In March of 2011, Patch snapped up Outside.in, a startup that built and managed an Application Programming Interface (API) which aggregated and distributed hyperlocal content from over 90,000 sources. For Patch, whose business model centers on the production of original content, the acquisition was less about aggregation, and more about distribution — an API effectively allows any developer to navigate and integrate information from a particular library, into an application with zero friction.
Larger media companies (the New York Times and the Guardian in particular) have opened their archives to developers with substantive investments in proprietary APIs. For the most part, however, APIs have been leveraged to distribute more structured information — namely, location and point-of-interest data — in the hyperlocal space. Almost every location-based application in development today is being built on datasets created and distributed by companies like Factual, CityGrid, and (recently) Foursquare.
The Patch API provides for the standard mechanisms for querying hyperlocal content — namely, venue name and geospatial searches by latitude-longitude radius, places, and neighborhoods. Patch content is given preferential treatment, but thanks to the Outside.in acquisition, the company is able to back-fill requests in non-Patch communities with aggregated hyperlocal content from across the Web.
“What Outside.in has brought to Patch is the ability to serve content from across the country,” Rob Platzer, Patch’s VP of technology, told Street Fight. “We can go to a major national partner that might want to integrate content and say that we’re not going to deliver them blank results because we can always back fill with aggregated content.”
Patch has already partnered with CNN (originally a client of Outside.in) to serve up hyperlocal content to the cable network’s weather and local pages. CNN readers who expose their location are targeted with local headlines from local CNN affiliates, Patch sites, as well as Outside.in’s 90,000 aggregated sources.
“What Outside.in has brought to Patch is the ability to serve content from across the country,” says Rob Platzer, Patch’s VP of technology.
“What’s proven out by [the CNN] arrangement, is that an API removes the friction in [media-to-media] relationships and lets partnerships evolve organically, and iterate overtime easily,” says Lauren Sperber, product lead for Patch engagement. “We’ll see less of this closed, walled-garden approach to content and more distribution of content because it drives traffic back to the original content site.”
Outside.in originally monetized the CNN partnership through a technology licensing agreement, but as a subsidiary of Patch, the play appears to be more about increasing Patch’s footprint and driving traffic to its network of sites. Although the licensing agreement model works when a company is partnering with larger media partners, the upfront cost associated with the model effectively inhibits broad adoption in the intensely fragmented, and stratup driven, location-based application space.
“From a business model perspective, a lot of what were seeing is through affiliate and ad revenue as usual,” explained Devon Biondi, director of strategic services at API management solution Mashery. “However, a lot of it is the kind of revenue sharing and affiliate targeting which, is obviously a very viable business model and the more relevant you can make yourself to the end user the more profitable you will be.”
Mashery, which provides the portal and proxy for hyperlocal API’s from companies like Patch, Quova, and Yellow Pages Canada, is very aggressive in building a strong developer community around its client’s products. In October, Mashery co-sponsored a hack-a-thon with American Express that brought hundreds of young developers to New York’s General Assembly to “Reinvent Local.”
Amit Jotwani, developer advocate for Mashery, says that Patch’s API is beginning to garner interest amongst LBS developers. “At the events I’ve been to recently, developers have been really excited about hyperlocal news content,” Jotwani explained to Street Fight in an interview. “They’re coming up with some cool mash-ups by playing around with the idea of combining geo-location with content and both with social relevancy data.”
The ecosystem around hyperlocal APIs is still quite young, but as companies like Fwix structure editorial information by geotagging content, the use case for developers to build hyperlocal APIs into their products will improve.
Foursquare’s recent re-launch of its “Save to Foursquare” feature (a revamped version of the company’s failed “Add to Foursquare” experiment, which was discontinued in 2010), is a major step in the right direction. The feature allows publishers to relate stories and reviews to places listed in Foursquare’s places database. Although it’s unclear if, and when, the company will open the feature to developers via its popular set of APIs, the “add to Foursquare” button will effectively build a layer of hyperlocal content around its existing venue database, and create a viable roadmap for incorporating content into arguably, the most widely used API in the hyperlocal space (Biondi says that 80% of the apps built at the Reinvent Local hack-a-thon used Foursquare’s API).
As online media continues to advance, time and topic will undoubtedly remain as the dominant filters for how publishers organize content. However, as more and more location-specific media is geotagged, editorial content may find an important second-life in location-based mobile applications. With an API, media companies have an unprecedented ability build and manage content partnerships at scale, even in the extremely fragmented LBS space.
For small-radius media, in which location plays a far greater role than niche or national media, a walled-garden approach to content will substantially impede industry growth. Ignoring LBS as a viable distribution channel is tantamount to leaving the industry’s most valuable asset grossly under-leveraged.
Platzer says that the Patch/Outside.in team has been in business development discussions with a couple of potential 3rd party applications, but declined to comment on specifics. He did however, point to upcoming integrations with other AOL subsidiaries, highlighting MapQuest in particular.
“We always talk about local, but it has been unclear up until now whether local is where I live, where I work, or where I am standing right now,” says Platzer about the emerging application space. “In many ways, local is relative to where you are at an given moment, and the mobile device finally has allowed us to answer this question.”
Steven Jacobs is an associate editor at Street Fight.