I believe there are four reasons to be optimistic about the future of news media.

• Post-modernist cynicism,
• The Long Tail,
• WordPress, and
• Patch.com

Post-modernist cynicism creates a consumer attitude that there is no real truth in any one source. Truth - if it can be known - is individual and personal, rather than delivered. Today even the least media savvy know that you can't trust what you see on TV and that smart people look for multiple sources.

This is very bad news for large dailies like the Tribune and Sun-Times, which have striven to serve the every man. They are like the old Marshall Field's and Wieboldt's department stores, once Goliaths that were slain by a thousand Lilliputian Circuit Cities, Gaps and Linens 'n' Things.

It is good news for startups looking to create a niche. If they can find you, readers will read you and consider you a credible source. You can get a foothold if you serve an unserved niche.

The Long Tail is Chris Anderson's theory referring to the edges of a Bell curve. That our culture and economy is increasingly shifting away from a focus on a relatively small number of mainstream products at the head of the demand curve and toward a huge number of niches in the tail.

Again, this is bad news for large dailies. They can no longer provide one-size-fits-all-news, like the kind you find on newsstands. To capture reader interest, they must find ways to cover as many different niches as possible. This is what Tribune is attempting with Chicago Now - but even then, the Long Tail stretches farther than Colonel Tribune can reach, providing the rest of us with a lot of room to run in.

WordPress is a magnificent free tool with which you can publish your reporting in a professional-looking manner from Day One. It is easy for beginners to start, and if you choose to learn more, there is a world-wide, welcoming community that will show you how to solve its programming problems. It is a complex, free, very flexible tool that is the underpinnings of many important news sites including the New York Times and Yahoo News.

And my news sites too!

WordPress is as important a revolution in publishing as the pairing of Pagemaker with a laser printer was twenty years ago.

Finally, Patch.com is not a cause for optimism because they are hiring but because they are spending a lot of money on convincing people that hyperlocal news, with just one local editor, is a credible source. I am beginning to believe that Patch.com will be known as the Starbucks of local news. They will encourage an entirely new category of news consumers who are discerning about their local news.

As Intelligensia and Metropolis Coffee could not have existed without Starbucks first paving the way, I think Patch.com will do the same for hyperlocal news.

There's a great deal of opportunity out there. But it isn't like anything we've seen before.

Before Patch.com came along, there were a lot of people who never even considered hyperlocal news as a legitimate source. But Patch, which has a tremendous marketing effort behind it, has the goal of not only capturing people who do a lot of websurfing, but everyone that reads weekly print publications for local news. Patch is attempting to not only attract existing hyperlocal news readers, but create new ones.

This got me thinking about Starbucks. It's hard to imagine now that there almost as many Starbucks as McDonald's, but twenty years ago, Starbuck's mission was to convince coffee consumers that they wanted to spend $3 on coffee. Starbucks aimed to create a whole new class of consumer.

Says Doug Zell, CEO of independent coffee roaster Intelligensia, "They do a lot of things right, and they raise public awareness about coffee. They basically opened the door. I think that the fact Starbucks is so ubiquitous has driven up the expectations for what is expected of an independent coffee roaster."

I don't live in a Patch area, but I do hear a lot more talk about hyperlocal news than I did a year ago. I'm wondering if the creation of Patch News has something to do with that.

My grandfather, who had nobody to talk to about his private studies, honestly thought it was pronounced, "pa-hi-ziks".

Arriving in Chicago flat broke, Paul had no place to stay and was not invited to U of C, so he lived in a tent in Jackson Park while he trudged around the campus, searching for a physics professor who would talk to him. Finally, a prof took pity on Paul and invited him to show his stuff on the blackboard. Young Paul quickly scribbled out a mathematical explanation of some of Einstein's theories.

The professor, astonished, challenged the kid to show him something else, just in case he had memorized a theorem or two. Paul rolled out more math on the board. His understanding was real.

Soon thereafter, my grandfather was allowed to "test" through the University of Chicago undergraduate and masters physics and math curriculums earning him a place on Enrico Fermi's team. A few years after that, Paul Ireland stood on Stagg Field with Fermi and helped split the first atom.

This is all true.

This weekend is the launch of something I first started thinking about five years ago: A subscription-based Chicago political news site written by real, experienced journalists. EarlyAndOften.org, powered by the Chicago News Cooperative.

