-ever Knight News Challenge in 2007.
After the conclusion of its Knight grant, EveryBlock was acquired by MSNBC in 2009and the data-driven site relaunched with a community focus in March 2011. Ownership transferred to NBC News last summer when it acquired full control of msnbc.com.
Founder Adrian Holovaty left the company last August. At the time, he reflected upon major points of impact, including jumpstarting movements toward open data and custom maps, strengthening neighborhoods in the 16 cities it served and releasing source code that inspired other projects.
Leaving the specifics of Everyblock to one side, its just another example of completely not understanding the intersection of local/social. Other examples: Outside.in (acquired by Patch), Patch (not yet shut down, but will be as soon as Arianna Huffington becomes CEO of AOL), Bayosphere (acquired by BackFence), and Backfence (now dead).
No one understands hyperlocal, yet.
Simon Bond mentioned a BBDO study on mobile yesterday at Pivot, and after I tweeted one datum from it my intrepid pal Paul Higgins tracked it down:
- Mobile isn’t always on the go. In fact, well over half of all mobile interactions measured in the research occur in the home, challenging conventional wisdom.
- These mobile interactions can be segmented into seven distinct “mobile motivations” that encompass most mobile use. These include:
- Accomplish - managing activities and lifestyle to gain a sense of accomplishment
- Socialize - active interaction with other people
- Prepare - active planning in order to be prepared for upcoming activities
- Me Time - seeking relaxation and entertainment in order to indulge oneself or pass the time
- Discover - seeking news and information
- Shop - focusing on finding a product or service
- Express Myself -participating in passions and interests
- Me Time is by far the biggest “Mobile Motivation.” Me Time accounts for almost half (46%) of all smartphone app and website motivation, averaging 864 minutes per month per user, per Arbitron Mobile. Seventy percent of these moments are lean-back experiences.
- Mobile advertising performs poorly in Me Time on key ad effectiveness metrics. This is because the vast majority of messages are not relevant to the use at that time, are easy to ignore, or get in the way.
The overarching learning here is that ‘mobile’ phones aren’t primarily about mobility, at least in the meaning of wandering the face of the earth. They proximal phones: the ones closest to us. And I mean closest in all its senses. They are out personal, constant, and close-to-hand companions.
And, by extension, a great deal of the discourse about mobility phones is simply not as relevant as generally considered. BBDO suggests it’s more important to think about the motivations behind phone uses, and the kind of user time that is involved. Simon Bond, BBDO’s chief marketing officer, was quoted in the study:
In the end, it’s all about helping agencies and creatives create the most compelling content. And based on our findings, that compelling content should be me-based, home-based, entertainment-based, not solely geo-location based.
Microsoft completely missed the rise of social networks, but amazingly so did AOL, who had AIM as a great starting point.
I wrote about possibly building something cool on top of AIM based on the Buddygopher experiment, way back in 2006, and I was contacted by people reporting to Jim Bankoff, a VP at AOL. We set up a project to build what would have been a very cool app: project name Nerdvana. My partner, Greg Narain, and I were pushing at content curation through a stream-based, open follower architecture leveraging the 400M+ AIM accounts then in use.
Alas, Jim Bankoff, now CEO of SB Nation, left AOL after Randy Falco joined AOL. The project petered out without serious sponsorship, the budget pulled away to other AIM related projects. We never even got to build the prototype.
But Microsoft and Yahoo also failed to try to make the transition from disconnected buddylists to a unified social network. Likewise my client Jabber, who opted to not build a social network solution on top of its distributed protocol, and is now a part of Cisco.
You can say that these ideas were too early, but these are companies that had all the motivation in the world to experiment ahead of the wavefront.
Perhaps this failure to attempt to design speculatively is another proof of Ven Rao’s Manufactured Normalcy Field: the sense that the present will last a good while into the future, instead of the continuous creative destruction mindset, where the present is being relentlessly consumed by the future, which is only a few weeks, days, or minutes from now. But the bigger the company, the more likely they are to act as if the present is eternal, and the future is retreating as fast as they amble forward.
That’s why Microsoft has fallen so far, to the point where Apple’s revenues from the iPhone alone are more than Microsoft’s entire top line. That’s why AOL has fallen like a meteorite, vaporizing on a death trajectory toward the center of the Earth. That’s why Yahoo has lost its mojo. They stopped speculating, and tried to treat the future as the back porch of the present.
