Wednesday, February 01, 2006
Community web sites explore how to sustain themselves financially
ORIGINAL URL:
http://online.wsj.com/article/SB113875833236061670.html
PORTALS COLUMN:
Community Web Sites Explore How to Sustain Themselves Financially
February 1, 2006; Page B1
By LEE GOMES
The Wall Street Journal
As the pastor of a small evangelical Presbyterian church in Greensboro, N.C., the Rev. Joel Gillespie tries to keep people from sinning. As a bail bondsman in Fresno, Calif., Albert Ramirez has an economic incentive to hope that they do.
But such differences don't mean the two men can't find common ground elsewhere. Indeed, each bought "banner ads" on small local Web sites -- Greensboro101.com and FresnoFamous.com, respectively -- that cover their communities. As a result, both are participants in one of the most intriguing business stories of the day: the manner in which the Internet is changing journalism, and vice versa.
Community Web sites started showing up a few years ago, often as a labor of love by some Web-savvy local resident. Now, many of these sites are trying to become actual businesses, complete with the sort of profits that can make them self-sustaining.
Community sites operate much like a traditional community newspaper would, though all of them take advantage of newfangled, Web-based tools, such as allowing readers to submit digital photos or blog posts.
As you would expect, these sites tend to take on the personalities of both their operators and their locales: lots of pictures of new Eagle scouts on suburban ones; slightly "edgier" content on the ones that cover urban locales.
The best of them also make an effort to do something resembling journalism: getting out and talking to people, then writing about what was learned in the process.
The obvious way to pay for all this is with advertising. But while advertising is moving online quickly, you need lots of eyeballs to charge lots of money. That is something smaller sites, by definition, struggle with. A New York financier familiar with the terrain says a site serving a community of 30,000 could, based on current Web advertising rates, expect monthly revenue of less than $4,000.
Site operators say that is on the low side, but they acknowledge it's a tough fight. The FresnoFamous folks wouldn't discuss the dollars and cents of the bail-bond ad. But Mr. Gillespie paid just $100 for 10,000 views of his church's banner ad, currently the only one on the Greesnboro site. Based on normal traffic patterns, those views should occur in about two weeks, says Roch Smith Jr., Greensboro101's owner.
Mr. Smith, of course, projects that business will grow. But to the extent that it does, competition will be ferocious. Local newspapers of all stripes -- dailies, alternative weeklies and weekly shoppers -- aren't likely to cede these community spaces without a fight. And then there are the "aggregators," companies striving to create a common software platform that can be used in many different locales. Backfence.com is a venture capital-funded operation starting out in the suburbs of Washington, D.C. YourHub.com, owned by the Denver Newspaper Agency, is already active in four states.
And then there is the question of what, if anything, the Googles and Yahoos of the world might do. Indeed, Jarah Euston, the 26-year-old former Wall Street bond analyst who founded FresnoFamous two years ago, says that one of her biggest fears is MySpace, the youth-oriented "social networking" site. There is a lot of information about events on MySpace. Ms. Euston frets that it will one day become easily searchable by ZIP Code, and thus compete with the calendar listings currently at the heart of her business.
One indication that economies of scale will play their expected crucial role in community journalism is that both Ms. Euston and Mr. Smith are thinking of expanding, Ms. Euston to Modesto, another central California town, and Mr. Smith to Syracuse, N.Y., where he found a simpatico blogger. And both say they would welcome some way for small sites to band together to attract national advertisers while still keeping their independence.
So what about the advertisers? Mr. Gillespie says he was drawn to Greensboro101 because he himself is an active blogger. Mr. Ramirez says he was simply trying to help his family-owned business keep up with changing times. (By the way, while most people's stereotype of a typical bail-bond client is not someone reading blog posts, Mr. Ramirez says Web surfers tend to skew young, and the young in turn tend to skew toward getting into trouble.)
As for whether the ads have paid off, both men say it is too soon to tell. Community Web sites are clearly one of those economic spaces that are "in play." It's hard not to root for the locally owned little guys, in much the same way that most of us would prefer that local film buffs, not Blockbuster, own the nearby video store.
You can find a list of many of community sites at cyberjournalist.net. I'm inclined to urge people, if they like their local site, to support its advertisers. I'm just a little worried about how some Fresno readers might take that advice.
Write to Lee Gomes at lee.gomes@wsj.com
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