The lament of newspapers has become familiar by now: With readers moving online, the once community-binding dailies are falling apart, losing both readers and advertisers. That’s especially true for small town papers. But a growing site called Topix is picking up where they’ve left off, self-reportedly reaching over one hundred million pageviews a month.
Topix has come a long way since its inception. Originally conceived as a news aggregator consolidating thousands of sources for local audiences, it shifted its focus several years ago to include the users — allowing citizen journalism, commenting, forum discussions and polls. That’s when it began to grow in earnest, as people in small communities began to find their local news portals on Topix and participate.
When I first talked to CEO Chris Tolles earlier this year, several newer startups like Outside.in were getting heavy press. Tolles noted the difference between Outside.in’s slick interface and the more dated look of Topix without concern, suggesting that his company gets little attention in Silicon Valley because it serves a middle American audience with different tastes. “How do we get people to do one thing in mass numbers?” he asked, pointing to the simplicity of the commenting system as one answer to the question.
At that time, about six months back, Topix was getting a staggering 120,000 comments per day on its forums and articles, but the growth has continued; most recently, it was receiving an additional 30,000 daily comments.
Topix is an interesting case study. The idea of a Silicon Valley company turning away from the metropolitan, tech-savvy audiences that most web startups target is fairly rare. But in raw numbers, that techie crowd is a minority. Some 50 percent of the nation’s people now have broadband web access; as the other half come online, the market for websites that appeal to the average person will probably claim far more users — as, arguably, MySpace has already proved.
Topix may have an early mover advantage on a large segment of the population, but it is also challenged to sell to its userbase, which is distributed countrywide in towns of 5,000 to 50,000 people. Tolles points out that Manhattan advertisers feel little confidence in placing ads for a user group they don’t understand, especially when the results of a campaign may not be clear.
“The future of advertising online is an understanding that the effects are somewhat unmeasurable,” Tolles opines, although conceding that advertisers have yet to come to terms with that idea.
It might also be hard to prove to anyone but close partners that Topix is really experiencing high growth. The company told me their internal Google Analytics numbers showed 115 million pageviews in September, split among 15 million unique visitors — nearly a four-fold increase since the 3.9 million uniques it logged in September 2006. But while one measurement firm, ComScore, says that Topix is the third largest newspaper site online, another, Compete, shows it on a plateau of around 5 million uniques.
So while the site continues to add partnerships — several recent ones include ESPN, Eventful, Informa Research and Sprint — it also remains something of a niche unto itself. Tolles thinks that will change once the numbers hit a certain threshhold, saying, “Nobody paid attention to Craigslist until they realized it was getting a billion pageviews.” (Craigslist currently shows over 40 million monthly uniques on ComScore).
An outside possibility for a site like Topix to see a surge in profitability would be to build its own advertising network of local businesses that have traditionally fed newspapers. While Tolles will only casually speculate on the possibility of Topix building such a network, the idea itself is almost inevitable, as well as necessary for sites like his — not to mention newspapers themselves.
There is definitely room for a major new entrant, Greg Sterling, the founder of analyst firm Sterling Market Intelligence, told me several months ago. “But the small business market is fragmented, and it’s difficult to put together. It’s just more complicated than the national market,” he said. So for now, the market for local sites remains more or less as it was — ignored.
