A shorter version of this piece appears in the September 2009 issue of Fast Company.
New Jersey Transit trains from Manhattan to Maplewood take 37 minutes—long enough to fall asleep, but too short to feel rested. The train pulls into Maplewood Station across from an 82-year-old movie theater at the peak of a quaint shopping area known as The Village. Outside the station, the Maplewood Civic Association maintains a bulletin board overstuffed with news of jazz festivals and yoga classes. Nestled between flyers hawking a fish tank and a drum set, is an unassuming piece of paper titled, "Introducing The Local." Despite the invitation's neighborly tone—"And in the spirit of community, do bring a can of food. . ."—word of the outsider experiment in providing local news has raised some controversy. While many Maplewoodians view The Local as a useful community project, others, particularly among those who post on virtual message boards, see it as something of a hostile takeover bid. To some on the outside, the flyer represents a shot across the bow in a coming—much larger—battle between media companies competing over the future of local news.
Two of those outlets have targeted Maplewood. The New York Times assigned Tina Kelley, a local resident, to start up The Local with a mandate to cover Maplewood and the neighboring towns of South Orange and Millburn. A month earlier, Patch, a new online venture with a tenuous connection to Google, set up shop in the same three consecutive stops on the M&E Gladstone Branch of New Jersey transit. (Representatives of the Times say they were initially unaware of Patch's plans, and decided not to change course when they found out; The Local also has a presence in the Brooklyn neighborhoods of Clinton Hill and Fort Greene.) Both sites engage with the community and cover everything from high school basketball to drug arrests. Kelley, a ten-year Times veteran, works all three towns; Adam Bulger, a self-described "mid-level reporter," has only Maplewood to cover as Patch assigned South Orange and Millburn their own editors.
The Local and Patch have similar objectives, yet subtle differences in execution. The Times' imprint extends beyond The Local's familiar typeface and powerhouse web-host. Its stories have more of a professional—even Timesian—feel, as Kelley tends to report news the way a Times metro desk alumna would, often with supporting quotes and an inverted pyramid structure. Patch, a start-up without a centuries-old news culture, has more the style of a community newsletter. With useful directories, mapped stories and frequent Twitter updates, it is "more informative than investigative," as one web editor describes the task of online local news.
The paid staffs are small in both cases, but not compared to the intended coverage area. While in the past, the Times might have assigned a handful of reporters from the Newark bureau to cover the entire state, The Local has one seasoned professional, Kelley, exclusively devoted to these three western Essex County towns and their 60,000 residents. She also has paid technical and editorial support plus a growing complement of student and volunteer bloggers. Patch hires freelancers in addition to the full-time reporter devoted to each town.
Both of these experiments fall under the heading of "hyperlocal" news, a fast-growing, all-online phenomenon that features a disproportionate scale of newsgathering effort to the area being covered—that is, compared to how these areas have been reported in the past. Across the United States and elsewhere, hyperlocal coverage has come to include anything from the block to the county: a single person with a webcam and a blog who reports every fender-bender near his block in Charlotte, North Carolina; a volunteer news operation run by a seasoned reporter in Westport, Connecticut; and the out-sized resources the Washington Post devotes to covering the 270,000 residents of Loudon County, Virginia.
Internet prognosticators and forward-looking media players think hyperlocal is an idea whose time has come. The journalist-cum-web guru Jeff Jarvis is a particularly fierce advocate and participant, as he sits on advisory boards for both Patch and The Local. Other "future of newspapers" bloggers and columnists frequently include hyperlocal trends among their predictions. Meanwhile, venture capital firms and mammoth media organizations alike have thrown their capital behind hyperlocal projects.
The reasoning goes like this: While it would be futile for local communities to try to compete with, say, the AP or CNN for national and global stories, they can cover themselves better than anyone else. What's more, the very people who are consuming the news are the friends and neighbors of those who are producing it and are featured in it, virtually assuring a built-in audience.
Jay Rosen, an NYU journalism professor and media blogger, believes there is a need for hyperlocal news that is not currently being filled. "There is real demand for good information about our neighborhoods, our children's schools, our streets, our block, but big metro news organizations have no intention of, and no ability to, provide local news at that level," he says. "They cannot get local enough to meet demand. It would take the kind of reporting staff they no longer have."
This wasn't always the case. For many years, most newspapers only existed to serve their own local communities. According to Thomas C. Leonard, author of The Power of the Press: The Birth of American Political Reporting, in 1910, there were 2,600 daily newspapers in the United States, the vast majority of them independently owned and operated. They would run local coverage along with wire service stories from the AP and UPI—not unlike the Jarvis motto, "Cover what you do best. Link to the rest."
