Hyperlocal|September 22, 2011| Author: Kim LaCapria|Tags: ,

AOL’s Armstrong Defends Patch But Says Sites Need to Get Profitable

AOL CEO Tim Armstrong would like all you media types to lay the hell off all the money-bleeding Patch talk, thank you very much.

Armstrong was defensive of his pet property speaking about it recently, underscoring how important the hyperlocal service is to web content in general in his estimation, while admitting that AOL can’t go on seeding the service forever as they wait for users to catch on to the innovation. Hyperlocal is an interesting market given the amount of area a nationwide network needs to cover in the US, and the amount of groundwork- and apparently, massive amounts of cold hard cash- needed to create such an initiative.

While hyperlocal sites have a captive market, there’s no guarantee users will get hooked before the money runs out- if at all. Armstrong acknowledged the funding issue when discussing Patch’s profitability. ZDNet quotes the chief executive:

“We’re continuing to learn a lot everyday about Patch, other towns, and how to connect things,” said Armstrong, adding that more features will be rolled out in time. He also acknowledged that 2011 will be “the high-water mark for spending on Patch,” and spending should go down in a few years based on revenue.

As of now, there are around 870 local Patch sites, and 1,000 are expected by year’s end. Armstrong asserted that the investment in Patch by AOL is “very valuable.”