You should subscribe now - for $150 you'll get an unbelievable amount of information between now the run-off election on April 5, 2011.

I can't even begin to express how excited I am to see this happen.

Aside from the short-term dream of realizing this project, I've wanted to create a major metropolitan news publication ever since editing my college newspaper. This is big for me.

The first credit for making this happen needs to go to Jimm Dispensa. He first created Aldertrack in 2007, on which much of our effort has been based. When I met with Jimm last winter to talk about restarting Aldertrack for 2011, he let me glom onto his project and turn it into something different. Despite all the struggles that come with a project like this, Jimm gave me his full confidence throughout the process. Most importantly he believed that I wasn't a nut bag.

Whatta guy.

The second pile of credit needs to go to the leadership at Chicago News Cooperative: Jim O'Shea, Jim Kirk and the unfortunate object of my constant phone calls, CNC Business Manager David Greising. They not only immediately understood how the concept would work but also how it could help CNC grow. They took complete ownership of the idea and got excited about how they could deliver excellent editorial content to people who wanted it.

I first proposed this idea to CNC three months ago. In that time we fleshed out the idea, built a site, determined our editorial content and our target audience. Then all of a sudden, Mayor Daley announced he wasn't running for reelection -- the intensity and importance of the project only increased. In almost three weeks we'll launch the site.

CNC has made clear-headed decisions, got behind them and moved fast. This is the kind of entrepreneurialism journalism needs to thrive.

Finally, the most credit should go to my wife, Teresa. She tolerates me and hones me. Everything I am and do is better because of her. There is more I could say, but it would embarrass her too much and could never explain the fullness of how important she is to me. Thanks for everything.

A coda: The start of this project means the end of another. I'm officially closing up Purely Political Consulting, Inc. Being a political consultant and working in news media doesn't mix well. I had a great fifteen years working in politics, but like so many friends, I realized that there needed to be something that came after politics.

What's even stranger to me is that no one in Chicago ever seems to talk about this or even recognize it. It's nothing but a chorus of "local" and "hyper-local". It's as if there's a missing gene in its media DNA. 

The plain fact is, outside its own four walls, Chicago media is irrelevant.

I don't think things are as bad it may seem for the non-Patchers because Patch.com has a problem with asyncronicity. I'll explain what I mean about that in a moment.

Understandably, smaller hyperlocal operators are cowed by Patch.com's significant marketing muscle. Gangs of sprightly 24-year olds in matching t-shirts and visors at commuter stops can be intimidating. So can a legion of paid freelancers guided by well-paid full-time local editors.

The Patch.com machine is hitting mom-and-pop hyperlocals on the ground by flooding the local zone with lots of reporters, covering every last donut shop. And then Patch.com bombs neighborhoods from the air with the matching t-shirts and national marketing buzz.

Ladies and gentlemen, welcome to the Shock And Awe phase of Patch.com's plan to take control of hyperlocal news.

We should anticipate a great deal more of this from Patch.com. They will expend a tremendous amount of effort and treasure to demonstrate their dominance. For instance, a friend running the Patch in Oak Park, Illinois posted a Craigslist ad offering $12.50 for every brief write-up on local businesses submitted. The unstated goal? To create Oak Park's first complete business directory - a great way to snag search traffic. Every Patch.com site is doing this sort of thing.

Their plan is pretty darn good. Get quality editors. Make them live locally. Flood the zone with news. Hype each Patch launch with lots of marketing. Repeat.

But Patch.com has a significant chink in its plan: They are creating a synchronous operation in an environment that interacts asynchronously.

For those of you without a military or programming background, let me provide an example of what I mean.

When the United States invaded Iraq in 2003, our military created then-Secretary of Defense Donald Rumsfeld's "Shock and Awe". Enormous bomb tonnage was dropped on Iraqi Army positions and hundreds of thousands of U.S. troops poured into the country, often rushing past fractured and immobilized Iraqi units in a coordinated rush to secure important military objectives: airports, fuel dumps, government offices and broadcast stations.

The U.S. military smashed every regular Iraqi unit that dared oppose it. These were synchronous engagements. Two opposing forces encountered one another under similar operating conditions and objectives. In this case they were both uniformed regular military and they both aimed to control land, buildings or whatever other geographic objectives. Because it was better trained and equipped, every time the U.S. military could find its opposition, they used overwhelming firepower and resources to destroy the enemy.

