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When Topix first came on to the scene in 2003, it primarily crawled local news. These days, the 30-person company has largely remade itself into more of a local portal, especially for smaller markets. It still isn’t profitable, but CEO Chris Tolles says it delivers a lot of upside to its primary owners: Gannett, Tribune and McClatchy.

The company largely started its evolution a couple of years ago with the launch of user comments and user-submitted news, both of which complement the news crawl. As it has gained users and frequency, the company has also added such features as Yellow Pages and classifieds.

The portal strategy is certainly different from simply powering the local news crawl for newspaper sites. In fact, just 30 percent of its traffic currently comes from partners, says Tolles. (Besides the owner newspaper companies, other partners include MediaNews Group, ESPN, Sprint’s WiMax portal, CNN and vertical sites such as Trulia, Eventful and Simply Hired.) “We are the only game in town if you want to license local news,” he says.

Most of the action, however, is centered on the destination site, despite some false starts. “Early on, we put out a lot of things around local that didn’t work,” concedes Tolles. “We didn’t have enough traffic. But it makes more sense with 100 million page views. Our traffic has quadrupled, and the experience is better.”

Moving into marketplaces — Yellow Pages and classifieds — has been an especially logical move. It has been largely spearheaded by Tolles and former InfoUSA and Yahoo Local executive Dave Galvan, who is Topix’s VP of business development.

The classified part of the site has actually been up for quite a while, says Tolles. “It is not a major portion of what we are doing; it is a competitive market. But it is part of a larger effort” to support the site’s local power.

Meanwhile, Yellow Pages, powered by listings from InfoUSA, has been up for six months. “We’ve got millions of page views, and it is growing 15 percent, month to month,” says Tolles. Still, expectations for the YP product are downplayed. Yellow Pages in itself “is not a major destination,” he says. But it is unique in providing listings in a local context. “Nobody has our reach on the Net. We have engagement from 20,000 cities and towns every month.”

The site also has had some success localizing national advertisers, including political advertising. “We were the No. 1 site for McCain in June” via Google’s ad sales, says Tolles.

“Local local” political advertising also has some promise, given Topix’s ZIP code orientation. But it really hasn’t amounted to much yet. “There is huge commentary around sheriff races, things like that. But there is not a lot of local advertising from those guys, or from statewide races either.”

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