Is This How It Ends for Newspapers?

Your next local beat reporter might be an algorithm.

This week, General Electric's (NYSE: GE  ) NBC unit said it had built 650 neighborhood news sites using technology from a social media start-up called Outside.in. Algorithms scan content from blogs, Twitter, and elsewhere on the Web and then tag findings with GPS data to create a news feed that's tailored for where you are at any given moment, right down to the street corner.

Nine markets will host the service initially, including New York, Los Angeles, and Chicago. And that's likely to be troubling for ink-stained old media such as New York Times (NYSE: NYT  ) and McClatchy (NYSE: MNI  ) , and local news specialists such as Lee Enterprises, says Outside.in CEO Mark Josephson.

"Their valuations are incredibly low and it's because they're moving in the wrong direction, in terms of strategy," Josephson said in an interview earlier this week.

The rise of the curators
So what's the right direction? "I talk with a lot of newspapers and they know that they need to get more local," Josephson said. He's talking about news breaking hundreds of feet away from you, in your neighborhood.

I can see the merit to that. But is sourcing via blogs and social media really a good idea? Sure. Twitter is a terrific tool and could even become a crude wire service. And user-generated content makes news all the time. NBC's first shots of the recent "Miracle on the Hudson," in which a pilot safely guided a US Airways jet to an emergency water landing off of Manhattan, were supplied by a viewer, said Brian Buchwald, NBC's senior vice president of local integrated media, in a recent interview.

Outside.in's emergence comes at an interesting time. Earlier today, Gannett (NYSE: GCI  ) said that fourth-quarter profit fell 36% on lower ad revenue. And those results could include as much as $5.2 billion in asset writedowns. New York Times Co. Wednesday said that earnings fell 48% during Q4. (Though, ironically, that beat analyst estimates.)

Josephson is quick to point out that his firm is partnering with newspapers. He believes they can use technology to improve profits but, as a writer and former reporter, I find his plan chilling. Josephson envisions papers keeping a skeleton staff of, say, three to be feed "curators," as he calls them, because Outside.in aggregates by locale rather importance. Adding a human element would insure that the most important hyperlocal news led each feed.

(Shivers.)

I can't argue with the logic, though. We know from The Huffington Post that content aggregation works. And we know from Google (Nasdaq: GOOG  ) that real-time, hyper-targeted advertising works. Outside.in is poised to provide both.

Prepare yourself, Fool. The local media revolution will be automated.

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Fool contributor Tim Beyers had stock and options positions in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy saw the revolution coming 15 years ago.


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