Many Independent City Sites Generating Six
(November 30, 2005)
Traditional media and news resources are facing a new crop
of competitors. According to Research and Markets, Independent
local Web sites have gained steam, rejecting the popular
business model of loading up a site with news, weather, sports
and classified listings. Their strategy of offering simple
Web sites that focus on entertainment and recreation has
many of them generating revenues well into six-figures.
Feverish growth in online advertising has spawned a new
crop of local Web site competitors. They are elbowing in
on territory that traditional local media properties have
been trying to stake out for the past decade, but they are
using a decidedly different model. Rather than fill the site
with repackaged local news headlines, obituaries, or weather
reports, these independent local sites focus almost exclusively
on fun and interesting things to do around town. While local
media home pages in San Francisco lead their pages with crime
news and updates from Iraq, SanFrancisco.com leads with nightlife,
dining and attractions.
The strategy is apparently beginning to pay off. Many independent
local sites are reporting revenues well into six figures,
with respectable margins. In fact, about 20 owners of City.com
URLs banded together recently to form their own trade association.
A flurry of acquisitions has begun as well. LocalMatters.com
recently secured a $20 million investment that it will use
in part to buy AreaGuides.net, a large network of city guides.
Boulevards New Media, a network of 90 city sites, paid $500,000
for a City.com URL. And a Las Vegas newspaper publisher offered
$12 million for LasVegas.com.
Independent sites tend to have a fraction of the traffic
and revenue of competitors who are financed and promoted
by traditional-media outlets, but the underdogs offer an
interesting lesson: Keep it simple, keep it upbeat, and don't
forget the out-of-market traffic. They are focusing on sites
that win attention from locals and travelers alike, and are
tapping ad revenues from some of the largest spenders on
interactive advertising: hotels, casinos, airlines, real
estate agents, resorts and restaurants.