In 2007, the Newspaper Association of America counted only 1,422 individual papers in the entire country—a number which has surely dropped even further since. With all the fanfare surrounding recently departed dailies like the Seattle Post-Intelligencer and Rocky Mountain News, it's easy to forget that the number of newspapers in the United States has trended downwards for most of the 20th century. As papers consolidated locally and conglomerated nationally, the intimate connection between many newspapers and their communities was severed.
A bulletin board near the Maplewood train station. The flyer for the Local is on the upper right-hand side.
In addition to a pent-up demand for relevant local news, there is another aspect of hyperlocalism that is making investors salivate. The sites can deliver targeted advertising capabilities to local and global businesses. As the once-exponential growth rate for most Internet advertising in the United States slows to a crawl, the largely untapped online local advertising market is projected grow 5.4 percent in 2009, according to the media research firm Borrell Associates.
Between the unfulfilled demand for local news and the limitless advertising potential, hyperlocal seems like a can't-miss proposition. Yet, the arrival of this seemingly sound model remains perpetually around the corner, constantly predicted yet never fulfilled. Different people have named hyperlocal the journalism trend to watch every year since 2004. And yet, no one has quite figured out how to make it pay.
Maplewood is the latest testing ground for hyperlocal's viability. Kelley and Bulger are just settling into their new posts, still receiving training on new web-journalism tasks like uploading photos and Twittering. "People are getting involved with the site," says Bulger, "While it's still too early to judge, we're seeing good things." Kelley shares Bulger's early enthusiasm. "We've just started out, but people in the community are excited to communicate with us," she says. Kelley has made an effort to ingratiate herself and The Local with her neighbors, particularly the internet-savvy among them. Just after the site went live, Kelley invited community members to a "Meet the Blog Party"—the flyer on the message board—where she introduced herself and The Local. On the website itself, she immediately linked to existing local blogs, to Patch, and to the websites of the area's local papers. She even posted about The Local on Maplewood Online, known locally as MOL, the site that hosts the area's extremely active message board.
Kelley has found most of the people she has reached out to receptive, though, in typical Internet fashion, critics of the new sites don't hold back. Under a message thread titled "Now the NY Times Invades MOL's Turf," one frequent MOL commenter noted, "Apparently we are the most interesting people in the tri-state area." Another soon corrected her, "More like the most interesting people in the nation."
Around the same time, a mischievous MOL commenter posted a hoax story using the names of characters from the movie Ghostbusters to goad Patch into re-posting it as news. A reader alerted Bulger to the story about a violent gang led by Gozer the Keymaster and his sidekick Zool, and the editor responded on Patch's website. "Like a lot of American males in their 30s, I have seen [Ghostbusters] dozens of times, and have committed huge chunks of it to memory," Bulger wrote in good, if mildly annoyed, humor.
Despite their frivolity, the negative reactions to Patch and The Local are borne of real concerns. "They're worried," says Kelley. "They're worried about the big media companies coming in and taking up [their local sites'] advertising dollars." The Maplewood blogosphere is a crowded place. In addition to Maplewood Online, there are many smaller blogs, including Joe Strupp's Maplewoodian, started by the writer for trade magazine Editor & Publisher, to bolster gaps he saw in local news coverage. And it's also true that there is only so much local advertising to go around. With their streamlined costs and large wallets, the new kids on Maplewood's online block may be able to price out their predecessors. According to Bloomberg, Maplewood Online charges $299 a year for banner ads and $149 for business-directory listings. Patch's variable pricing structure currently has a rate of $15 for every one thousand impressions.
It may seem strange that a New Jersey suburb should be the center of all these sites' attentions, but there were reasons for selecting Maplewood. "There was a set of criteria," says Bulger. "There was a computer model that arranged all the traits we were looking for in a town." Patch was seeking a place that had a central business community instead of a series of strip malls; a sense of civic engagement among residents, gauged by the level of interaction with the high schools and other public institutions; and deep broadband Internet penetration, which is tied to the affluence of the population. While Kelley maintains that The Local had different methods for choosing towns, she did mention all three factors cited by Bulger as reasons why the community is suited to the project. But, according to Kelley, the key reason behind the Times' decision to place a blogger in Maplewood had nothing to do with Patch's motives at all. "The Times wanted me to launch this experiment in New Jersey," writes Kelley in The Local's introductory post, "and I live in Maplewood."
Maplewood has a thriving media community. Letters to the editor in the pages of major New York City papers are often signed from Maplewood, and the staff pages of newspapers and magazines around the tri-state area are filled with the names of Maplewoodians. Kelley calls it "a reporters' enclave." There is a Maplewood/South Orange society called "Professionals in Media," founded by Jacqueline Herships in 2004 to cater to the abnormally high number of mediafolk in the towns. The group recently held its bi-annual pot luck event and panel discussion, which according to Herships, was attended by "movers and shakers from Google and the New York Times as well as representatives from nearly all of our local media."
