Lorren Elkins and Susan Kelly Panian have left American Town Networks, a pioneering social network that I occasionally consulted with. The site is now in maintenance mode with a reduced staff, awaiting next steps. The site had been the default town site for AOL Local, and continues to provide local sites for 168 communities in the northeast and Michigan.
During its six years of operation, American Towns has been especially noteworthy for two things. It relied initially on part-time efforts from local women, mostly mothers, to sell local ads and maintain local information. I liked the model, but the economics never worked, and it was forced to become more of a standard, automated community site. The site was also noteworthy in forming a 2004 deal with Time Warner Cable on Staten Island, where the site was sponsored by local video ads for small business, such as plumbers.
American Towns was founded by Michael Kelly, a longtime Time Warner executive. In between stints at the company, he saw a gaping hole in suburban news, “hyperlocal” coverage. After Kelly was recruited to head AOL Media Networks in 2002, the reins of the company were turned over to Susan Kelly Panian, an experienced retail executive (and Mike’s sister). In late 2005, Susan was joined at the company’s helm by Lorren Elkins, the former CEO of PowerOne Media, who had been seeking new sources of funding and strategic partnerships.
No surprise here. Hard to sell online advertising anywhere, let alone in a local market, with part-time people, with the overhead of commissions on top of that. The dot come bubble bursted 6 years ago. Local ads sell better, but not good enough to subsidize anyone’s income.
Ted Buerger, a co-founder at American Town Networks, wrote to tell me not to jump to conclusions vis a vis the departure of two key execs. American Towns is healthy. revising its business plan, and remains a major contender in the social network space, he said. He also said that American Towns has penetration of 50 percent in his hometown, Pleasantville, N.Y.
I don’t doubt Ted’s veracity, but I’d like to know about the methodology for coming up with that figure. Most social networks are lucky to get above 5 percent. Here is the text of most of Ted’s note.
“Following is an update of the last few months:
1) On February 15, 2006, the AmericanTowns board turned over leadership of the company to Ed Panian and Jim Maglione, who had led the technology and community efforts of the company for the last several years.
2) Operating with the streamlined authority of a development stage company and employing technology and processes they had refined in the previous $1 million financing round, Panian and Maglione have in less than three months:
a. Launched 2 new regions (New Haven and Hartford) with a total of 56 towns, increasing AmericanTowns footprint by over 60% to 140 towns in 5 states;
b. Revamped content and processes for the existing 84 towns, with a traffic increase of 30% in the last three months and an increase in revenue from Google AdSense of over 45%.
c. Created a technology plan for a new technology platform and user interface with even stronger “social network” components, and a business plan to bring AmericanTowns to virtually every community in the nation by year-end.
3) In a meeting of April 13, 2006, the American Towns board fully endorsed this plan and a new financing round, and made available the funds necessary to support it. (The round closed effective May 1, funded entirely from current investors.)
4) All of the above was possible because of the founding vision of AmericanTowns, its dedication to connecting communities, and the hard work of Panian, Maglione and others testing different approaches in building effective community websites, including:
a. AmericanTowns’ first community site, in Pleasantville NY, is now believed to be the most successful community website in the country, with over 50% household penetration and a total of more than 2 visits per month for every resident household.
b. AmericanTowns’ MyStatenIsland.com, a partnership with Time Warner Cable, has proven that citizen-generated content can be successfully achieved in communities of up to 500,000. (Virtually all content is driven by the community)
c. Ten other AmericanTowns’ community websites, with enriched content and community building tools, have market penetration averaging in excess of 20% of households. (Management will be including these capabilities in all AmericanTowns sites as part of its national roll-out.)
Ed, Jim and the team still have much to do. But the best news about the above is that AmericanTowns now has in place a business and financial plan that, during 2006-2007, brings its organized but citizen-driven local websites to every town across the nation.
You of course have my permission to share whatever you think will be useful to your readers. I should also mention that, as part of our national launch, we wil be interested in working with others in this space – building on one of your thoughts, there is no need to duplicate what others are doing if we can better serve local communities by working together. “
Ted Buerger wrote in today (May 27) to provide additional information on ATN’s claim to reach 50 percent of residents in Pleasantville. My gut tells me that if we stood at the commuter station in Pleasantville and did a survey, fewer than 10 percent would say they use ATN. But here’s Ted’s explanation…….
“I also owe you a response on the traffic levels in the AmericanTowns site in Pleasantville. Yes they (and other towns’ data) are very high. But this is because the sites are being used as the central on-line communication point in the community, so they should be high.
So yes, the traffic levels described have been verified by both Web trends and the Google system, data we show to investors. I’ll downplay the levels a bit by noting that “unique visitors” are actually “unique computers”; so some of our visitors are visiting from work and from home, so the system counts them twice. But the levels are still extraordianry by any measure.
The data is also verified by looking at the site: Go to the calendar, and click on the last month; you’ll see a wealth of events posted by community organizations. You’ll see similar content in the news and announcements. (Did someone say “citizen-generated media”?) When community organizations use the site as the way to connect with the community, you’re going to get this kind of traffic. Think “MySpace for groups”.
We have several sites that demonstrate this phenomenon, which is enhanced by the organization and robustness of other content on the site. But the most remarkable to me remains the American Towns site in Staten Island, a community of 450,000. Click on their calendar and you’ll be amazed a the number of event postings made by organizations themselves.
I am not saying this is easy, because there are so many pieces to it. But I do believe that, in five years, every town will have an online point of community connection like AmericanTowns provides. In many ways, we are just riding the wave; the underlying force – as you have said for some time – is irresistible.”