MSNBC buys EveryBlock; WaPo to shutter hyperlocal site

Posted by Liz Webber on August 24, 2009 at 3:14 PM

Last week, MSNBC.com announced the purchase of EveryBlock, a platform that allows users in 15 US cities to search for news, photos and other data based on ZIP code. The move will allow MSNBC to provide much more local content, which was previously limited to aggregated news stories.

MSNBC.com President Charlie Tillinghast told Advertising Age the acquisition makes sense because it would not be feasible for the news site to hire its own reporters in every local news market. However, Tillinghast sees EveryBlock more as a complement to local news rather than a direct competitor.

The exact purchase price for EveryBlock was not named, nor did Tillinghast provide any specifics on a revenue plan - perhaps because most hyperlocal ventures are still trying to figure out what model works best. EveryBlock, which launched in January 2008, was initially funded by a $1.1 million grant from the Knight Foundation.

There are obvious benefits for EveryBlock in the deal, as MSNBC.com is the number one news site in the US. The hyperlocal platform will continue to expand to other cities while sharing its content with MSNBC. Last month EveryBlock released its source code to the public, which some heralded as a boon for local news providers, specifically in the domain of "geotagging" stories.

While MSNBC was crowing about its hyperlocal acquisition, the Washington Post announced the impending closure of its own two-year-old hyperlocal venture, LoudounExtra.com. A WaPo spokesperson said operating the standalone site was "not a sustainable model." Following the site's closing in September, LoudounExtra.com content will migrate to Washingtonpost.com. Another hyperlocal site the newspaper had in the works, FairfaxExtra.com, will also fold.

WaPo was one of the first major news outlets to experiment with hyperlocal content, and LoudounExtra.com heralded further innovation by offering content for mobile devices right from the start. However, an article appearing in the Wall Street Journal one year ago claimed the site failed to live up to its potential because there weren't enough links to WaPo or to the community the site served.

An analysis in the September issue of Fast Company examines the viability of the hyperlocal model. Some claim that local advertising is a $100 billion industry; the online ad market alone is predicted to grow 5.4 percent to $13.3 billion this year. At the same time, hyperlocal news stories aren't generally very appealing to advertisers. How then can such niche sites hope to post a profit?

The New York Times' blog the Local, which operates in a city already saturated by competitors like Patch and Maplewood Online, recognizes advertising isn't enough if the venture hopes to be profitable. Editors foresee licensing the Local brand to bloggers in other cities. The issue then becomes who would monitor the content, as it would still be attached to the NYT name - a hurdle the newspaper isn't yet prepared to overcome.

Fast Company gripes hyperlocal has been "the next big thing" since 2004, yet no one has really achieved great success in the area. That hasn't stopped other outlets from catching the hyperlocal bug. Fisher Communications, which owns a local TV and radio station in the Seattle area, last week launched 43 hyperlocal sites catering to the metropolitan region. The sites will present community news in real time accompanied by user-generated content.

Source: Advertising Age, Brand Republic (1), Fast Company, Brand Republic (2)