For two months last fall, Eric Simons secretly took up residence inside the Internet giant’s Palo Alto, Calif., campus, eating free food, enjoying gym access, and building a startup in the process.
Two things today made me assess the small progress made in hyperlocal journalism to date, and to reconsider the direction we might be headed in.
First, I saw a tweet go by pointing to a WSJ story:
Keach Hagey, For AOL, a Costly Gamble On Local News Draws Trouble
Mr. Armstrong, has held his ground in defending Patch, which he co-founded in 2007 before he joined AOL, but he recently promised to make it profitable by next year. In a small step toward that goal, Patch said Tuesday it will cut around 20 jobs, or less than 2% of its workforce. The cuts will come from merging the management of its eastern and southern regional reporting operations.
Whether Mr. Armstrong can make Patch a success could determine his fate at AOL. As the ad-supported network has expanded to more than 850 towns from 30 in the past two years, its annual loss has widened sharply to more than $100 million in 2011, analysts say.
The main problem: It is tough to sell enough online ads to cover the cost of producing local news, especially while maintaining a local reporting staff and a local advertising sales force.
"I don’t think anybody’s figured out local yet," said Rick Blair, an angel investor in several companies that run local websites.
AOL is losing $100M on Patch this year, and Ariana Huffington tried to integrate Patch into the very successful Huffington Post but then lost interest after Patch management chafed at her attempts.
My bet is that Patch will end Armstrong’s career at AOL, and Ariana will take over as CEO. She’ll either scrap Patch or integrate it totally into HuffPo. But to make it a ‘success’ Patch will have to become something very different from what Armstrong envisions.
Note that the Patch model is closed: there is no Patch for Beacon NY, where I live, and there is no provision for me or anyone else to start one. It’s all centrally managed, which just runs counter to hyperlocalism, in my view.
The second reason I am thinking about hyperlocal is that the Guardian — a group that really gets the web in a way that Armstrong seems not to — announced n0tice.org, their ‘open journalism toolkit’, which is a platform for crowdsourcing journalism capable of being used by publishers, brands, communities and developers.
I started fooling around with the tool, and immediately decided to wait for the iPhone app. I created a community ‘n0ticeboard’ for Beacon NY, where I now reside, in about three minutes. Check it out at beacon.n0tice.com.
The UX of n0tice.org is a lot like Tumblr: you login as an individual, and you can create and participate in various n0ticeboards, posting events, reports, or good to sell, swap or share. You can follow other users or n0ticeboards. And you can post to any n0ticeboards, so it is very open (which will lead to a moderation overhead, I am sure).
The Guardian plans to share revenues with those contributing, but has no firm date for that generation of the platform.
At any rate, two very contrasting approaches: Armstrong’s Patch which feels very 2005ish and limited to specific communities, and the Guardian’s n0tice which is based loosely on the basic model of Tumblr — much more contemporary — and based on ‘open journalism’ crowdsourcing. I just wish the n0tice iPhone app was available.
The Guardian project gives me hope that the dream of hyperlocal can really come true, through a very open model of participation.
Brian Stelter reports on a consolidation of control under Ariana Huffington of parts of the Huffpo machinery that had been consolidated into AOL, like marketing, technology, and business development groups.
This fits with my bet: Ariana Huffington will be running AOL before long, despite the new contract that AOL CEO Tim Armstrong has signed. My bet is that Patch and others of Armstrong’s projects will fail dramatically, and he will have to resign.
In the short term, this may look like Ariana is simply gaining direct control of the tools she needs to make HuffPo work, but to me it looks like she’s laying the groundwork for the new organization, so when Armstrong’s day of reckoning comes she’ll have all the pieces in place for a new executive team to run AOL.
I guess it’s not unexpected, since rumors have been flying around about more cuts at AOL:
AOL Slashes Staff at AIM Unit; Wider Cuts Expected - Nick Bilton via NYTimes.com
The AOL Instant Messenger group took the deepest cut so far. A former AOL employee said the group was “eviscerated and now only consists of support staff.” This person, who asked not to be named because they were not allowed to speak publicly about the company, added that “nearly all of the West Coast tech team has been killed.”
