The cuts were an effort to reach profitability in a division that has failed to gain traction with consumers and has suffered huge losses financially. Patch’s troubles have been a source of frustration for AOL’s chief executive, Tim Armstrong, who helped found the service in 2007 when he was an executive at Google. Shortly after arriving at AOL in 2009, Mr. Armstrong had the company acquire Patch.
Patch’s idea is to provide an online network of local news sites, filling the gap in coverage left by newspapers that have either closed or greatly scaled back their investment in reporting in response to declines in advertising revenue.
The company said it had analyzed the performance of the approximately 900 Patch sites and identified about 60 percent as high-performing ones that should remain intact. AOL said it would look for partners to operate 20 percent of the sites that are considered viable, and it would close or consolidate the rest. At its current staffing, Patch has more than 1,000 employees.
“Patch’s strategy will be to focus resources against core sites and partner in sites that need additional resources,” AOL said in a statement. “Additionally, there are sites that we will be consolidating or closing.”
The statement added: “Patch has become an important brand across many towns in America. The Patch team across the country has served and will continue to serve communities with journalism and technology platforms. Unfortunately, with these changes we are announcing today, we will be reducing a substantial number of Patch positions.”
Some investors, skeptical that Patch can succeed, have urged AOL to dump the service altogether. The company has told analysts that it expects Patch to be profitable by the fourth quarter of this year.
Mr. Armstrong has said he is confident in Patch’s potential. The company says that the service has 3.5 million newsletter subscribers and 4.7 million registered users, increases of 138 percent and 181 percent in a year-over-year comparison. It says that between April and June, Patch had a 10 percent increase in traffic compared with the same period in 2012.
Patch’s troubles were the backdrop for an embarrassing episode for Mr. Armstrong last week. During a conference call with Patch employees, he became angry with an executive who was videotaping the proceedings and fired him on the spot, as employees listened. He apologized on Tuesday for the manner of the firing.
Article source: http://www.nytimes.com/2013/08/17/business/media/aol-to-cut-up-to-500-jobs-at-local-news-service.html?partner=rss&emc=rss
DealBook: Thomas Weisel, Banker Behind Armstrong, Says He Was Unaware of Doping
The financier Thomas Weisel recently boxed up the bright-yellow cycling jerseys that lined an entire wall of his office, which overlooks San Francisco’s harbor. They were gifts from Lance Armstrong, a longtime friend whom Mr. Weisel had bankrolled through seven Tour de France wins.
The evidence that Mr. Armstrong repeatedly used performance-enhancing drugs, which culminated in a televised confession with Oprah Winfrey on Thursday night, has destroyed his career, and now threatens to blacken the reputation of Mr. Weisel.
Mr. Weisel, 71, the founder of the cycling team that is at the center of the sport’s biggest doping scandal, is accused of wrongdoing in a federal whistle-blower suit that was leaked publicly this week. The suit, filed by Floyd Landis, a former teammate of Mr. Armstrong’s who has admitted to doping, claims that Mr. Weisel and other team officials “engaged in a systematic program of doping.” Mr. Weisel has also been linked to a $500,000 payment aimed at silencing a drug test Mr. Armstrong purportedly failed in the late 1990s.
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Despite several years of accusations of rampant doping on the team, Mr. Weisel, in his first public comments on the matter, said those accusations were false.
“I did not know until very recently that Lance Armstrong had engaged in doping while riding for the team,” he said. “Any allegation that I was aware of or condoned or supported doping by any team rider is false.”
Mr. Weisel said the credibility of the people interviewed in an October report by the United States Anti-Doping Agency, which described Mr. Armstrong’s doping activities, persuaded him that the cyclist had used performance-enhancing drugs. He said he had heard rumors of drug abuse, but dismissed them because the cyclists were passing the drug tests. He never personally saw an instance of doping on the team, he said.
Mr. Weisel is a legend in investment banking, where attention to detail can make — or break — a deal. Now it is clear that Mr. Armstrong and other cyclists involved in Tailwind Sports, the holding company for the United States Postal Service cycling team and an organization that Mr. Weisel led as chairman, were using performance-enhancing drugs right under his nose. If he did not know about the team’s win-at-all costs approach, he should have, friends and rivals alike say.
