(NOTE: I originally published this article on Poynter's E-Media Tidbits blog. I'm republishing it here, slightly re-edited.)
Last week, Backfence (which runs a high-profile family of hyperlocal citizen-media sites) announced a substantial retrenchment. CEO and co-founder Susan DeFife resigned, citing differences with the company's board of directors. Also, 12 of 18 employees were laid off.
Ouch! This news has spawned much thoughtful discussion and interpretation. For instance, see the comment thread from this Local Onliner post.
Search Engine Watch noted: "This is an unfortunate setback, given the company's growth over the last 18 months from its original D.C. area community sites, to its west coast expansion and many Bay Area site launches (it now totals 13 sites in D.C., Chicago and Bay Area). ...Its apparent cash flow problems and layoffs could be telling, and a more sustainable hyperlocal strategy could be in an aggregation model like that of the newly launched Placeblogger. Time will tell if this is the case."
Yes indeed -- finding a sustainable way to financially support local news content is a thorny issue. Personally, I don't think conventional advertising can continue to shoulder most of that burden, in any media.
So how can you build a sustainable business based on local content, including citizen journalism?...