While the town's active, wealthy populace, concentrated commercial sector, and abundance of media players may explain what made Maplewood ideal for these projects, they don't answer the glaring question of why media companies—already stretched so thin—would want to experiment with hyperlocal news coverage as a business objective at all. For years, local news has been at the bottom of the journalism food chain. Big news operations routinely appropriate the most compelling stories reported by smaller local outlets and re-deliver them to larger audiences. Why would they want to undertake the tedious—and expensive—process of blanket local news gathering themselves?
The answer may lie in Patch's Google pedigree. Patch was started and funded by Tim Armstrong and his private investment company Polar Capital Group. Armstrong's involvement—along with that of a few engineers who have experience at the search giant—is the source of the oft-mentioned Google connection to Patch. While Armstrong has since moved on to become CEO of AOL, at the time of his investment in Patch, he held the key advertising post at Google. He was listed fourth on the company's Operating Committee—behind Eric Schmidt, Larry Page, and Sergey Brin.
There is no direct connection between Patch and Google, but their DNA match is unmistakable. The Google model, described by author John Battelle as "a billion dollars, one nickel at a time," is about creating tiny sources of revenue that add up to a much greater whole. Patch, which according to its site would like to be in every city in America, started out in a select few areas that are prime for local Internet advertising. Having already selected its next New Jersey sites—Summit, Westfield and Scotch Plains—it is clear that Patch is looking to replicate the Essex County project.
The Local is also looking to expand. "This is a pilot project right now," Kelley says. "Whatever we learn from it is fabulous. If we can take take it more broadly; that's the goal." If these sites are successful, both editors suggested, one can imagine the thousands of journalism jobs opening up across the country to fill the sites with news. A professionally trained blogger in every town, city, and suburb, is a dream to make any journalism student rescind his law school application.
Unfortunately, that rosy picture doesn't seem to mesh with reality. Jim Schachter, one of the Times executives behind The Local, explained to Harvard's Nieman Journalism Lab the infeasibility of running The Local as an ad-supported venture in other towns. "If every single person who lives in Fort Greene, Clinton Hill, Maplewood, Millburn, and South Orange came to these sites every day and made one impression, that would be about 120,000 impressions a day," he said. "It is barely enough to create a ripple in a pond and not enough to be profitable."
Ad revenue is unlikely ever to match costs. "All told, we're talking about several hundred thousand dollars a year in personnel costs," Schachter writes in an e-mail. "I don't think the local digital advertising market anywhere—not Maplewood, not Fort Greene, not Dubai—would cover those costs."
Obviously, the Times didn't start The Local with the intention of losing money. With cutbacks at the Times ranging from closing Play magazine to the standalone Metro section, the paper and the New York Times Co. are in an extremely budget-conscious mode. The Local is an experimental program, underwritten by the newsroom, to see if hyperlocal could eventually bring in some money for the cash-starved Times. It has a three-pronged business model, of which targeted local advertising is only one part. The second part, similar to the first in its limited profitability, is selling national advertising to a locally engaged audience.
But it is the third aspect of The Local's strategy that is most interesting, and the biggest stretch for the Times as a newspaper. If The Local's test run proves to be successful, the Times would look to license The Local's platform to bloggers in other towns as a prepackaged hyperlocal toolkit.
"Our hypothesis," Schachter explains, "is that there is a swath of people—experts of various sorts, journalists, self-trained placebloggers—who would want our assistance in professionalizing their work and who would love to be associated with the Times. If we build the right thing, we could help those people mobilize their communities to cover themselves and gather local advertising dollars in extremely low-cost ways. That could work, economically, for these local journalism entrepreneurs and, at scale, it might work for us."
The goal at this stage is to learn how hyperlocal could work. Schachter lists five key questions that the Times is hoping The Local will answer:
- How do you engage the residents of a place to report on themselves in a way that reflects the essential values of journalism?
- What is the mix of news, information, and comment that makes a site emerge as a community's essential digital gathering spot?
- Can we assemble a combination of journalism, tools, and ad-sales mechanisms good enough to prompt placebloggers and other kinds of hyperlocal publishers to adopt our solutions?
- How do we supervise the journalism practiced on such a platform, if at all?
- And is there a viable business model to justify a role for the Times in such a hyperlocal ecosystem?
A New York Times-branded blogging platform could come with built-in deals with national advertisers that would offer a real incentive to local journalists, and would continue to generate revenue for the Times. But there are issues that come with being a blogging software company. Right now, every word that appears on The Local has a Times editor to review it; it comes with the Times' prestigious imprimatur. Would the newspaper oversee franchised content delivered under its name in the same way? (Says Schachter, "It's safe to say that we would exercise whatever level of oversight was required to protect the standing of our news brand.") Would that even be feasible? ("You are ahead of where we are.") More pressing, who exactly will be doing the reporting? Is the Times trying to enlist a citizen journalist army?