Years later, long after the Iraqi military was disbanded, the occupying U.S. military was pulled into conflict with guerrilla forces. Now the enemy no longer wore uniforms. They didn't fight on traditional battlefields and their objectives were not to control objectives but to harass U.S. military occupation forces.

These were asynchronous engagements. The two forces had very different operating conditions and objectives. One had traditional uniformed troops living on massive bases with top-down control. The other was composed of loosely organized groups of fighters from local communities that chose their own targets and times to engage. One drove billion-dollar tanks, the other used bombs triggered by cell phones.

On its own, one Iraqi guerilla unit could barely harm the U.S. war machine. But thousands of cheap roadside bombs and no need to "clear and hold" - control geographic objectives - has enabled Iraqi insurgents to slowly wear down American forces and encourage them to leave Iraq. This defines "victory" for Iraqi insurgents.

On the flip side, victory for the U.S. military is more elusive: The total elimination of insurgent activity - "clear and hold". It require unbreakable barriers and an easily punctured sense of civilian security. The American forces can expend endless treasure and lose hundreds of troops a year and never really obtain a permanent victory.

Back to hyperlocal news: Patch.com is playing the same game as the U.S. military: Clear and hold. Patch.com must use marketing muscle to build local audiences and keep them interested in their publications run by people from out-of-state. When you consider it, Patch.com has taken on a never-ending task that will eventually become boring for corporate marketers and editors alike. Patch.com content is destined to become stale.

Many locally-operated hyperlocals are already like guerrilla forces: Operating on the cheap, taking what audience they can, staying fresh and local, working to gradually erode Patch.com's dominance. These locally-operated hyperlocals' goal are not large profits, but to break even, have fun and engage their communities. They merely want to exist - and steal Patch.com readers. An asynchronous engagement that Patch.com will never be able to overcome.

Eventually Patch.com will run out of marketing steam, cut back on the freelancers and fold up shop where they are not making a profit. Maybe not every Patch location, but if there's a well-run locally-operated hyperlocal, it'll happen.

Not surprisingly, most of the commentary was anti-Patch and came from either competitors or hyperlocals who probably feel threatened by their ominous soon-to-be arrival in their hometowns. I'll admit it. I too sense Patch's growing shadow on my little hyperlocal - and it's something that motivates my team to do the best work we can to prepare for the coming competition.

But the set of most interesting comments came through Twitter from two Indian developers, Arjun Ram and Brij Singh, who pointed out that Patch, as well as hyperlocal aggregators like Fwix and Outside.in are probably not counting on creating stand-alone profitable businesses, but would be part of a group of websites operating under "portfolio theory."

My Indian developer friends are probably right - and that bothers me a great deal. To explain, I must digress for a moment.

Years ago, when I was a political appointee at the U.S. Department of Energy, I was lucky to have a boss named Dr. Mark Mazur. More than anyone, Mark taught me the value of rigorous, critical thinking - and that if you don't understand something, you need to ask more questions.

When I worked for him, Mark was the Chief Economist for DOE. He'd already been a staffer for the White House Council of Economic Advisors and one of the Senate staffers who authored the big 1986 tax code rewrite. He's had a number of similar jobs since DOE. Today he's in charge of tax policy analysis at the U.S. Treasury Department.

Mark's resume is important only to convey to you the wattage of intelligence I was exposed to every day. For example, Mark once told me, "I love the tax code. It's like a big puzzle. Sometimes I just read different sections just to try to see how it all fits together." Then he pulled out a copy of the U.S. Tax Code and proceeded to break down some obscure section with me.

I try to carry Mark's modest, rigorous system of study to everything I do. On my best days, I am constantly assuming that there is more to know before I can really understand.

So, when Brij mentioned portfolio theory, Mark's training sent up all kinds of flags. Here's why:

Portfolio Theory is a finance term, that suggests that using mathematics, you can purchase a basket of stocks, bonds and other investments that reduces risk and thus produce a steady rate of return. So my managed portfolio ensures that when my automobile stock goes down in a recession, I have a brewery stock that goes up when the jobless drown out their sorrows.

Portfolio theory got a lot of attention in the boom-boom 1990's, encouraging business schools to produce and investment firms to hire "quant jocks" that could produce sophisticated mathematical models to choose investments. The whole math-based portfolio system came crashing down in 2007 when the American mortgage market melted down - largely because much of it was based on rickety, too-complex mathematical models with difficult to understand metrics of success.

