Newspapers Lose Out As MSNBC.com Snaps Up EveryBlock

(MoneyWatch)  (Note: This post has been updated. In the earlier version I neglected to clarify that EveryBlock was bought by MSNBC.com, not MSNBC.-- DW)
Over a decade ago now, the newspaper industry had its "Craigslist moment," when the profitable classified ad piece of its business model started to slip away, predictably and inexorably leading to the crisis we see today.

This week, the beleaguered newspaper industry had what will eventually be known as its "EveryBlock moment," when the best implementation of the hyper-local news model was snatched up by MSNBC.com. The tiny Chicago-based company had been funded during its initial phase by the Knight Foundation, which hailed the sale with the following statement by Gary Kebbel, director of the foundation's journalism program: "Adoption by the marketplace is a welcome sign of the impact of Knight Foundation's media innovation strategy."

As the Knight funding ran out earlier this summer, EveryBlock became available, needing funding to keep developing its promising approach to aggregating user-generated-content (UGC) with professionally created content and public records databases in cities across the country.

"(W)e've been spending the last few months figuring out how to keep this site alive and make it sustainable," founder Adrian Holovaty posted to the company's blog. "After considering a number of options (some wildly different from others), we decided that working with MSNBC.com was the best fit for our site and our team."

There is a good fit here, plenty of synergy and strategic alignment and all of those good things. But why didn't a newspaper company, some large outfit like the Hearst Corp. scoop up EveryBlock instead? Because the newspaper industry is abandoning "hyper-local," that's why. This is an industry racing toward "hyper-oblivion."

Case in point: The Washington Post has chosen just this week to close down its Loudoun.Extra.com in suburban Virginia. Of course, the Post pursued precisely the wrong approach to hyper-local, with a top-down team of full-time Post reporters, as opposed to a bottom-up model, which would have involved probably only one journalist, curating UGC from the population.

Plus, an aggressive ad sales team, on commission, working the Mom and Pop shops in the community in order to build a sustainable business from the grassroots level upward.

Didn't happen. Isn't going to happen, not in an industry with its head buried so deeply in the sand that some execs apparently bought into hustler Steven Brill's suspicious claim to have signed up hundreds of newspapers for his bogus Journalism Online scheme.

Of course, no names were named. I wonder why not?

Related links from Bnet Media:
EveryBlock Opens its Code, Seeks a Business Model
EveryBlock: A New Model for Local News?