AOL - FROM PATCH TO FULL BODY CAST

Patch, a hyper local division of AOL just announced a course correction that will attempt to hire 8000 unpaid local blog contributors by May 4th. HA!

Patch is quilt work of 800 sites dedicated to local community news. But the cost of paying each of the 800 editors and staff is a losing proposition for AOL.

Arianna Huffington to the rescue! Replicate the HuffPost model! No need to pay for content when they can offer writers what?.....Nothing!

This is a train wreck waiting to happen and yet another example of the folly that has become AOL.

This parting shot from Mediabistro's Fishbowl LA ...

"In other words, if you have any ethical qualms about demanding free content from your writers, better get over them now–or the only thing you’ll have to worry about is the door hitting your ass on the way out."

AOL AMERICA'S ONLINE LUNACY

When AOL and The Huffington Post teamed up last month it sparked controversy that is now spilling over into the investment world.

AOL stock is being shorted by investors betting that the company will tank. Not far from its all time low of $18.51 on March 16th, it may only be a matter of time before it, like MySpace, begins to drift towards the Bermuda Triangle.

Further complicated by a class action suit instituted by one of Huffington Post's contributors, the complaint charges that none of the $315 million paid by AOL for the news and opinion website co-founded by Arianna Huffington and Kenneth Lerer was shared with the writers and other creators of the site’s content. The suit seeks class-action, or group, status.

The complaint claims that 9000 writers provided the site with free content worth as much as $105 million, which “should be returned” to the plaintiff and the class. Huffington Post derives revenue from advertising on the site.

Adding insult to injury, the majority of the contributors who supported Arianna's site as a more liberal platform are now taking a back seat to the more conservative AOL.

Did AOL not believe that a site whose content, driven by 9000 freelance, unpaid writers, would not create a backlash? It is so very obvious that AOL's CEO and largest shareholder, Tim Armstrong, is desperately rearranging deck chairs on a sinking ship.

Watching and waiting.


Click on the chart to enlarge it

HOW NEWS COMPANIES WILL PROSPER

The controversy and sparing between newspaper companies and aggregation sites was recently highlighted in an editorial by Arianna Huffington on her site The Huffington Post. Taking aim at Rupert Murdoch's call for pay walls, she handily convinced her audience (albeit a web audience) that pay walls are not the answer.

Maintaining journalistic excellence while making a profit is becoming increasingly impossible for news companies that cling to a print-only business model.

There is hope.

At today's gathering at the World Newspaper Congress in Hyderabad, India, over 1500 participants heard how a news and information company in the U.S. is transforming itself to become a digital savvy operation that turns the old print-only model on its ear while projecting record profits. This company successfully reverse-engineered the production and, importantly, the distribution of content looking to the web first and print last.

John Paton, Chairman and CEO at ImpreMedia, the largest Hispanic News and Information company in the U.S., passionate about journalism, the communities he serves and his dedicated employees, provided his audience with a road map for what appears to be a successful embrace of the digital landscape before us.

His speech can be read here. I urge you to read it.

In closing, Mr. Paton also announced new initiatives for hyperlocal media efforts extending to local communities in New York and LA via community blogging partnerships. ImpreMedia will establish E-Journalism Media Labs and shepherd key community bloggers to address the importance of hyperlocal journalism.