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Amid Postmortems, AOL Says Patch Is Still Alive


You know a tech business is in trouble when it begins declaring that reports of its death are greatly exaggerated. Earlier this month, it was BlackBerry (BBRY) that had to remind the world publicly that the company is still, ahem, very much alive. This morning, it was AOL’s (AOL) turn to announce to anyone who would listen that its hyperlocal news network Patch is still not yet dead.

Patch’s sudden need to broadcast its own pulse comes on the heels of a new article by New York Times media columnist David Carr, analyzing Patch’s “winding down.” Carr describes the network of local news blogs as a “black hole for cash,” one that will largely define Tim Armstrong’s legacy as chief executive officer of AOL.

“Mr. Armstrong had a sentimental, and some would say debilitating, attachment to Patch. He helped create it in 2007 while a senior executive at Google. When he got the top job at AOL in 2009, he persuaded the company to buy it. Patch then proceeded to churn through leadership, business models and write-downs on the way to its reduced state.”

After the column was published online Sunday night, AOL scrambled to remind other news sites that “winding down” does not technically mean buried in the ground and gone forever. At a certain level, that’s true. But whether Armstrong likes it or not, much of the world is now less interested in reading about Patch’s current state of existence than in analyzing its historic rise and fall as a case study in the business challenges facing local news.

Sure enough, media pundit Jeff Jarvis on Monday morning performed his own Patch autopsy. Jarvis suggested that although he once met with Armstrong as a Patch consultant, it was Armstrong’s failure to execute—and not Jarvis’s perhaps overly rosy analysis of the industry—that ultimately led Patch astray.

Nevertheless, Jarvis hasn’t lost his faith. The new media evangelist says the ultimate culprit behind Patch’s demise is (spoiler alert) the old media—or at least its insidious and ruinous mindset.

“After the fall of Patch, some will say again that hyperlocal has failed but they’d be wrong,” writes Jarvis. “Hyperlocal works in town after town. What doesn’t work is trying to instantly scale it by trying to own every town in sight. That was Patch’s fatal error: acting like an old-media company.”

Gillette_190
Gillette is a staff writer for Bloomberg Businessweek in New York.

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