AOL Chief: We Will Use ‘All Means Possible’ to Get Patch to Profitability by Q4 | Street Fight

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AOL Chief: We Will Use ‘All Means Possible’ to Get Patch to Profitability by Q4

9 Comments 08 May 2013 by

PatchAOL’s hyperlocal media network Patch has rolled out its redesign from a handful of pilot communities to 100 markets across the country, Tim Armstrong, AOL’s chief executive, said during an earnings call Wednesday morning. The move comes as AOL focuses in on Patch’s model, pushing the closely-watched news network to reach run-rate profitability by Q4 of this year.

The redesign, which the company originally debuted on several of the network’s sites in September 2012, aimed to transition Patch from a traditional news property to a community-driven platform, in part to reduce the heavy editorial costs that have brought down the company’s bottom line. The original pilot centered around subject-specific Groups, where readers could discuss topics such as crime, schools, and government.

The rolled out redesign appears to be something of a departure from the original pilot. On the Bellmore, NY site  — one of the original pilots that has since been updated — Groups (now called Boards), which dominated the pilot’s central feed, are now buried into a secondary tab, leaving the homepage a mixture of blog posts and “announcements” posted by readers.

The redesign is one part of what Armstrong has called “the finish line of profitability.” In September, the company forecast a rapid rollout for the redesign, planning to reach the 800+ patch sites by the end of Q1 2013. The company also missed its own $40-50 million revenue target for 2012, effectively shifting more of the burden of achieving profitability to cost reductions.

“The plan to get [Patch] to profitability is driven around trying to keep the information in local communities as stable as possible, and then working the business side and cost structure side to get to that point,” said Armstrong, responding to a question about potential courses of action if Patch does not reach its goal by the end of the year. “What you’re going to see as we approach Q4 is us trying to get to the finish line of profitability, and we will use all means possible to get there.”

In addition to further cost cutting, Armstrong said he would not rule out “other revenue products,” such as partnerships, to reach that goal. In the company’s Q4 2012 earnings call, the former Patch founder floated the idea of partnerships with legacy media companies, but the extent to which the company has tapped these potential revenue streams is unclear.

Steven Jacobs is deputy editor at Street Fight.

  • LOL Patch

    As someone who worked for Patch for 2.5 years, all I can say is there isn’t a company more mismanaged than that piece. LOL, all Patch employees will lose their jobs in 2013 (except for 50 suckerfish imbeciles), and the once decent local news sites will be populated with even more garbage.

    • http://twitter.com/BigLocalNews Big Local News

      We at BigLocalNews.com are looking for Neighborhood-Reporters nationwide. Compensation for our Neighborhood-Reporters is uncapped and is directly attributable to the amount of traffic your work drives to our site (unique hits versus gross ad revenue on your pages). Spread the word – we launch next year, and we are looking for talented & foward looking Journalists.
      Mike Taylor
      Big Local News

      • http://twitter.com/BigLocalNews Big Local News

        Typo: “forward” looking Journalists.

  • NicholasWieland

    The local site by me in NY is no longer a community site it is populated with drivel from other community’s which I do not want to read. They have lost most readers that I know have flipped to thehuntingtonian.com for our local news.

    • gonefishin215

      Same. The local newspaper near me and a the levittownnow.com blog started by former patch correspondent are my main sources of communiity news. The LevittownPatch news site stopped reporting on real issues and just publishs reports on cars, restaurant reviews, and some community pictures now.

      • Tom Sofield

        Thanks to gonefishing215 for the kind words on the coverage and impact of LevittownNow.com.

        We’ll keep striving to continue to provide hyper-local coverage to the Levittown, Pa. region.

        Again, thanks!

        Tom Sofield
        Editor/Publisher, LevittownNow.com

  • Former Patchy

    Patch is, was and always will be toast. Starboard was 100% correct on their assessment of the product.

  • TomGrubisich

    I went to the Bellmore site on Long Island that AOL is showcasing as the new Patch, and what I saw featured on the front page — “News & Blogs” — were articles on a free summer camp, free CPR, “Let’s make your toes look their best,” “Welcome to Livingston Foot Care Specialists,” “The Hair Bar and Makeup Lounge Approaches First Anniversary,” “Buy Ladies Flowers for Mother’s Day” and “Catch a Flick on a Rainy Day.”

    Was it maybe a slow day for news in Bellmore?

    I went to the Bellmore Herald, and what I saw featured were “County executive vows to ‘hunt down’ possible ‘predator’ in Bellmore-Merrick area,” “Bellmore man arrested on drug-dealing charge,” “Cops: Man fled after Bellmore shoplifting arrest” and an entire section on the continuing story of Hurricane Sandy, whose direct pathway included Bellmore. I didn’t see any article on how to make your toes look their best.

  • TrickleDownTacoRiff

    Buzzwords, jargon, corp speak and a completely nebulous product virtually unknown to any real user….sounds like a winning recipe!


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