The complex math behind the portfolios became black boxes that nobody, even the quant jocks, completely understood. So long as the bottom line stayed in the black, there were no problems. But when some things went bad - nobody knew how to fix it, and everything went bad.

The portfolio theory for websites is similar to that with finance. If Yahoo's video website isn't making much money today, Yahoo's entertainment news section will make up the difference. The different operations subsidize one another, supposedly ensuring a smooth rate of return.

But I see two logic flaws with website portfolios: First, unlike a basket of stocks, websites are not independent, dispassionate actors. A stock will go up or down, regardless of what the investor does. Website portfolios react specifically to the resources applied to them by their holding company.  Second, the subsidization process inherently disguises unprofitable, undesirable products.

Applying portfolio theory - and it's inherent subsidies - to websites also sounds suspiciously like the content model for a traditional metro daily. Some people read it for comics, some people read it for obits, some for the columns and there is an expected "bleed over" as readers jump from their favorite obits to the sports page now and then. Yet, nobody really knows which part of the newspaper really makes money and which part is the dog.

Here's hoping the big portfolio websites, like MSNBC.com, Yahoo! and AOL have much better reader metrics than most metro dailies.

So back to Patch and Brij the developer's comment, that most news sites are operating on portfolio theory. So, AOL's Patch doesn't need to be outright profitable, it just needs to channel a bunch of traffic to other AOL sites, and AOL sites can channel traffic to Patch. National advertisers can make just one buy, AOL, and they'll be guaranteed reach into hundreds of hyperlocal community news sites.

From AOL's pristine Virginia campus, this probably makes sense. But I just can't help but wonder: What's the purpose of creating a business with no plan to make it stand-alone profitable?

The fact that AOL could even consider such a thing is ominous news for my little hyperlocal site, the Center Square Journal, since Patch could easily outspend me, as well as channel in traffic from all kinds of other AOL sites. But it's also bad news for consumers, since there's nothing pushing Patch to build sites locals really want to read. After all, what's the profit motive if they're already getting traffic from other AOL sites?

Hunter's talent and ability has allowed me to almost totally focus on the business side of CSJ, which is nothing less or more than sales, sales, sales. No, we are not breaking even yet - and I'm not taking any money from the business either - but I am making inroads and learning a lot.

As I've been making my sales calls, a few thoughts about news media have crystallized for me.

1.     Sales work exposes the flaws and reveals the true value of a product.

This is a "duh" statement for anyone who has spent a day making sales calls (or knocked on doors for a political candidate) but it needs to be repeated since it is the bedrock of everything I've learned in the past month.

In the context of news media, I believe that most of the public dialogue about news has conducted by journalists and those with journalist tendencies. The result has been too much discussion about ethics and mission and not enough about product and what consumers - advertisers as well as readers - really want.

When you repeatedly talk with potential buyers of your product you experience a fiery crucible that reveals what's good about your product and what is unneeded. For CSJ I've learned the true value of local, local, local. Advertisers desperately want a channel to talk to the customer around the corner. We do that very well at CSJ. So now we focus on that and little else. You will never again see a story in CSJ that could reasonably appear in any other publication.

2.     News media is a product, not an art. It should not be romanticized.

Again, I think because journalists conduct most of the public dialogue about news media there are too many people who dreamily recall cigar-chomping men hammering out stories on manual typewriters while wearing bad hats. This is a dangerous habit. You should run from these people as if they have the plague.

To cite Bill Wyman again, newspapers and TV news have thrived on the predication that they provide direct access for advertisers. Those days are gone. Despite zillionaires buying the Chicago Sun-Times, Chicago Tribune, New York Times and Wall Street Journal with no clear business model, the rest of the news world needs to keep a clear focus on figuring out where the money is in this business.

This does not mean news media should become nothing but TMZ and Huffington Post. Those are excellent products - in the same way McDonald's hamburgers are an excellent product. Discussions about news media need to begin with the question, "Who are our customers and what can we charge them?" before anything else. Otherwise you invite large scale money hemorrhaging and eventual bankruptcy.

3.     Brand value is everything in news media success

Unlike a Mercedes-Benz or a McDonald's hamburger, news media is an intangible product that requires long-term consumer interaction to obtain a consistent identity. This is a tricky business that requires clear thinking and vigilance on the part of editors, publishers and sales staff to ensure readers and advertisers are getting the same value messages.

