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More than 73 hyperlocalites showed up at USC’s Annenberg School for Communications and Journalism last Friday Dec. 4 to discuss not only hyperlocal journalism but sustainable hyperlocal commerce as well.

The meeting, “Entrepreneurship and the Community Web,” was convened by Annenberg Executive in Residence David Westphal (and captured on Video here).  From what I could tell, it was the largest California summit for hyperlocal, and brought together what U.S. Local Media News Network President Chris Jennewein called “all the optimism in journalism.”

Besides U.S. Local Media News Net, hyperlocal and regional sites represented at the summit included such pioneering sites as, Oakland Local, Sacramento Press, BargainBabe LA, Coastsider, Edhat, SantaCruzwire, EmpireReport, Blogdowntown and

I had the privilege of setting the stage early in the program. In my comments, I noted that the local online industry has taken some interest in the success of hyperlocal sites, and it isn’t entirely altruistic — hyperlocal sites can provide larger media and directory sites and networks with content, search engine positioning and additional outlets for targeted advertising.

But hyperlocal sites aren’t waiting to be aggregated by others. Many are developing self- sustaining models on their own, with some experimenting with various ad formats, including banners, text ads, directories, classifieds, local/lifestyle ads and cross-overs into print and video products as well.

Industry consultant Elizabeth Osder complained that such a bifurcation into different ad products is all too academic. “It’s all one database,” with advertisers assembling their own custom promotional packages, she noted. That’s probably right.

I additionally noted that sites using self-serve tools such as adReady and PaperG are helping hyperlocal sites make revenues without having to develop and manage a sales force. Several hyperlocal sites that work with PaperG, for instance, made “five figures” last year from using PaperG’s self-serve classified and display tools, according to site founder Victor Wong in a conversation I had with him aside from the conference.

Looking forward, hyperlocal sites are especially well positioned to leverage relationships with local businesses to provide a wide range of services that go beyond advertising, including Web site development, reputation management, search engine optimization and “street team” support representing advertisers at fairs, concerts and other events.

One model advanced at the conference is to have hyperlocal sites band together and sell network advertising — a concept promoted by SacPress Cofounder Ben Ifeld. Like the five-partner Next Door Media network in Seattle, SacPress is in the process of tying together 18 local sites in the Sacramento area that cumultatively bring in a half million monthly visitors. The Sacramento area boasts “a vibrant local media ecosystem, with some sites focusing on entertainment,” noted Ifeld. “Some have a sales force, some don’t. A couple of people are Web developers and building things for their neighborhoods.”

Especially eyed by Ifeld are regional advertisers currently paying up to $5,000 for a glossy ads in a regional magazine. His Adify-powered network provides better reach with better context than the magazine, he said.  Members of the network can take those riches and divvy them up.

Ifeld also said the ad network is only the first stage of a collaboration among the sites. “Maybe we’d share content; maybe we’d collectively bargain with larger media companies to sell content or set up a single sign on or run co-promotions. But first we have to get together in a room.”

Some sites at the meeting see better opportunities (i.e., more money) from taking a nonprofit route. L.A.’s first rate Downtown Blog, for instance, said after much internal debate, it decided to set up as a nonprofit 501 C.

Just because it won’t set an ad rate doesn’t mean that it doesn’t want to work with local SMBs, however. But the site would rather work with such businesses on a contribution basis. In fact, it has made SMB support an integral part of the site, providing them with directory listings, home page Tweets and weekly e-mail.

“We just want to serve the people who live and work downtown, said site founder Eric Richardson, who had been at it since 2004. “Philosophically, I like being able to say we are nonprofit community project. We can target foundations and people [are] much more likely to support 501c than for-profit business.”

To Richardson, in fact, it isn’t especially appealing to partner up with content hungry sites such as The Huffington Post LA or perhaps, While they’d drive up traffic counts, their audiences may be broader and less focused than is desired. “We don’t just want to throw content out there,” he said.

Another site, Edhat of Santa Barbara, hopes to make a go of it largely from voluntary paid subscriptions. Founder Peter Sklar noted that 450 of its 7,500 e-newsletter subs have agreed to pay $1 per week — not enough to get anyone rich, but enough to continue to add resources. The site has greatly benefited from a shift in community support from the community’s troubled newspaper, he noted.

Other sites at the conference, however, frankly acknowledged that they are more oriented toward the journalism and really haven’t focused on self-sustaining models. Such labors of love will need to evolve to keep going for the long term. A major interest is to make sure that the writers can get paid for their work. Many rely on all volunteer staffs today.

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