AOL Winding Down Patch

Is the great Patch experiment over? If not, the local news providers may have lost their biggest backer. AOL CEO Tim Armstrong announced last week that Patch, long his pet project, could be forming partnerships with local companies—a signal that AOL could be abandoning the project. Armstrong brought Patch with him to AOL from Google, then secured a $50 million investment from the AOL board in 2010. Since then, Patch has cost somewhere between $200 million (AOL’s estimate) and $300 million, and the hedge fund Starboard Value LP ran for three seats on AOL’s board, contending that Patch isn’t a “viable business.” The company laid off more than 350 people this year and hundreds of local sites were shut down.