For instance, for CSJ I realized that while readers may value the local focus of our publication, so do advertisers - and so I made it part of my sales pitch. Hunter and I talk about what kind of stories we should be covering and I tell prospective advertisers about those decisions. I believe this conveys to them that if they advertise with us, they become part of a publication that provides clear value to the community - just as they do with their own products and services.

The brand value for CSJ readers and advertisers is reliable, high quality, hyperlocal news. This means clear writing, no opinion, hard news that stays strictly within our coverage boundaries. For instance Hunter and I recently discussed whether we should write about openly gay State Rep. Deb Mell's engagement announcement. In an age when most news consumers click through four or five publications a day as part of their news diet, we decided that while Rep. Mell represents a part of our coverage area, hers was a statewide story thoroughly covered elsewhere.

What else could we write about that day? The Food Network taping a show in a neighborhood bakery and a local alderman's reluctance to vote in favor of allowing Wal-Mart to expand in Chicago. Nobody else wrote about those things and we think we brought more value to our readers and our advertisers. Local news, local readers, local advertisers.

4.     Large media organizations are caught between a need to lower prices, a reluctance to eliminate outmoded, expensive media structures and unclear brands

This is important: While Hunter is drawing a salary from CSJ, he is far from getting rich. And I am far from getting paid. We are pouring in our own sweat equity with the hope that we'll eventually create something sustainable.

This is exactly what Steve Jobs and Steve Wozniak did with Apple. What Henry Ford did. Hunter and I are building a new business in the proverbial garage. It is cheap and we have no legacy expenses. It is a tremendous competitive advantage in the news business: We have no shareholders or lenders monitoring our revenues and it provides us with tremendous flexibility with our product and with pricing.

From what I hear from people inside large media organizations and from my own outside observation it seems that leaders at companies like the Chicago Sun Times, Chicago Tribune, the New York Times and the Wall Street Journal know they have not yet hit the floor for advertising prices. Yet they are also reluctant to really cut away at their companies - and they still have not identified their brands.

And no, I don't think news organizations have made the real cuts yet. ABC News' 25% layoffs this past week and plan to create "digital journalists" seems to be the right direction. A few years ago I read about Brazilian TV reporters who would carry small Digital-8 cameras, shoot their own footage, do their stand-ups using tripods and then edit the footage themselves. Yes, it probably looks less polished, but in the YouTube era I think we can expect news consumers to accept rough edits and poor framing in exchange for more news choice.

As for brands, I am puzzled why the New York Times and the Wall Street Journal are preparing to engage in a local news war. If is this where the advertising is, then Carlos Slim and Rupert Murdoch should invest their billions in tabloid newspapers and slim down the Times and Journal to staffs that can be sustained by their national coverage.

Locally, I can't for the life of me figure out what the Tribune and Sun-Times are supposed to be. A brawny city news tabloid for the Sun-Times? A publication of record with "higher end" reporting for the Tribune? Then why does the Sun-Times still pay Lynn Sweet? Why does the Tribune have a tabloid edition and a broadsheet? Pick a direction, slim it down. Go through the crucible.

5.     Revenue is the cheapest kind of money.

It's not a new saying, I know, but I most recently heard Linda Darragh, Director of Entrepreneurship Programs at University of Chicago say it at March's MIT Enterprise Forum here in Chicago. She said it at the end of moderating a discussion about the value of obtaining investors versus bootstrapping a new enterprise.

Almost every successful enterprise (biotech excepted) has had a period of bootstrapping where the concept was proven out by making sales. Successful sales can make an enterprise more attractive to investors - but it also alleviates entrepreneurs from the pressure of investor payback concerns.

And as I said in Point 1, going through the sales process helps you determine what works and what doesn't.

Those who want to create successful news media enterprises should begin not with the question, "Where do I get investor money?" but, "How am I going to make money?"

If you can't provide the answer to that question, no amount of money from the Knight Foundation, Carlos Slim or AOL.com is going to save you.

In a YouTube video they produced called "The Big Idea", Leitner and Timpone pitch directly to potential clients. Who are they? "They tend to be organizations that are best in class and nobody knows it or have a unique take on the marketplace and nobody knows it," said Leitner to me in a phone conversation. "Organizations that need the market place to understand the issue more fully, so the public would know why our client is best suited to help them."