Since October, when the antidoping report was issued, Mr. Weisel has found himself in the middle of a media storm. The report did not name Mr. Weisel, but did say that a “small army of enablers, including doping doctors, drug smugglers, and others within and outside the sport and on his team” helped Mr. Armstrong.
Mr. Armstrong, in hopes of mitigating his lifetime ban from Olympic sports, might implicate Mr. Weisel and other team owners, according to people briefed on the case. So far, Mr. Weisel said, neither Mr. Armstrong nor any rider on the team has said that he discussed doping with Mr. Weisel or that he witnessed Mr. Weisel participate in or observe any act of doping.
Mr. Weisel said he was cooperating with federal authorities and has testified that he knew nothing of Mr. Armstrong’s activities. About two years ago, he turned over pages of documents related to Tailwind’s activities. “I am as dismayed as everyone else to see a sport that I love and have supported scandalized by this inexcusable behavior,” he said.
Mr. Weisel is best known on Wall Street for the technology companies he has advised, like Yahoo, Sunglass Hut and Amgen. In the 1990s, he ran Montgomery Securities, eventually selling it for more than $1 billion. He then started his own firm, which struggled to survive in the volatile world of technology banking. It was eventually sold to Stifel Nicolaus, where he is now a co-chairman.
While many bankers fill their offices with tombstones, paperweight-like trinkets that commemorate the closing of a big deal, Mr. Weisel has always favored sports paraphernalia.
His passion for sports is no secret; he even liked to hire athletes to work at his firm. Mr. Weisel, who was raised in Milwaukee, is a former competitive speed skater and helped the troubled United States Ski Team get back on its feet.
An avid cyclist, Mr. Weisel started Montgomery Sports, his first cycling team, in the late 1980s. Mr. Armstrong was an early rider for one of its teams. The idea was to develop a top-flight professional United States cycling team. The team went through a number of corporate sponsors before the Postal Service signed on in the mid-1990s. According to a biography of Mr. Weisel, “Capital Instincts: Life as an Entrepreneur, Financier and Athlete,” Mr. Weisel invested over $5 million in the early days.
On Wall Street, people knew never to try to schedule a meeting with Mr. Weisel in July. His calendar was blocked because he was almost always in Europe for the Tour de France. He accompanied Mr. Armstrong for each of his consecutive victories between 1999 and 2005. Mr. Weisel said he was typically on the course for several days and would meet the team at the finish line in Paris.
“If not for Thom’s generosity and vision, there would be no Tour de France titles behind my name,” Mr. Armstrong wrote in the forward to Mr. Weisel’s book. Mr. Weisel, he wrote, did not “meddle with the team’s strategy or training,” but was instead a “spectator with the best seat in the house.”
“He’ll pull up alongside me, hanging out of the car, beating the side of the car, just screaming at the top of his lungs. That’s his bliss. I love it when he is there.”
In the wake of the antidoping report, Mr. Armstrong was stripped of his Tour de France titles. On one Tour, in 1999, the team masseuse, Emma O’Reilly, has said, according to published reports, that she witnessed Mr. Weisel huddling with Mr. Armstrong after a report that the cyclist had tested positive for a banned substance. Mr. Weisel was frantic about what to do, she said. Mr. Weisel said he did not have “any recollection” of the incident to which Ms. O’Reilly was referring.
Mr. Weisel said he never discussed doping with Mr. Armstrong because the cyclist was constantly asked about the subject, was tested frequently and had denied doping countless times. “I believed him,” Mr. Weisel said.
Mr. Landis’ suit contends that Mr. Weisel’s financial ties and influence over a governing body of cycling “helped make it possible for the U.S.P.S. Team to carry on the extensive program of systematic doping.” The suit does not single out Mr. Weisel as being present in any of the many instances of blood transfusions and use or distribution of performance-enhancing drugs that Mr. Landis recounts from his years on the team, from 2002 to 2004.
Mr. Weisel removed Mr. Armstrong’s jersey’s from his office after reading the antidoping report. He said that he had not spoken to Mr. Armstrong since the report, and that he had not been close to Mr. Armstrong for some time. “I’m disappointed,” Mr. Weisel said. “I believed that Mr. Armstrong and these other riders had not doped while on the team, as Mr. Armstrong had consistently and publicly stated.”
Article source: http://dealbook.nytimes.com/2013/01/17/thomas-weisel-banker-behind-armstrong-says-he-was-unaware-of-doping/?partner=rss&emc=rss