AOL seeks to fill need for local news with online news site Patch

John Morton, a newspaper analyst based in Silver Spring, said it's unclear whether local online news ventures can succeed financially. He said online advertising has yet to generate the revenue needed by newspapers, which have suffered from falling circulation and print advertising revenue.

"Really what is required for any of this to be established and to continue is some kind of a workable business model, and so far no one has come up with one," Morton said.

AOL thinks it has found one in Patch, which it bought last year for $7 million. An original investor in Patch was Tim Armstrong, a former journalist who is now AOL's 39-year-old chairman and chief executive; he waived his right to receive any money beyond his original, indirect $4.5 million investment, the annual report says.
Keep Reading>>