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Firings at AOL’s Patch a Study in Corporate Myopia

by ALFREDO LOPEZ

All is abuzz and atwitter (literally) with news of the firing Friday by America On Line’s boss Tim Armstrong of half of the staff of its local news project, Patch. The firing comes on the heels of Armstrong’s humiliating dismissal of one of AOL’s top executives during an August 9 phone call to 1000 Patch staffers.

All this AOL news in one painful week! It certainly says a lot about how Internet corporate execs’ view their workers, but the more important story is how they view the Internet. How could a major technology company like AOL so deeply misread the culture and the irreversible changes that have taken place in news coverage and how reflective is that of the corporate Internet? Important as it is, that issue has gone largely unreported.

The “incident”, on the other hand, has been reported ad nauseum. It happened two Fridays ago (August 9). Armstrong was running a major meeting for staff members working on “Patch”, AOL’s four year old “localized news” web system. About 1000 people were on the call. In the first few minutes of the call, Amstrong suddenly said “Abel, put that camera down right now! Abel, you’re fired. Out!” He was speaking to Abel Lenz, the creative director at Patch and other AOL news websites. (You can listen to this on a leaked audio from Jim Romensko [1].)

Lenz’s sin? He shot a photo of Armstrong at the meeting–something he would routinely do for distribution to Patch sites. Armstrong, in a subsequent quasi-apology letter, said he had over-reacted but that he had warned Lenz about photos and videos in the past and Lenz just kept on shooting so he fired him…in front of 1000 people.

Last Friday, Armstrong acted more politely but much more painfully. AOL separated Patch staffers into two rooms: one for employees who would be retained and the other for those being fired. Remote staff were given a dial-in number to their appropriate room. Armstrong then addressed each, firing about 350 in one room and telling those in the other room that their jobs (and local news sites) were safe for now but things had to improve or there may be more down-sizing. In fact, sources at AOL are sure that at least 150 more people will soon lose their jobs.

There’s much speculation about why Armstrong would hold one meeting to threaten cuts and then another a week later to specify the cuts. But, as important as that is for those who lost their jobs, and probably for the bunch who have momentarily kept them, there is a more important question for the rest of us: Why in the world would a collossus like AOL go against the tide in news coverage that we are all witnessing — the rise of blogs and participatory journalism — by investing a reported $60 million in a service that started failing the moment it went live?

Armstrong founded Patch with Warren Webster and Jon Brod before he took over AOL in 2009. When he assumed the mantle of the troubled Internet mega-corp, Armstrong engineered AOL’s acquisition of Patch for about $7 million, making clear that he would not personally profit the deal. Soon after, he committed another $50 million to Patch’s development and, in many ways, it did develop. The project hired hundreds of journalists from all over the country to report on local developments and news in the areas in which they lived and produced a constantly renewing and cleverly packaged system of localized websites to deliver the work of those staffers. There were local calendars of events, news items and even some analytic fare.

It would appear, in theory, that Patch was a brilliant use of the Internet to address a very real need: with the demise or “shrinking news hole” of local papers, people in towns and cities across the country have few traditional media outlets for real local news. Patch addressed that perceived need by providing a mini-site of news for your area based on your zip code (which you can input) or your choice of a huge drop-down menu for your state (which you can select). . It does that for over 900 U.S. cities, towns and neighborhoods, [2] although that number will now apparently be cut to about 600.

But Patch’s dazzle can’t hide the fact that it has continued to lose money, attracting an embarassingly small number of visitors and very little revenue-generating advertising, as U.S. sales director Jim Lipuma admitted in a frantic memo to his staff after Armstrong’s first meeting [3]. The operation is a failure, and the reason has to do with how corporate marketing vision is incompatible with the Internet.

While the need for local news was accurately perceived, the picture was incomplete. Sure, traditional media wasn’t covering local news anymore, but that didn’t mean local news wasn’t being covered. Armstrong’s myopia, apparently epidemic among corporate Internet executives, missed the true trend: blogs, often written by people who were living in areas and even participating in the events, are reporting local news and the Internet world is reading it. Mainstream media has quite simply lost its audience to a kind of journalism that rings more true and more authentic (and much more timely) than anything the paid publications is able to come up with.