I think of it as being more like "Guiding Light", the long-running, recently-cancelled soap opera that was wholly sponsored by and owned by Proctor and Gamble for over fifty years. As a sponsored television show, P&G paid ABC for the airtime and put on their show. ABC acted as a conduit for the show, whatever the content might be, because P&G paid for it and produced it themselves.

But "Light" was a soap opera and this is news.

I know Leitner professionally, and some months ago he invited me one afternoon to meet Timpone to help them hash out their idea. Mostly we talked about various ways news media companies attempt to make money from their products. The word "journalism" never came up in our conversation. Instead the discussion was entirely focused on how to actually make money from news.

For that reason, there are many who will have a problem with Private Label News. There's also an inherent conflict of interest problem - if I am paying for the news coverage, there's a good chance it might be slanted in my favor. Italy, whose billionaire Prime Minister, Silvio Berlusconi, owns most of his country's news media, is struggling with this problem in a big way, but Berlusconi doesn't seem to have problem with it.

Unlike Berlusconi's Mediaset, Private Label News does not aim to cover the big stories of the day. Leitner and Timpone imagine it will be interesting to those who want the smaller stories of the day to get coverage. As the "Big Idea" video suggests, it would cover industries that have lost their coverage as a result of shrinking news budgets.

"Timpone has been doing this for years on behalf of the U.S Chamber of Commerce," said Leitner. "They want good coverage of the state Attorney Generals offices, [because] AG's are a real battleground on the issues for tort reform debate. That's a real good example of turning the lights on in the gym so people can draw their own conclusions."

The news service Leitner refers to is Legalnewsline.com. It works just like any other wire service, and plenty of local newspapers quote from it. It is hard news, covering a beat that nobody else wants to or has the resources to cover. It has a few small advertisers. The "About Us" page doesn't draw any connection to the U.S. Chamber of Commerce.

Frankly, as a reader, I am not quite sure what to think of this approach. It seems impartial, and I know Leitner well enough to know he is not hiding anything from me. But the average reader would not entirely know who is behind legalnewswire.com - so wouldn't knowing that information change how their news is received?

But then again, think of all the talking points fed to Glenn Beck and Keith Olberman by less than impartial sources. All the effort expended by various PR agencies to influence reporters - the junkets, the personal conversations.

When I first started working in politics, I helped put on a "frozen chicken bowling" event with famed chef Wolfgang Puck in the U.S. Capitol, so Congressmen and the national press would learn how chicken categorized as "fresh" are actually frozen, according to USDA rules. The event was a smash hit, with stories in papers and TV stations across the country. Soon after, the USDA changed the rule on what constituted as "fresh" chicken.

The event was sponsored by smaller local chicken producers that didn't have the resources to freeze their chickens and ship them across the country. My lobbying firm cast it as consumer issue, but for the local producers, it was a money issue.

None of the TV stations mentioned the appetizers handed to them personally by Puck, or that they got to bowl chickens with famous Senators. That must have impacted them, right?

Private Label News is on to something. I am just not sure where it will take us.

But first a polemic: I am a strong believer in the long-tail theory. In that vein, I believe Hyperlocal is yet one more slice of the tail. It will never dominate news, but it will become a hard to ignore bit player, sort of like 12" club remix records.

There's a lot of talk about hyperlocal these days, because people are still assessing its ultimate value and trying to figure out how it fits in with the rest of the media mix. But in the end, I think the talk will die down and hyperlocal will become just one more part of everyone's daily media diet.

It appears that hyperlocal news is separating itself into three broad implementations I call:

• Aggregation;
• Augmentation; and
• Original Content

Aggregation is the easiest to implement, since it is merely grouping news stories by town, neighborhood or zip code. It is growing the fastest since a robust aggregation hyperlocal site merely needs a good news scraper/spider to pull original content from elsewhere. It also provides the least value. Quite a few Google Ad link farms are aggregation hyperlocal sites.

Examples: Outside.in, Patch.com

Original Content is on the other side of the extreme, where original content is generated by some mix of dedicated or freelance on-the-ground reporters. This is time-consuming and expensive since original reporting requires lots of legwork. It is also of high value to readers, since the site is providing content that is otherwise unavailable.

