At the MIT Enterprise Forum held last week at the New York Times Center, Michael Shapiro of TheAlternativePress.com lashed out at Aol’s hyperlocal effort, Patch, claiming the company lavishes money on new user acquisition to little effect.
During his presentation Shapiro aimed to put AOL’s Patch.com on the defensive, saying that the company recently announced that it had spent $50 million during 2010 and had only obtained 3 million unique views per month, raising questions about Patch.com’s revenue model and its viability. Shapiro noted that despite spending $50 million, AOL’s Patch.com had approximately the same readership per town as TheAlternativePress.com, though at 4.5 times the cost. “AOL’s Patch.com spent $1.39 per unique view in 2010. We spent about a quarter,” Shapiro noted, adding that “TheAlternativePress.com is the David to AOL’s Patch.com Goliath and we’re the only profitable hyperlocal here tonight. Our business model works.”
While Patch may be filling the void left as local papers close across the U.S., if true, their business model is charity for underemployed journalists, but far from sustainable.
h/t: Mark Briggs
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