March 18, 2010 Last Updated 9:01 am

AOL sets plans for “aggressive expansion of Patch”, its hyper-local news platform; establishes VC fund

AOL announced plans to expand its local content offerings by relaunching its City’s Best and by expanding its hyper-local news platform Patch. AOl will also be creating a venture capital fund, reportedly worth $10 million, to look at start-ups in the local space.

“AOL is investing meaningfully in our communities through trusted, professional journalism and location-specific content in a compelling way that is valued by our users and attractive to our advertisers,” said AOL Chairman and CEO Tim Armstrong in a release. “Local is the one area of the Internet that has not been built out in an extensive way. While there are companies in the local space, AOL has the technology to digitize the local space at scale. We believe it’s an untapped market for the most part and one of the largest commercial opportunities online that has yet to be won.”

AOL said that they intend to begin incorporating local content on its AOL.com home page using geo-targeting. “AOL is focused on building meaningful content with our local platforms — regardless of how or where consumers connect to us,” said Jon Brod, Executive Vice President of AOL Ventures, Local and Mapping. “All of the ways people share information now — Facebook, Twitter, MySpace, Foursquare and others — will also be targeted to distribute our content. The outstanding quality of our local content and its relevance to users are among the key elements that will drive this effort.”

AOL will be aggregating the local content itself using its own Relegence technology. AOL purchased Relegence in 2006 for $50 million.

Patch currently has 40 local sites, all in California or on the East Coast.  Two new Patch sites have launched for Danville and San Ramon (adjoining communities) and another is planned for Pleasanton. (Disclosure: I was once the CAM, then ad director for The Valley Times in Pleasanton.)

The Patch sites continue to be pretty much advertising free and the advertising marketing material remains rudimentary. Ads are priced on a monthly rate, not impressions. It will be interesting to see when Patch gets serious about revenue.

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