Dozens of companies have been trying to develop the sites less because of a journalistic mission than the lure of local advertisers migrating to the Web. The Kelsey Group projects that small businesses will spend $32 billion by 2013, and Peter Krasilovsky, a program director at the Kelsey Group, told the New York Times that many have never advertised outside the local Yellow Pages and are an untapped market.
According to a poll of US marketers by Bredin Business Information, marketers are increasing their online activities, becoming more focused and conducting segmentation research to better target their customers. Borrell Associates estimated SMBs spent $7.4 billion on local online marketing in 2008.
The problem as always is content. Will local news sites, such as Patch, be able to to pay enough for quality journalists and capture enough of a local audience to be scalable?