Gordon Joseloff is a veteran newsman who spent decades reporting from around the world for UPI and CBS News. He wrote for Walter Cronkite and Dan Rather. In 2003, Joseloff started WestportNow, a community news site for the town of Westport, Connecticut, that has grown into the primary source of local news for many residents. "Our site beats the pants off the local papers," Joseloff says. "We have more boots on the ground. Unlike newspapers, we can publish news in real time."
WestportNow's success was built on the efforts of motivated retirees and Jennifer Connic, an editor who was paid "slave wages," and now writes for Patch in Millburn. Despite the the abundance of volunteer contributions, Joseloff, winner of a 1984 News Emmy, does not tolerate sloppy standards. "We edit everything," he says. "We adhere to the AP Stylebook. We source information. This gives our site the subtle significance of professionalism."
The site is a glowing example of the potential of community journalism. Frequently updated throughout the day, WestportNow offers residents up-to-the minute local news, professional-grade photos, and a useful daily calendar of city events. The New York Times, which has cited Joseloff and WestportNow in multiple features, once described the site as "the gold standard in Connecticut for blogs that focus on news and information"—an understatement akin to calling Tiger Woods "the gold standard for Black-Chinese-Thai-Indian golfers." Placeblogger, a site for browsing blogs by location, ranked WestportNow among the best hyperlocal sites in the country.
Undoubtedly, one of the reasons for WestportNow's continued success is Westport's affluence. The site thrives on the contributions of individuals who have the luxury of time and money to spend on a communal pet project. In a place where one local headline reads, "Report: Westport Customers Had $60 Million with Madoff," one can safely assume that blogging is not a primary source of income for too many people.
Joseloff's involvement with the community goes well beyond WestportNow. In 2005, he was elected Westport's First Selectman, a New England title equivalent to mayor, and gave up his post as WestportNow's editor. Though he is now less involved in the site's day-to-day operations, he continues to support it financially. For all of its popularity, WestportNow actually loses money. Joseloff runs the site out of his own pocket as a service to the community. "I'm not dependent on the revenue it generates," he says, "so I'm willing to take the loss. Hopefully, one of these days it will turn a profit."
There are advertisements for local businesses on the site, as well as associate links to popular Amazon products, which offer a referral fee to the host website upon purchase. But the amount of money they bring in is not enough to cover the cost of hosting the site and gathering the news—even with an enthusiastic crop of volunteer reporters.
Many other quality hyperlocal sites have encountered the same issue. The all-too-typical situation is a site with frequent updates, an engaged audience, and a negative stream of profits.
In the Pearl District of Portland, Oregon, Neighborhood Notes began as a small hyperlocal website. As its popularity grew, eager contributors from the surrounding areas began adding their own stories. Soon enough, Neighborhood Notes became a citywide operation, with individual subpages for different regions and neighborhoods. "People have a sense of pride in talking about where they live," says site editor, Lynnette Fusilier. "They want to cover their neighborhoods and share that with people across the city." Despite the enthusiasm and rapid expansion, Neighborhood Notes is yet to become profitable. "Our business is advertising-based, but we're not yet self-sufficient," Fusilier says.
In Phoenix, East Valley Living started out as the community resource listing for an Arizona marketing company in 2002. Now, as a hyperlocal news site, it has so many contributors, it turns some hopefuls away. Still, the small amount of money that comes in from online advertising does not cover costs, and the site runs at a consistent loss for the marketing company that supports it.
The advantage of volunteer reporters alleviates some of the financial burdens of being a news source, but reporting is by no means the only cost. There are upkeep expenditures for bandwidth, technical support, and editorial oversight. These costs and others continue to outweigh the revenue the sites generate. Hyperlocal is like a Goodwill Store with donated goods for sale that still can't quite cover its rent.
Joseloff has thought a lot about the challenges that face these sites. It's frustrating to him that such an important news model, one that interacts directly with the community, is hard, if not impossible to sustain on a broad scale. "Everybody's groping for a business model," he says.
One of the most compelling ideas to emerge belongs to Paul Bass of the nearby New Haven Independent. Part of the not-for-profit Online Journalism Project (not to be confused with the expressly for-profit Journalism Online), the Independent does not even bother with the paltry returns from online advertising. Instead, it relies on grant money from institutions and charitable individuals.
