Company acquires Patch (Community News) and Going (Local Events) Platforms
AOL.com is investing in local, community-based information platforms. They announced the acquisition of Patch.com, a growing community news platform already available in five locations, and expecting to be up to 12 by the end of the year; and Going.com, a event platform that covers 30 major cities in the US, and that now hopes to expand worldwide.
Tim Armstrong, AOL’s Chairman and CEO says “Local remains one of the most disaggregated experiences on the Web today — there’s a lot of information out there but simply no way for consumers to find it quickly and easily,” and that the “acquisitions of Patch and Going will help us build out our local network further with excellent local services that enable people to stay better informed about what’s going on in their neighborhood.”
Or where they can party. Going.com, in the words of its CEO, Evan Schumacher “allows young people in leading cities to discover upcoming events, parties and new hot spots – and most importantly connect with others who share a similar lifestyle. By joining with AOL, we have the opportunity to greatly expand the reach of our platform to more cities both in the U.S. and around the world”.
As for Patch’s CEO Jon Brod, this is a good chance to grow more digital communities, under the AOL umbrella: “AOL’s substantial network will help us extend the reach of Patch into more and more communities. And Patch, as part of AOL’s local strategy, will create new opportunities for AOL to delight consumers and provide marketers access to highly targeted and deeply engaged audiences.”
“AOL has a legacy of connecting people to the content, community and services they care most about,” said Armstrong. “Patch and Going, combined with our existing network, will enable the company that got America online, to connect consumers around the globe to their communities online.” According to data from the press release, local advertising (online and offline) represents an approximately $103 billion market (approximately 39% of total U.S. ad spending), which might have somewhat infuenced this deal.
On a note sent out to AOL’s employees, (via TechCrunch) Armstrong highlights the importance of these acquisitions for the company´s local strategy, and discloses he was a “early investor in Patch and committed significant dollars to the vision of improving local communities with deeper online information, accountability through journalism, and a platform for communicating. In discussing our local strategy, AOL and Time Warner looked at Patch as a possible acquisition and I recused myself from that process. At the Time Warner negotiated acquisition price, I was in a position to earn a return on my investment in Patch. However, I have decided to forgo any profit from my seed investment in Patch and I have asked to receive just my seed capital in AOL shares once we separate from Time Warner.”