AOL Launches $10 Million Hyperlocal VC FundMarch 18, 2010
 NEW YORK: AOL is stepping up its focus on local content by
launching a $10 million venture capital fund for related start-ups, PaidContent.org
reports. The Internet Service Provider turned content distributor is already
drilling down into the hyperlocal arena with its expansion of Patch.com. AOL’s annual report indicated
it planned to invest $50 million in the hyperlocal news site that covers around
40 small towns in New York, New Jersey, Massachusetts, Connecticut and
California. AOL acquired Patch last June for a reported $7 million. It recently
revealed plans to add 15 more hyperlocal sites over the next three months.
The strategy puts AOL in competition with many local broadcasters starting
their own hyperlocal initiatives. Fisher Communications, for example, launched
its hyperlocal drive last August with 43 Web sites targeting Seattle
neighborhoods. It more recently invested $1.5 million in DataSphere, the
company that helped launch the initiative that now comprises more than 100
sites.
Analysts are hot on local media as well. The folks at BIA/Kelsey see it as a
$140 billion business enhanced by geo-targeted advertising this year. A
recently published Pew study, however, questions the revenue source for local
information. (See “Funding for
Newsgathering Dries Up.”)
AOL also said today it’s relaunching its City’s Best platforms in 25 cities
throughout the year, “and add high-quality, city-specific content to its ‘best
of’ entertainment options for each of these metro audiences.”
The VC fund, which AOL calls “one of the first such initiatives of its kind,”
will target local Web initiatives. It will be operated out of AOL Ventures.
“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. “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 will also up the local content on AOL.com,
through intuitive geo-targeting technology, later this year.
In addition, AOL intends to increasingly incorporate local content on the
AOL.com homepage, using intuitive geo-targeting technology to tailor
information across a range of interests to the user’s location later this year. -- Deborah D. McAdams
(Image by Marc Buehler)
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