"Since we started in 2005, there have been hundreds of news sites started across the country," Bass says. "The only ones paying full-time professional staff are not-for-profit. This model is just more financially viable." However, it could be difficult for the Independent model to take off on a large scale—unless Bass can find a way to run the site on voluntary contributions from readers. "Very little of our funding comes from reader donations," he says, "because we haven't yet done an NPR-style drive." In the meantime, he isn't worried about the limited number of foundations willing to support such a venture. "There's also a limited pool of advertisers," Bass says. "Everyone needs to find the model that works for their community."
Not-for-profit has been the model of choice for other successful ventures as well, notably MinnPost (Minneapolis), the St. Louis Beacon, and ProPublica, an independent investigative newsroom based in New York. In the absence of advertising returns, these sites have attracted support from several forward-thinking media foundations such as the OJP, the Knight Foundation, and the Sandler Foundation, as well as individual donations.
Another unconventional method for squeezing some cash out of the hyperlocal space comes from Debbie Galant of Baristanet, whom Jarvis has dubbed the "Queen of Hyperlocal." One of the first bloggers on the hyperlocal scene, Galant and her business partner, Liz George, have created a vibrant community site in Montclair, New Jersey—only eight miles down the Garden State Parkway away from Maplewood. Baristanet has thousands of active readers and commenters, and perhaps most impressively, actually makes money. "We generate six figures in revenue every year," says Galant, a former columnist for the New Jersey section of the New York Times. Some of the site's success is circumstantial. "We lucked into a great location with a solid economic base," she says. "But we also have a welcoming design and a personality, so that people actually look at our site and say, 'There is something there I want to be a part of.'" The voice of Baristanet is that of a friendly neighbor, sharing news about lost puppies, train service, and local projects—all with a playful sense of humor. In the funniest hyperlocal joke to date, Baristanet's April Fool's Day post announced that the New York Times and Patch would both be opening new projects on the corner of Walnut Parkway and Walnut Crescent, a small cul-de-sac in Montclair. (It's not such a stretch—the site 10SBoulevard is devoted to covering a single boulevard and its neighboring blocks in Charlotte, North Carolina.)
Personality is not Baristanet's only advantage. Galant and George have an internal motto for building the site, "Work Smart." They've used business and marketing savvy to make the site successful, divvying up responsibilities among their staff. When Galant speaks of herself and other successful bloggers, she doesn't refer to them as journalists, or even as writers, but instead calls them "entrepreneurs." And so, like any good entrepreneur, Galant is looking to expand on her success. Barista is now marketing its expertise in creating profitable community sites. The two women will help build a site, offer tips on maintaining its personality, and most importantly, assist in securing advertising. But they'll do it for a fee—Baristanet and Jarvis, a partner in this new venture, receive a chunk of the new site's revenue and a stake in its equity.
While there are many exciting ventures like Baristanet, the hyperlocal Internet graveyard is vast and bleak. Sites that once seemed to offer the promise of the future either underwhelmed in practice; never took off at all; or still exist in zombie-like form online. Many big companies have taken on the hyperlocal model and have come away with little to show for it.
One of the highest-profile hyperlocal initiatives was launched in July of 2007. The Washington Post's LoudonExtra serves Loudon County, Virginia, an exurb of Washington D.C. As one of the earliest stabs at hyperlocal by a major media player, its development was intently monitored. The Post brought in a star team of Internet journalism experts, including Rob Curley, a man Fast Company once profiled with the title "Hyper-Local Hero." Originally from Kansas, Curley gained prominence as he made local news shine with video, blogs, and other online accompaniments, first at a few Kansas newspapers, and then at the Naples Daily News in Florida. The Post hired Curley's team to turn LoudonExtra into a buzzing hub of community involvement for the county. It didn't succeed. The site failed to engage local residents, and its traffic was even lower than some of Curley's Kansas sites serving communities with populations a fraction of the size. Curley's team left the Post and moved on to a project in Las Vegas, and the Wall Street Journal declared the venture "Big Daily's 'Hyperlocal' Flop."
The town of Maplewood is a testing ground for the elusive hyperlocal news model.
In November 2008, the entire program was scrapped. The plan was viewed as a threat to the online efforts of local media, especially after a study conducted by the regulatory agency Ofcom found that BBC Local could cut into the shrinking revenue of those local outlets. Just as in Maplewood, there was controversy about stepping on the toes of established news sources. However, for a company that is not quasi-nationalized like the BBC, a competitor's diminishing market share is not usually a cause for concern.
The Local isn't the first instance in which the New York Times Company has had an issue with entrenched players in a local media market. In December, GateHouse Media, a publisher of community newspapers across the country, sued the Times Company. Gatehouse charged that the new hyperlocal websites associated with the Boston Globe's Boston.com—which the Times Co. owns—were violating copyright and benefiting unfairly from the work put into GateHouse's Boston-area websites. Apparently, GateHouse didn't approve of The Globe sites' practice of linking liberally to its stories. Though the companies have since settled out of court, it is noteworthy that a local-level media outlet could be so concerned about protecting its turf that it would sue to prevent a popular website from linking to it.