Examples: CenterSquareLedger.com, MyBallard.com, BaristaNet.com

Augmentation is not exactly a compromise between the two but it does take from both implementations. As the name suggests, it is always a part of some already existing news collection enterprise. The hyperlocal content can be either repurposed news from some existing publication, "directors' cut" versions of stories that didn't make it on TV or in print, a reporters' blog or other stories that were never intended to go on air or in print.

Examples: KOMOnews.com/communities, NY Times: The Local, Chicago Now

In my opinion, all of the above implementations qualify as "hyperlocal" news. There are many who would disagree with me, probably mostly those who run Original Content sites.

Also, while all of the above implementations use the name "hyperlocal", I think it is important to note that they are no more direct competitors than Digg.com and NYTimes.com are direct competitors.

To illustrate, let me compare hyperlocal local news to a more common example.

Aggregation = Aldi

Augmentation = Basic supermarket

Original Content = Boutique butcher shop

Aggregation is cheap and gives you no more value than the basics. Just like Aldi.

Augmentation is meant to be part of a broad offering of content. There's lots to choose from, but not all of it is targeted at your needs. Most of it is produced in a distant factory with little local flavor.

Original Content is made just for you, has lots of local flavor and is quirky. It doesn't always have the most professional methods, but you tend to look the other way because you feel like you have a personal relationship with the people making it.

I also believe that each of these implementations serve different groups of advertisers. Because of the audiences served by each implementation, it is hard for me to see how advertisers would benefit by moving between each group.

• Aggregation is almost a pure Google Ad play or for broad national ad campaigns.
• Augmentation would work well to extend national or regional ad campaigns looking to penetrate certain geographic areas.
• Original Content sites are mostly for regional or neighborhood-based advertisers.

I believe we should expect all of these implementations to grow and peacefully co-exist for some years to come. All are potential money-makers because all of them aim to serve a different audience and can carry different types of advertisers.

The Center Square Ledger has been officially publishing for three weeks now and I think we're starting to get the hang of things. After a frenetic publishing schedule to show new readers that we've got a lot going on, we slowed down a bit. The slower pace doesn't seem to have hurt our daily average readers, which has settled at about 350 a day.

This is a GREAT number from our perspective. Outside of flyering the neighborhood el stops on our first day and hitting the local blog scene, we've really been growing by word of mouth. 350 a day puts us just over 10k a month, which was the dream scenario Patrick and I had when we talked about our launch. This is a real number ­- five digits - that you can show people.

So while traffic is doing well and we seem to be publishing compelling content, revenues are not what we'd like.

The mystery to me has been why. I'm pretty sure our ad pricing is very competitive versus other outlets. I know we are considerably more targeted than other outlets. We have solid readership numbers.

Thus a conundrum: Why don't people want to advertise with the Ledger?

A few things come to mind:

• It's January/February and people don't want to spend
• The economy, stupid
• Web advertising is not physically tangible and thus perceived as less effective
• Local businesses generally don't advertise

The first two I can live with. The third requires salesmanship and buyer education. The fourth - well that's the one that gives me the shivers.

Door knocking does not intimidate me. As a political campaign worker I think I've probably knocked on tens of thousands of doors. Probably somewhere in six digits. People have siced their dogs on me, cursed at me, yelled, you name it. As a campaign worker, I know that I have to get through a certain number of doors in order to persuade a certain number of voters.

Eventually you learn a vibe. If you knock on enough doors, you get an intuitive sense if you have a good message. You can tell when, even if the voter doesn't sign on, you've got them thinking.

I've had that good vibe at about 25% of my stops. That's encouraging. But really, I think I need to be reaching out to more people, more often. Mailing postcards keeps coming to mind, but I'm not sure it is cost effective. Besides that, getting contact information is not easy, since no list of local businesses is readily available.  Could I buy one? Probably. But I'm not sure I'm ready to pony up the money considering we have a no cash flow operation.

What we have done is started thinking about ways we can make the Ledger more relevant to businesses. We've considered doing a regular print distribution, but the need to create a whole new operations process for that has held us back. We're looking at doing some special publications, but a few things need to be lined up before we can get that going. We're also thinking about running an ad special - along with coupons to prove the connection.

Clearly we need to get over a hump with local businesses, the question is how.

Before I go further, a disclaimer.

I love Apple products.  I'm on my fourth Mac and I own an iPhone. I was an Apple contract employee my senior year of college. But please leaven that with the fact that I also spent college doing repair work for PCs, VAX/VMS and Unix machines as well as Apple. I used to bleed Windows and hated Mac-heads, until I got sick of fixing the same recurring problems on my own PC. Then I saw why Apple products are great. They just work.

