AOL is apparently breaking up Patch, a fledgling network of local news websites founded by AOL CEO Tim Armstrong, The New York Times reports.
Times media columnist David Carr referred to Patch as Armstrong’s “white whale,”
a project that Armstrong refused to abandon, despite years of failing to turn a profit and becoming a “black hole for cash.” Losses, according to the Times, have run to an estimated $300 million, although AOL puts the figure closer to $200 million.
Armstrong helped launch Patch while a senior executive at Google in 2007 and later convinced AOL to acquire it after he took the helm there two years later.
Through its site TechCrunch, AOL released a statement
calling the Times depiction of the Patch network coming to an end “inaccurate.” The statement said AOL “stands behind what CEO Tim Armstrong said” at a December conference, where he told attendees that Patch may form partnerships with other companies.
Patch sites, 900 at their peak, provide local content covering everything from high school sports to municipal government. But according to the Times report, hundreds of sites have gone dark and more than 350 employees have lost their jobs because the company was unable to conquer local advertising markets.
Despite Patch’s challenges, Armstrong said at the conference that AOL is otherwise flourishing, a statement that its rising stock price appears to confirm.
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