In a statement given to The New York Times, AOL confirmed last week’s layoffs. A company spokeswoman declined to say how many employees had been cut.
“We are making some strategic but very difficult changes to better align our resources with key areas of growth for us as a company,” the statement said. “We remain committed to our presence in Silicon Valley and driving innovation in consumer products and mobile.”
Jason Shellen, vice president of the AOL messenger products who was based in the company’s West Coast offices and who once ran Thing Labs, is among those leaving. Mr. Shellen declined to comment, but AOL confirmed his departure.
I think AOL blew a great chance.
Starting in late 2006, Greg Narain and I worked on a project with AOL, called Nerdvana, where we envisioned using the buddylist model of AIM as the basis for a brand new way to share media. The images above were taken from a design we produced in early 2007. Relatively quickly after that date we were bogged down in endless committees all fighting for their funding, following the arrival of Randy Falco, and the departure of smart people like Jim Bankoff, now the CEO of SB Nation, who hired us in the first place.
Bankoff and other at AOL had their curiousity piqued by a piece I wrote in April 2005, called Nerdvana, that sketched out a new synthesis of instant messaging, social networking, and social media sharing. And it included an open follower analog, which was implemented in Twitter in 2006.
A year later, I was approached by an AIM manager, Alan Keister, and we launched an effort to prototype the Nerdvana concept. However, once Bankoff was gone, the project slowly ground to a halt, and was shut down because our design was ‘too complicated’ for the folks still there to grasp. Or maybe we were trying to do too much.
Still, a shame: because AIM had hundreds of millions of users at the time, sending billions of messages every day. Nerdvana might have been a breakout for AOL, instead of dying the death of a thousand cuts.
And with AOL’s CFO, Artie Minson, now running M.A.M.A — mobile, AIM, Mail, and About.me — I have to presume they are positioning themselves to sell it off, or spin it out.
Goldman: AOL is a brand with a lot of baggage. It makes people remember that dial-up-modem sound and those free CDs.
Armstrong: One of AOL’s biggest assets is its brand. For people over 30 and, due to AOL Instant Messenger, even a lot of people under 30, AOL was their first real interaction with technology in a positive way.
Goldman: You’ve decided to turn it into a content company. But a year after spending $340 million to acquire the blog TechCrunch and The Huffington Post, traffic has barely budged.
Armstrong: Traffic actually is going way up on the properties where we’re investing for the future and pushing content. Huffington Post is up 46 percent. Numbers have been going down on some of the historical stuff: AIM went down, MapQuest went down and dial-up subscribers go down every year. So flat is up for us.
How can you counter that? Flat is the new up, Tim?
The brutal reality is that people’s aggregated media experience is rapidly shifting, and the rate of drift appears to be increasing. For example, TV sports grew 21% between ‘07 to ‘11, 15% more than TV as a whole. ‘Going to the movies’ is starting to look like a future vaudeville, with ‘11 US tickets falling to 1.29B, from the ‘02 peak of 1.5B.
People are spending their time looking at other things than AOL’s Patch. Oh, and Techcrunch US numbers have dropped like a rock, too, down ~40% in the past year. Huffington Post is booming, so I guess Goldman’s gibe — citing Paul Carr’s belief that Ariana HuffPo will be running AOL soon — might actually have merit.
AOL hires Rachel Fishman Feddersen as Chief Content Officer for failing Patch, whihc was acquires for $150M, and which is estimated to have lost $150M more:
Peter Lauria via Reuters
AOL Inc, which has been investing heavily in content to make up for declining revenue from dial-up Internet access, has hired an executive for the newly created position of chief content officer at its struggling Patch hyperlocal news network.
The company will announce on Wednesday that Rachel Fishman Feddersen will be joining Patch in the new role reporting to Jon Brod, head of AOL Local, effective February 14.
Whatever the outcome of this hire, Patch is the wrong model for hyperlocal, which isn’t going to be a bunch of zipcode-based journalism. Hyperlocal will have to be much more than an attempt to replace the now- or soon-to-be defunct local papers or TV news shows. It will have to be much more about creating a place for public discourse than reporting on public discourse.
Update: 9 August 2013 — Fedderson and Patch CEO Steve Kalin are officially out at Patch, according to Nicholas Carlson.