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In what is possibly the first infant steps to backward integration in the media world, internet giant AOL has decided to spread its roots to gather local news from Patch, a tiny community reporting news source.  Patch currently operates with just over a 100 reporting sites in California, Illinois and New York, New Jersey belt and is headquartered  at New York City.

AOL is planning to expand the patches to around 400 sourcing sites in the business hubs of Eastern and Western United States. It is concentrating in towns having large numbers of Banks, small business and Automobile, dealerships.  It would hopefully bring in advertisement revenue from the commercial establishments in the neighbourhoods. Local news  is reportedly a very significant ad puller accounting for $20 billion, almost 10% of the total online ads.

Currently freelancers pick up local news and events, look at local business and report community discussions and concerns, update videos and photos to a Patch website where an experienced  and professional journalist edits the content for updating as newsworthy material. It has senior professional editors, writers and photographers based in New York, besides an advisory board. Its management team has tied up with AOL through one of its founding members Jon Brod, now an executive Vice President at AOL.

AOL is the second large internet house to get into news sourcing after Yahoo tied up with Associated Content to gather and publish news from its content pool a few months ago. Brod feels that there is a huge wealth of news and events at the community level that has potential to attract committed readership.

AOL has been going through a rough patch ever since its break-up with Time Warner Inc. after a 10 year marriage with the giant media group. A few months ago under the leadership of Tim Armstrong its new CEO  it sold of its social networking website Bebo and is now restructuring its content to hardcore news collection from smaller websites like Engadget  the electronics and tech gadget website and Seed the variety topics content pool.

The Armstrong vision plans to hire 500 journalists, media managers  and editors this year to manage the 500 patch websites with each website being fed by 11 content writers , freelance photographers and video-makers. The Armstrong strategy is focussed on local news gathering, which though innovative is brave as per market analysts, considering that heavy weights like New York Times and eBay have failed previously to successfully monetize local news. However the limited number paid employees on the AOL payroll due to its use of the  patch network could lower its break even & help it succeed.