The problem is obvious when you really look at what Patch is publishing. An area like Brooklyn, where I live, is covered, for example, by about six or seven localized web-pages. When you look at one such page, say for the Park Slope area, a series of news pieces run down the page blog-style (headlines and content teasers with a link). They’re definitely relevant to Park Slope. But then look at the page for Bedford Stuyvesant (Bed-Stuy), another important Brooklyn neighborhood, and of the seven stories highlighted only two are different from the ones for Park Slope.

What’s more, the Bed-Stuy stories appear to feature news of interest to “hipsters” and “gentrifiers” — the professionals and “better off” residents, mainly white, who have moved into this traditionally black neighborhood which boasts a long and rich culture central to the history of African-American and Caribbean people in this country. The area still has a huge black population. Where is their news?

An operation like Patch confronts one of the traditional problems mainstream journalism has always faced: its hiring practices mean it is condemned to reporting about the lives of people through the eyes of journalists who aren’t “of” those people and frequently don’t know the first thing about them. To the point: Patch is supposed to write about the local news of this country, almost forty percent of which is comprised of people of color. One look at Patch’s top staff (on its about page [4]) speaks volumes about its ability to do that, and a careful look at the reporters assigned to the specific communities reveals that same ugly trend: when will corporations learn that you can’t cover a racially mixed world with reporters who are almost all white?

The expansion of the Internet into communities nationwide, the Internet’s deepening roots among young people and the blurring of the lines that have traditionally separated the reporters from the reported on have spawned countless blogs and participatory news sources that can report an incident, development or trend as it happens where it happens. No centralized news operation, including Patch (which assigns one journalist to an entire neighborhood) can compete with that.

The power of the Internet is its empowerment of its users. For the first time in our history as a human race, we can massively report on our lives: sharing the details and our thinking about them. Since our lives in this country frequently involve and are affected by local issues, people’s blogs (a prime vehicle for sharing) addressed those things. In many cases, reporting on an event was done by people who actually participated in it. Analysis of an issue was often done by people intimately and personally affected by it. And all that reporting allowed readers to react and write of their lives, comparing issues and analyses. Journalism has become an exchange of information and a sharing of realities.

Which would you prefer? Reading an article by a reporter who may be visiting this block or meeting these participants for the first time or one by a person who lives on the block and is neighbors with the participants?

The Internet blog has restored us to the powerful person-to-person communication that has always been our primary source of important news (until very recently), a powerful centerpiece of every culture on earth. It is the modern-day version of the “community circle” except that, with the Internet, the circle can comprise millions, even hundreds of millions, of people.

The mystery isn’t why people choose that circle over something like Patch, it’s why AOL doesn’t seem to realize it. But that may not be so surprising. Corporations look at the Internet and don’t see it. What they see is a huge potential market to be lured in squares of demographics — a market that ignores the idiosyncracies and realities of people’s lives. For corporate executives, the Internet isn’t a massive town square of shared reality; it’s a huge crowd gathering under a building’s news ticker. Corporations can’t comprehend the fact that people would rather talk to each other about their lives than look up to read some reporter’s story about them.

So they will keep doing these projects and, while a few may succeed, most will fail. The problem will always be that the corporate Internet won’t understand the reasons for failure and success. They will refuse to grasp that projects like Facebook succeed because they empower users, allowing them to dictate (even to a minor extent) the content being exchanged, while those that spoon-feed information to users will fail because most users no longer trust corporations to tell them the truth.

How could a guy like Tim Armstrong admit to himself that billions of people, most of whom don’t know him, don’t trust him or the other execs of Internet information companies? It would be admitting that the technological innovation that pays him his huge salary was actually developed by the human race to make roles like his extinct.

Alfredo Lopez writes about technology issues for This Can’t Be Happening!

 

Alfredo Lopez writes about technology issues for This Can’t Be Happening!

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