22 March 2010

AOL Goes 'Local' with $10M VC Fund

Washington Business Journal
AOL Inc. continues to bet on local content, establishing a $10 million venture capital fund it will use to make investments in startups focused on local markets.

AOL said it will also increasingly incorporate local content on its AOL.com homepage, using geographical targeting to match content to where a user is located.

“Local is one area of the Internet that has not been built out in an extensive way,” said AOL CEO Tim Armstrong. “While there are companies in the local space, AOL has the technology to digitize the local space at scale. We believe it is an untapped market for the most part and one of the largest commercial opportunities online that has yet to be won.”

AOL will also expand its Patch network, a local content and advertising network of community focused content. It already has a presence in about 40 cities and will add 15 more. As part of that expansion, AOL will hire local editors in each town it serves.
AOL will also relaunch its City’s Best network, local entertainment guides, in 25 cities by this fall.

AOL, whose spinoff from Time Warner Inc. was completed in December, is betting its future on content, much of it provided by outside sources. Its Seed.com portal is specifically for freelance journalists, writers, photographers and videographers who are seeking out assignments or who submit original content.

AOL has also been investing in technology, acquiring dozens of small companies whose technology can enhance its own multimedia and marketing capabilities.

AOL had $239 million in 2009 earnings, compared to a $1.5 billion loss in 2008.

AOL has cut its workforce by a third, mostly through layoffs after a participation in voluntary buyouts fell short of goals. The company had 2,400 employees in Northern Virginia at the end of 2009. It moved its corporate headquarters from Dulles to New York in 2008.

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