While there are many, many more bumps on the hyperlocal road to profitability, there is one particular hyperlocal failure that naysayers are always quick to point out. Backfence launched in 2005, after its co-founder Mark Potts introduced it on Jay Rosen's PressThink blog as "a local, grassroots approach to helping community members share the news and information (and advertising) that they believe is most important to them." An early pioneer in the hyperlocal space, Backfence excited media speculators and venture capitalists alike, raising $3 million in seed funding and a whole lot of expectations. Over the next few years, the site grew to focus on 13 neighborhoods around suburban Washington D.C., northwest Chicago, and the San Francisco Bay area. It relied on the contributions of unpaid citizen journalists, aggregating the results together and listing them according to neighborhood.
But the site didn't resonate with users in the communities it covered. A year after it was announced, the number of registered users continued to underwhelm, and the site's content left readers wanting. Reviewing the site in its first year, Baristanet's Liz George described it as a ghost town. "There's no local flavor," she wrote on PressThink, "no imprint of personality, nothing to give these pre-planned communities a sense of place." As the site expanded, it did little to change its cold, even barren, atmosphere.
When Backfence closed in 2007, some took it as a sign of the overinflated hopes for hyperlocal. "Backfence Closes, Citizen Journalism a Failure," the social media blog Mashable presumptuously declared. But Potts defended the idea behind Backfence, saying that internal problems and a lack of community outreach did in an otherwise viable idea. "Someday soon, somebody will make [hyperlocal] work and turn it into a successful business," he wrote on his blog. "If there's anything I've learned from Backfence, it's that the power and potential of local communities still is waiting to be tapped."
Even on a rainy day, the cubicle-less office of the young startup Outside.In is bright and airy. It sits on the 10th floor of a building in the increasingly hip DUMBO neighborhood of Brooklyn, tucked between the storefront of a custom t-shirt manufacturer and the East River. When CEO Mark Josephson calls for the weekly morning meeting to begin, the team of developers, product managers, and assorted personnel make their way to the cozy couches in the center of the room like kindergartners assembling for story-time. Someone turns down Rilo Kiley on the office stereo. A female employee removes her hat, which is shaped like a giant wolf's head. A black French Bulldog scampers across the floor and onto a developer's lap.
"Tell them about the Sac Bee," Josephson says to an employee when the room settles down.
Outside.In, an aggregator of news content on a hyperlocal level, has just forged a deal with the Sacramento Bee, flagship newspaper of the McClatchy Company, for the paper to feature Outside.In story maps on its website. Story maps are interactive Google Maps-based widgets, which feature news from papers and blogs alike displayed graphically. This means that readers can view news as it relates to location, like a weatherman's satellite forecast. The company has reached similar deals with NBC, the Washington Post, and others. There is a hit-list of potential partners taped to an office wall—WaPo, NBC, ABC, CNN.
Outside.In's central conceit is relatively simple. There are many quality blogs, online magazines, and small and large newspapers that feature compelling and relevant local content. Readers are presumably interested in the events happening right around them, but are often unaware of, or unwilling, to look at all the different news sources at their disposal. Outside.In conveniently brings everything together for them.
"It collects information from online sources, based on location, to create your own local paper," says Nina Grigoriev, a marketing director who has since left the company. Using automated algorithms, submissions from bloggers, and a small group of freelance "taggers" who label relevant stories by location, the site assembles a digest of the news in a particular area. For example, a reader from Montclair puts in 07043, and the site returns a selection of stories from local media, including Baristanet. If the user wanted to be more specific, he could look up schools in Nasvhille's Germantown neighborhood, sports in Albuquerque, or restaurants in Manhattan's East Village.
Like other innovations of the Internet, the people behind Outside.In believe the great bounty of hyperlocal content lies in its organization. For example, eBay is the dominant place for Internet auctions, and so the small amounts it charges for listing and completing auctions adds up to significant revenue on a mass scale. At the same time, its overhead costs remain low. In a similar fashion, Craigslist aggregates Internet listings, and Amazon aggregates e-commerce. It is the very same model that Patch is seeking to adopt from Google—"a billion dollars, one nickel at a time."
Imagine the potential of a single portal from which a user could access news about anywhere in the country—the eBay of hyperlocal news. Given the potential of such a venture, it follows that start-up companies would set out to tackle hyperlocal aggregation. Venture capital firms and not-for-profit foundations have thrown their cash behind them, but with varying success. Topix.net is a popular site for discussing news topics, but it doesn't get down to the truly granular level of hyperlocal content. Instead of strictly collecting pre-packaged news, Everyblock offers a range of raw information from crime statistics to restaurant reviews that neighborhood residents can scan. The aforementioned Backfence once aimed to be an aggregating platform for citizen journalists, but its financial troubles have reduced the site to a simple directory service.
