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Community Corner

What is the Status of the Windsor Patch?

I listen to NPR (National Public Radio) and my two children call me a NPR airhead.  In the past two weeks I have heard two stories about a non bright future for Patch.  What follows is from a Google search of AOL Patch and is from the August 17, 2013 USA Today: 

AOL said Friday it is laying off about 500 employees at Patch, or about half of the total workforce working for the local news site division.

The New York-based media company is also closing or consolidating about 150 of the 900 news sites that are designed to compete with local newspapers for online viewers and local merchants' advertising budgets.

Find out what's happening in Windsorwith free, real-time updates from Patch.


"Patch's strategy will be to focus resources against core sites and partner in towns that need additional resources," the company said Friday in a statement. "Unfortunately, with these changes we are announcing today, we will be reducing a substantial number of Patch positions."

Shares of AOL, which owns the Huffington Post and TechCrunch, fell 0.7% Friday and ended at $35.21.

Find out what's happening in Windsorwith free, real-time updates from Patch.

The layoffs had been anticipated after AOL CEO Tim Armstrong warned employees in a meeting on Aug. 9 that a round of job cuts was coming and asked those who didn't believe in the venture to voluntarily leave.

During the closed meeting -- a recording of it was obtained by JimRomenesko.com, a media news site -- Armstrong also fired a creative director on the spot for using his camera, leaving the attendees in stunned silence. Armstrong later apologized for the way he fired the employee.

Armstrong also fired Patch CEO Steven Kalin earlier this month. Bud Rosenthal, who was and remains AOL's president of paid services and membership, assumed operational control.

Armstrong co-founded Patch in 2007, betting that readers would flock to websites that focused entirely on news and developments in their neighborhoods.

Patch was bought by AOL in 2009, shortly after AOL named Armstrong as its new CEO. With more financial support from AOL, Patch went on a hiring spree, assigning reporters and editors to more towns and cities.

AOL doesn't disclose Patch's financial performance, but many sites failed to live up to internal expectations in online traffic or ad sales. During an earnings call earlier this month, Armstrong told analysts that he began identifying the sites that were lagging in performance, implying that they were targeted for closure.

The company said Patch's online traffic grew 10% in the April-to-June period from a year ago. AOL's advertising revenue rose 7% to $361 million in the second quarter.

"We have decreased (Patch's) cost structure to roughly 25% already this year and we would expect to remove more cost at Patch going forward," he said. "As an investor you should recognize that the changes we are making in Patch will negatively impact traffic and revenue but they will meaningfully improve profitability and AOL's profitability."


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