AOL Still Betting on Patch

The localized publishing platform ended the quarter with about 10 million unique visitors, around 6,500 advertisers and a sales force of 230 people. A telling statistic Armstrong mentioned was how at the end of the first quarter of 2011, there were 33 Patches that had over $2,000 in revenue, compared to the end of the fourth quarter of 2011 that had 401 sites taking in more than $2,000,

It’s easy to scoff at the tiny numbers — this hardly looks like a Google-size business, after all — but AOL appears to see enough positive momentum that it will continue to plow ahead with the project, critics be damned.

“2011 should also be the high-water mark for our Patch investment,” said AOL CEO Tim Armstrong in a call with Wall Street analysts. “I would expect to see meaningful improvements on the economics of Patch during the year.”

Armstrong can count on a bit of breathing room thanks to improved fundamentals in the overall AOL media business. The company said ad revenue was up 10 percent to $363.8 million compared to a year earlier. Even more promising, AOL’s bet on display advertising appears to be paying off, with a 15 percent uptick in global display revenue.  Armstrong cited in particular AOL’s bet on the “Project Devil” large ad units as paying off.