There's finally a bit of good news in Patch's future — AOL announced today that it has taken on a partner to share the cost of managing the struggling network of hyperlocal sites. Hale Global, an investment firm that turns struggling sites into "industry leaders," will take over operation of the site, according to AOL.
AOL will spin Patch into a limited liability company run, and mostly owned, by Hale. The deal takes the financial burden away from AOL, which has seen Patch lose $200 million to $300 million dollars over the years, but promises a financial return if things go well.
The deal also brings things full circle for AOL CEO Tim Armstrong, who helped found Patch while still working at Google, then convinced AOL to buy it when he took the top job there. He promised to make Patch profitable for his company, but hasn't been able deliver on that dream. "As an AOL investor, you should think about Patch 2014 and beyond as an asset with optionality for AOL. Most likely in a partnership scenario," he said during a conference call on December 11. At the time he mentioned that Patch's revenues were up, though not profitable by the end of the year like he'd promised. He also skipped over two high profile departures, his vice president of editorial Anthony Duignan-Cabrera, and his co-founder Jon Brod.
Armstrong convinced AOL to buy the site in 2009. That was, to say the least, an awful idea. Though traffic has been building, the disjointed and decentralized nature of the hundreds of local Patch sites has made it difficult to manage and monetize. This summer Patch laid off 350 employees, about 40 percent of its overall staff. Armstrong even fired one of those employees personally during the conference call announcing the layoffs. (When Armstrong says no pictures he's dead serious). AOL's stock has also taken a few hits over Patch, but as Business Insider put it, Patch "isn't AOL CEO Tim Armstrong's problem anymore."