So, my religious conversion aside, here's the things that most impressed me with Apple's demo today:

• 150 million iTunes accounts - That's 150 million people who are have already put their credit cards into Apple's computers. An incredible draw for anyone selling anything.
• 75 million iPhone owners - Like Steve Jobs said, those are people who already know how to use (and like) the iPhone interface. Because so many people already have a high likelihood of purchasing the new iPad, content providers can be sure there will be readers on this platform soon.
• Over 3 billion Apps sold through iTunes - Again, lots of people like to buy stuff through Apple. Not through Amazon. Or B&N or what ever proprietary system devised by Google or Palm.
• Books sold on iTunes will use ePub standard - If you've coded HTML, this open standard is easy to understand. Anyone can create content - text, video or audio and publish it immediately.
• Five major book titles are behind the launch - It's not as big as when four big record labels got behind iTunes, the book market is more fragmented, but it means lots of new content will be hitting iTunes' virtual shelves.

Then, some other things we didn't see in the demo:

• McGraw Hill CEO Statement - Terry McGraw's early leak on iPad yesterday just proves that one of the world's biggest textbook publishers is taking iPad seriously. Imagine if you bought your college textbooks on iPad? Remember what a pain selling your books were? Imagine the money saved by eliminating print.
• Sports Illustrated's "think piece" - Watch this amazing video. SI released it in December and it shows not just how forward thinking SI editors are, but how much cooler SI could be on the iPad rather than print. If you could subscribe to this today, would you buy an iPad? I think I have a sports nut brother-in-law that might. (He does not like computers, BTW.)
• iPhone OS 3.0 In App Purchase API - Bear with me here on the geek speak. Apple announced this last year. It basically means that you don't have to run over to iTunes to buy stuff. From Apple PR, "you can create a subscription magazine app where you ask for payment on a monthly, yearly or periodic basis of your choice...Build a general-purpose city travel guide app and let your customers pick the city guides they want."

Are you excited yet?  It gets better. Although the iPad won't hit the street for two months, you can download the iPad developer kit today and start making your new online magazine/newspaper/hybrid-whatever. Anyone. Even you.

The hybrid-whatever ideas are what excites me the most. With each new information technology paradigm - and that's what the iPad is - we've learned that new technologies bring new uses and new ways of seeing things. We should expect future news products to be a blend of newspaper/tv/travel guide/magazine/blog/etc. Everything will blend. 

Don't try to mash this into your current understanding of things.  It'll be totally different.

The most important lessons of the first week:

1. 
   Leg work pays off. We hit every El and Metra stop for our launch day's morning commute. It was cold, dark and more than half of the people were rude. But many others took our flyers - and we saw an immediate increase in traffic that night. This is yet another case of, "If it was easy, everyone would be doing it.
2. Tell everyone you know. Even in a metro area as big as Chicago you'd be surprised how interwoven we are. For instance, it turns out one of the close friends of my tenants works for a local chamber of commerce. By the time I called her for help, she had already heard about the Ledger.
3. Join the local chamber of commerce. We live in an isolating world and that's made worse for me by producing a product that's delivered electronically. Opportunities to gather and talk to other like-minded people are important. The local chambers of commerce provide those opportunities, and at the very least I emotionally benefit from those interpersonal relationships.
4. Keep working and be patient. At the Lincoln Square Chamber meeting I was talking to Gunther Kempf, one of the two brothers that founded the Chicago Brauhaus in 1963. After he finished boasting about how his annual Oktoberfests are jam packed, I asked him how things were when he first started. "Well, it was hard, of course. We had lots of nights when the place was empty, and we struggled. But we kept going, and things got better." When you look at the success of a long-running business, it often seems impossible to replicate. But then, how do you suppose the successful people got started?
5. Stay positive. It's easy to be positive about places like Lincoln Square and Northcenter. They are great places to live and work. But I find that humans tend to be sourpusses. As a result of our generally positive (but not whitewashing) coverage this week, we've received at least half a dozen messages and comments from readers thanking us for our positive outlook. I'm convinced that's an element of our future success. And it certainly makes things more fun.

Next week we're going to start really beating the bushes for advertisers. That should be an interesting process - and I am sure we'll learn lots about what we should and should not be doing.

Dang this is fun.