Wednesday, June 2, 2010

Hyperlocal idea raises some serious dough

Jane Bryant Quinn in a 2006 appearance
on the Tavis Smiley show on KCET. 
I don't recall how I stumbled on Main Street Connect, the franchiser of hyperlocal news sites that just raised $3.97 million.

It was last fall or summer, I think, when I saw a mention of it, another in a long line of ideas that continue to surface in the wake of mainstream media's implosion.

What initially caught my eye was the involvement of Jane Bryant Quinn, who once wrote a syndicated newspaper column on personal finance. I was the business editor at one daily when she ended her newspaper run soon after 9/11 -- and, boy, did readers squawk. But she continued to publish columns in magazines, talk about personal finance on TV, and write bestsellers.

Now she's editorial director of Main Street Connect, which she and husband Carll Tucker founded in mid-2009 after the local weekly serving their country home in Dutchess County, N.Y., ceased publication. Tucker, once a staff writer for the Village Voice, ran a company in suburban New York City that published community newspapers, which he sold to Gannett Co. Inc. in 1999. At Main Street Connect, he's editor, publisher and CEO.

Their company offers technical know-how and other support to entrepreneurs who want to operate an online local news site: "... programs, launch capital, training, and ongoing guidance our local partners need to succeed," says Main Street Connect's mission statement.

The Nieman Journalism Lab likens what the company offers to the franchised burger model: "A local team assembles the journalists who will cover a community, then Main Street Connect provides the framework for everything else, including the technical setup (and ongoing support), plus an underlying business strategy." For its work, Main Street Connect gets what amounts to a royalty fee of 17 percent of revenue.

So far, the company has helped launch seven sites in Fairfield County, Connecticut: Norwalk, Darien, Westport, Weston, Wilton, New Canaan and Fairfield. They're crisp and clean looking, full of school and community news (some shared, some distinct to each town) and ads.

The goal is 3,000 sites across the country by 2013.

In a column over the weekend (that, incidentally, is listed as among the most viewed), Tucker says the sites don't offer ads but "Annual Visibility Packages": "It's the idea that the way to build your business is to remind your neighbors not only of the quality of your goods and services, but also about who you are and how you contribute to the community."

Package "sponsors" (aka "advertisers") pay not according to page impressions but a flat contract fee. In return, they get not only what looks like a tile ad on the site (what Tucker dubs the "shop window on the Digital Town Green"), but also space to salute customers and others with small head-shot displays called "Our Customer Comes First" and "Local Heroes."

They also get pictures of special events -- what jaded journalists call "grip and grin" shots -- on the site's Celebrate! page, and, according to Nieman, a guaranteed number of stories that run in the site's Features section -- what newspaper traditionalists would see as a breach of the advertising-editorial divide.

In an offering filed with the U.S. Securities and Exchange Commission, Main Street Connect said it raised nearly $4 million from 21 investors in May. (The filing put the minimum investment from any outside investor at $50,000 and the total offering amount at $10 million.) No broker fees or sales commissions were paid.

Here's a promotional video posted to Vimeo on Main Street Connect. Two of the featured speakers, Peter Georgescu and Stephen Sadove serve on the company's board. Georgescu is chairman emeritus of PR/advertising powerhouse Young & Rubicam Inc.; Sadove is CEO of high-end retailer Saks Inc., which advertises on the Fairfield County websites.

Note Sadove's comment that the sites provide the opportunity for a company like Saks to meet its goal of "shifting [ad] dollars from national to local."

Main Street Connect: Norwalk from Mark Joyella on Vimeo.

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