AOL officials announced today it's unloading the majority of Patch, its nationwide hyperlocal news organization, to investment firm Hale Global.
The deal will come to fruition in the first quarter allowing Hale Global to own the majority of the corporation while AOL holds onto minority interest.
Tim Armstrong became AOL CEO in 2009 and invested hundreds of millions of dollars into Patch by hiring local reporters and editors and sales people for the news websites.
Here is the AOL press release:
Companies Create Joint Venture to Pursue $152 Billion Local Media Market
AOL Inc. (NYSE: AOL) and Hale Global announced today the creation of a joint venture to run Patch, the premier platform for local news and information in the United States that serves more than 16 million people monthly** with a network of more than 900 sites. Under the terms of the agreement, AOL will contribute Patch into a new limited liability company, which will be operated and majority owned by Hale Global.
Hale Global brings substantial experience in the areas of online media, local marketing, mobile, retail, and advertising and has an impressive track record for re-defining company visions and creating long-term growth from the companies they operate.
AOL and Hale Global believe residents of all communities should be empowered through technology to stay connected and informed. The companies are committed to re-launching Patch as an efficient platform that allows citizens and businesses to create and share locally-themed news and content -- not just with those in their own communities but to the wider world.
Among the concepts planned for Patch moving forward: Technology solutions to make community participation seamless Mobile-first experience with social integration National, regional, and local advertising self-service tools Geo-targeted advertising products
"We are committed to bringing users, local businesses, writers and advertisers together into a Patch experience full of innovation and growth," said Charles Hale, CEO of Hale Global. "Along with AOL, we are committed to taking the necessary steps to ensure Patch remains a vibrant part of the community."
"We are impressed by the commitments from Patch and AOL to serve communities and advertisers and look forward to working together to achieve our shared long-term vision."
"Patch is an important source of information for communities, and the joint venture we created has a unified mission to provide local platforms and hyper-local content," said Tim Armstrong, Chairman and CEO of AOL. "AOL has established leading positions in attractive scaled opportunities including video, brands, advertising and subscriptions by making bold bets and strategically investing in these high-growth opportunities -- and local will be a growth space during the next decade of the Internet."
"Hale Global has a strong track record of operational excellence and platform experience, and we are looking forward to working closely with them on Patch," Armstrong said. AOL will retain a minority interest in Patch.
The companies anticipate closing the joint venture early in the first quarter of 2014, subject to customary closing conditions. Financial terms of the transaction were not disclosed.