In another sign that hyperlocal online news fails to make money, Sports Business Journal reported this week that ESPN is shutting down its high school coverage. Walt Disney’s sports network will soon be shedding ESPNHS.com, two high school magazines, and 75 jobs.
Last month Starboard Value, an investment adviser that owns 5.3 percent of AOL, made the case that the Web hub’s local venture, Patch, is not a viable business. According to Starboard, Patch lost $147 million last year. As Bloomberg Businessweek’s Felix Gillette reported, local merchants tend to prefer Google’s search-based text ads to the more expensive display ads that drive most online media, because “[b]anner advertisements are good at gradually building an emotional connection between a consumer and a business—which is not too important if the business is a bed-bug exterminator.”
Or, as ESPN told Sports Business Journal, “the business proved to be too locally focused and not broad enough.” The broadcaster might also be surprised to learn that a minicupcake just won’t do when you’re hungry for a piece of cake and compact cars are too small for big families.