Time Warner makes a small bet on hyperlocal news sites in Patch

We’re starting to see some dollars flowing into online-only news startups.

Patch, operator of six local sites in New Jersey, was purchased last week by Time Warner. Forbes reported the purchase price to be about $10 million.

patchPatch has announced plans for three more sites, in Connecticut, and clearly it has its sights set on many more. In an unrelated transaction, Time Warner is also buying a Boston-based events-based site called Going.

Earlier this year, Dallas-Fort Worth local site Pegasus News sold to Gap Communications, reputedly for $1.5 million. (The seller was Fisher Communications, which had bought Pegasus in 2007.)

Just as we’re seeing signs here and there that the financial logjam that created this recession is beginning to loosen up, perhaps transactions of this kind are signs that smart money (or at least money that thinks it’s smart) is putting some value on local news and information.

In the scheme of things, $10 million is not a big valuation, even in this post-recessionary epoch we’re embarking upon. And, with its limited geographic footprint, Pegasus is a long way from proving the fabled “scalability” so desirable in world of Web startups.

To begin with, Patch will have to start generating some revenue from advertising, which is not visible on its sites at this point. In fact, the “advertise” link on Patch goes to a pretty rudimentary information page suggesting a choice between banner ads and “self-service” ads.

Continue reading this post at Nieman Journalism Lab.