AOL acquires two Web companies
Patch Media, Going picked up for $10 mil eachNEW YORK -- AOL said Thursday that it bought two companies that build community-based Web sites, marking its first acquisitions since former Google advertising chief Tim Armstrong took the helm of the struggling Internet company.
The purchase of Patch Media Corp. and Going Inc. for less than $10 million apiece will help AOL reach deeper into the market for locally oriented Web sites.
Both operate Web sites tailored to different cities. New York-based Patch runs sites offering local news and general information, currently serving five communities. Going, which is based in Boston, runs sites revolving around local events in 30 cities.
AOL's existing local properties include mapping service MapQuest, event sites CityGuide and When.com as well as classifieds sites that target numerous cities around the country.
Armstrong, who joined AOL as chief executive in April, said in an e-mail to staff that the local market was "prime for innovation."
Armstrong is an investor in Patch. He said in the e-mail that he will not earn a profit from the deal but his initial investment will be repaid in AOL stock once Time Warner Inc. spins AOL off as a publicly traded company.
Time Warner said last month it would make an initial public offering for AOL around the end of the year.
AOL originally purchased media company Time Warner back in 2001, at a time when AOL's chief business was its dial-up Internet access service. Since then, that business has faded as consumers moved to faster Web-surfing options, and the company has struggled to refashion itself around online advertising.