Topix's CEO on the Future of "Micro-Local" News
Chris Tolles, CEO of Topix, doesn't think much of journalists. "There's a lot of arrogance among journalists, as if they are performing a public service. Their job should be to get lots of audience attention and engagement. Period." Never mind that three of Tolles's major investors are Gannett, McClatchy and the Tribune Co., representing the largest newspaper chains in the country. He's seen the future of news, and here's how it looks:
"There will be three tiers, if you will. One will be journalists, because they won't all go away; two will be bloggers, essentially; and three will be the commentarians." It's this third tier that Tolles is betting his business on. Topix has a "zip code search" function that has turned into a sort of virtual chain of local community clusters of comment-posters.
Tolles says Topix carries comments from 20,000 cities and towns around the U.S. these days at the rate of 150,000 comments per day. One surprising (to me) finding is that three-quarters of these comments are not tied to any referring news article, because in many cases, there isn't any local news article to refer to.
Tolles estimates that 1400 local newspapers around the country publish an average of six original local stories a day. "That means most localities get no coverage," he calculates.
Topix is geared not to the "Top 25" markets like New York and San Francisco, but to smaller, more under-served areas of the country. Even though the company aggregates links to some 50,000 newspaper articles a day, Tolles sees that part of his service as secondary to the emergence of the "micro-local" markets he is weaving together into a national network for advertisers.
Monetizing this segment is his business goal, of course, and by checking through the site, I confirmed that Topix is doing a very good job at targeting neighborhoods and small towns for its advertising partners. For one small community in the South I'm familiar with, there were what appeared to be about a dozen targeted ads -- mainly from Google AdSense, which Tolles confirmed is the company's top advertising partner.
One reason he is such a big believer in comments is that they tend to boost an item's score on Google and on other search engines. So, these dense clusters of comments around some local piece of content offer a solid opportunity for the company to make money.
Is Topix profitable yet?
"No, we are not," replied Tolles, without hedging. "But I expect we will be over the next 9 months to a year. After all, the participation is the content."