The key to Outside.In's financial strategy is that alongside the extremely narrow search results it returns, the site also serves up geographically targeted advertisements. The display or text ads run on the side of the page, and Outside.In can sell them to vendors looking to reach people interested in specific areas. Presenting at a weekly company-wide meeting, ad operations manager Andrea Singer points out the significance of this capability.
"Across the industry, a click-thru rate of .1 percent isn't bad," she says, referring to the measure of how many users click on a particular online advertisement. "Because we can target by location, ours is .2 percent." Josephson chimes in, "We offer advertisers the ability to hyperlocalize transactions." This means that an advertiser like Blackberry (which has bought space on Outside.In in the past) has the ability to direct its advertising to wealthy communities. American Airlines can promote a flight back home to Omaha to a student studying in Ithaca. A clothing company like J. Crew could simultaneously offer a sale on mittens in Minneapolis and sun dresses in San Diego.
Outside.In may have found a working model for generating revenue. But does that mean it provides any journalistic value? Cofounder Steven Berlin Johnson—who says he is the only one in the company with a journalism background—believes it does. "An automatic aggregating system makes news useful," he says. "It's important for the long-term health of newspapers. Local papers are closing their Baghdad office and they should. Outside.In forces them to look inwards to the community they serve."
Vin Crosbie is a former media consultant and current professor at Syracuse University. He agrees with Johnson's diagnosis, though not with his prescription for a cure. "The traditional newspaper package—international, national, and local news—is obsolete," he says. "The only value they have left is local news. They need to invest in covering their communities as thoroughly as they did forty years ago. Unfortunately, many of them are too late, and many local dailies are not going to last much longer."
Johnson and Outside.In are looking to fill the void that newspapers have missed their chance to cover. A respected author, a pioneer in online journalism, and a visible hyperlocal advocate, Johnson was a star at this year's South by Southwest conference in Austin, Texas. In a speech titled "Old Media Growth and the Future of News," Johnson described the coming news ecosystem, in which long-form reporting is included in a mix with instant Twitter updates, short blog posts of analysis, and primary sources like YouTube videos from political candidates.
Regarding hyperlocal news, Johnson delivered this gold nugget of a sound bite: "Five years from now, if someone gets mugged within a half mile of my house, and I don't get an email alert about it within three hours, it will be a sign that something is broken."
Is Johnson's brainchild well on its way to bringing about the hyperlocal revolution he dreams of? Not exactly. No matter how smart the algorithms may be, automatically generated content is a poor substitute for sound news judgment. "It all sounds like a techno-utopian fantasy to me," says Crosbie. "It will help with boilerplate information, but you still need people to put the news together. A bot is not an editor."
Try out a few towns in Outside.In, and Crosbie's concerns come to light. The two key factors in delivering high quality hyperlocal news are timeliness and relevance. And yet, many stories turned up by Outside.In deliver neither. Some are outdated, and others completely irrelevant to the requested locale. A search for Englewood, New Jersey, brings up two-week old news from the South Bronx, football coverage from Englewood, Colorado, and for some reason, the story of an overweight man in Greenpoint, Brooklyn sitting in the Salvation Army store window exhibiting a visible plumber's crack. In larger cities, results were much more recent, but the popular blogs they came from—Gothamist, the New York Times City Room—could hardly be considered hyperlocal.
Despite its shortcomings, Outside.In continues to strike deals with media companies and secure funding from prominent venture capital firms like Union Square Ventures and Milestone Venture Partners, as well as individual angel investors. According to the New York Times, the company has raised more than $7.5 million. It is still relatively young, and as a web site, it will become increasingly useful as it adds more and more content. Most promisingly, the radar maps Outside.In provides to other news sites serve as an effective promotional platform for getting its name, technology, and advertising out to the public. Yet, the failures of its home product—the automated and personalized local paper— raise the question of whether its news value will ever catch up to its commercial appeal. Even if Outside.In perfected its aggregating technology, it would still have to rely on networks of hyperlocal bloggers to produce the content—a group that has yet to figure out a reliable way to make money and emerge on a mass scale.
As a movement, hyperlocal runs counter to the logic of the Internet. From its inception, part of the allure of the World Wide Web was that it shrank an entire world into a global village. Hyperlocal starts with our towns and turns them into worlds of their own. The focus is inward and grounded in real, not virtual, spaces. It cannot grow at the explosive Internet speed we've come to expect from technological revolutions, because its infrastructure is geographically-bound. When eBay took off, it didn't matter if the seller was in Baltimore or Belarus, beyond the additional cost of postage. But nobody on the other side of the world is interested in the local school district.
