Still plenty of potential for local media

Is it over? Is it too late for local news organizations to change strategy and find new business models online?

Despite billions of dollars spent in attempts to bury local news organizations and yellow pages publishers, the puzzle is still in pieces. “It is still not clear that we have cracked the code,” Mark Canon said, estimating that more than $3 billion (and possibly as much at $15 billion) had been invested.

As Seth Godin recently riffed, there is still ample opportunity to use digital technologies to connect, then profit. He observes that while newspapers are “tanking,” news is on the rise. Connect readers to one another with hyperlocal news and you’ll have no problem finding sponsors and advertisers, as long you “actually and truly reach everyone.”

That’s why Gannett has invested in Cozi and Ripple6. Cozi is an online family planning tool which makes it an odd choice for a news organization. Or, if you’re focusing on connecting with an audience, an obvious one.

Local newspapers can stop kicking themselves for not creating their own Craigslist, eBay, local Wikipedia (it won’t help matters). But what about Yelp? Paying one (or a handful) of restaurant critics is no match for a community of informed and passionate users who are connected to one another on a site like Yelp, which of course, is growing like crazy.

Look at Citysearch’s new plan. This company launched in the early days (full disclosure: my wife worked at Citysearch in the late 1990s) and reinvented itself several times. But it’s still around and it’s new model is has as much to do with connection as content.

And, it appears, at least a few investors think users will pay to be connected to information on local services. Angie’s List recently announced a new round of investment and says it has 750,000 members in 124 markets. Members pay a monthly fee to access the reviews. The company has raised $66 million to date.

The bottom line is this: Focus on the opportunity to create value through collaboration and connection. Build or leverage the brand value to create momentum. Pick a market for its potential, not its past performance.

As Godin said: “The best time to do any of these projects was five years ago, so that today you’d be earning thousands of dollars a week. Too late. The second best time to start: now.”

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