amtwnslogo.png You may have never hard of American Towns, a company building an online “public square” for every town in the United States.

It has received a $3.3 million round of capital to realize that goal.

The financing comes from Idearc Media, the publisher of the Verizon Yellow Pages and owner of the local search engine, Superpages.com.

Fairfield, Conn.-based American Towns is one of a number of companies in the “hyperlocal” market — sites that target small geographic regions. Back in July, we reported that BackFence, a hyperlocal site that had attracted a $3 million investment, was closing its doors. Some suggested that the site’s failure reflected larger problems with the hyperlocal market and questioned whether a legitimate business opportunity existed here at all.

There are plenty of companies still trying. Outside.in, which features hyperlocal news and blogs, may be the best known; Smalltown offers listings for local businesses, Topix aggregates community news and classifieds, and Judy’s Book covers shopping.

As the investment in American Towns and another recent $10.6 million first round for citizen journalism site, NowPublic, shows, the belief that this market will generate substantial returns carries on. (Mark Potts, a founder of BackFence, offers his two cents here ).

In December of 2006, the site listed 140 towns and the company’s president Jim Maglione says it had reached up to eight percent of the households in many of them. It now lists 10,000 towns, and says nationwide coverage is due by the end of the year.

American Towns has built a crawler that finds URLs related to a specific town and extracts events, news, and community announcements. It uses this crawler to create virtual town squares, with content relevant to each town, but encourages users in its communities to take ownership of these town squares and start generating their own content. Whether or not a significant percentage of the population will participate is yet to be seen. In comparison Topix is getting user-generated content to the tune of 60,000 comments a day across 1400 towns.

The partnership with Idearc will give American Towns a new outlet for its content and help Idearc enhance its own locally-focused services.

American Towns also raised a $1.1 million round from undisclosed investors last July, and is only now announcing it.

More context here, from the Kelsey Group, which calls American Towns an “also ran.”