The disparity between hyperlocal's perceived value and the sluggishness to adopt it has caused some cynics to dismiss the entire concept. They regard the term "hyperlocal" as a contraction of Internet "hype" and "local" news. While it is not clear who coined the term—it seems to have emerged from the crowd-wisdom of the Internet—it is sometimes misattributed to Jeff Jarvis. There is something fitting about associating the term with the Buzz Machine blogger, as they are both forward-looking, always off somewhere in the future. (The earliest reference I found was from a 1989 Washington Post article by Charles Trueheart, referring to "the so-called 'hyperlocal' news that's springing up on cable in tiny markets of 50,000 or less.")
Hyperlocal sites continue to spring up, despite the cynicism. Their growth is spotty and organic, occurring only when the proper mix of environmental factors—web penetration, engaged citizens, local advertisers, etc.—meets the right model for sustainability. Think of Baristanet's spunky personality in Montclair, or the not-for-profit New Haven Independent's high-minded civic journalism.
Patch and The Local have the right idea, working to build online communities from the ground up, rather than assuming they will come later. Traditional aggregation does not seem to work well with hyperlocal—at least not yet—as evidenced by the failure of Backfence and the disappointing results from Outside.In's search pages. When companies try to build sites where they expect the communities to be, rather than where they are, the result are the "ghost towns" George referred to in her review of Backfence, empty planned communities on the Internet.
On a recent trip to Israel, I set out to see if hyperlocal was developing in a similar fashion overseas. (As it happens, Patch and the The Local are the names of an Australian and a Swedish news site respectively.) After some laborious research, spent mostly trying to type in Hebrew, I came across Local.co.il, a Hebrew language news site with local coverage for every major city in Israel.
This site is the hyperlocal portal Outside.In dreams of being. From the 20,000 people in Sderot to the three million people in the greater Tel Aviv area, Local.co.il provides freshly updated news, listings, reviews, and more on a separate page for every city or suburb. A scrolling news ticker, crisp design, and unobtrusive advertising make the site look professional and appealing. The content is a mix of aggregated material and original reporting, and every city-page is carefully arranged and edited. The site even has a Russian version for cities with large immigrant populations.
The most impressive thing about the site, however, isn't the 12,000 unique monthly visitors and 160,000 page views (fairly large for a Hebrew language website), but that it started back in 2001. Here in the States, Outside.In has been working on hyperlocal for a couple of years; but this Israeli counterpart has been at it since the early days of Internet journalism. I had to find out how they did it.
I arranged to meet with the site editor, Amir Duvdavany, at The Local Interactive offices in Kfar Sabah, a medium-sized Israeli town with a thriving tech sector, like a miniature San Jose. As we sat in his nondescript, office I noticed that he was heavy for an Israeli, though his fashion sense (nonsensical English long sleeve t-shirt) was fairly typical. He was a far cry from the yuppies of DUMBO.
Even over the phone, Duvdavany was shocked that an American journalist would be so intrigued by his website. When I met with him, I explained that I had been studying efforts to streamline local content across different cities in America, and that no one had come close to the success that I imagined he was having with his website.
"Success? What success?" he casually dismissed my assumptions. "The website has been losing money since the day we launched it. We just keep it up to promote the weekly newsletter."
He handed me a paper magazine that resembled the J&R music catalogue. The newsletter is a family business started by his father, and among the most popular in the Hod HaSharon region of Northern Israel. The family also owns six other local papers, and shares content with 24 others for the website. Freely delivered through the postal service, most of the newsletter's revenue come from the slew of ads and paid listings that take up close to half the space. As I leafed through the lucrative print publication, it occurred to me that I wasn't looking at the future of local media—I was looking at its past.
Amir even said as much. "The future of the news might be online, but we're in the present. And in the present there are bills and payrolls to consider." Later, he said "maybe the web is not what it promised to be." I felt like a time-traveler who had been sent back into the newsrooms of the late 1990s to warn them of impending doom.
I talked to Amir for about 40 minutes. I told him that the pittance he was making from his Google Adsense display ads was unlikely to increase by too much, even if traffic continued to rise steadily, and that he might want to partner with a local ad network instead. He explained the limits of newsletter journalism as being "informative and not investigative," and that in Israel, people consume news voraciously because of the security situation. "Switzerland, I imagine, has a lot less newspapers per person than we do" he said.
I left Kfar Saba disappointed, but also slightly relieved. If I had indeed stumbled across the company that held the secret to monetizing hyperlocal while on vacation in the Middle East, I would have been incredible busy as the founding editor of its New York branch. 
Michael can be contacted at
