The virtual town square is getting crowded. As the NYT and WaPo report today, across the U.S.,citizen bloggers and entrepreneurs—some with deep pockets—are creating a growing number of town-specific, and even neighborhood-specific, sites where the public can read and contribute items that might be considered too small or too fleeting for weekly newspapers. The NYT profiles Fairfield, Conn.-based AmericanTowns, which claims to cover half the country’s municipalities, and WestportNow.com, which is more of a citizen journalism site that boasts site traffic of up to 7,000 daily visitors.
The WaPo story focuses on the travails of Vienna,Va.-based virtual town square hub Backfence, which we’ve been covering here. Although it started with promise a little over a year ago, Backfence has lost three executives, including its co-founder, and is struggling to reinvent its business model to stay afloat. Aside from difficulty tapping local advertisers, Frank Bonsal, one of Backfence’s angel investors, said arguments between backers and founders have “destroyed the company.” As Mark Potts, a co-founder who has returned as Backfence’s interim head, told us two weeks ago, the company plans to focus on getting back on track on sales and community development efforts.
Examining the start-up woes of grassroots journalism sites, Robert Niles, editor of USC Annenberg’s Online Journalism Review, advises, “The most successful and profitable community websites demand every bit as much work as goes into producing a daily newspaper of similar income. Readers do not long contribute smart copy to a website for free without substantial encouragement, guidance and affirmation. A site template and comment algorithm won’t provide that. A community website needs people, leaders who can find the most knowledgeable sources, ask the right questions and elicit thoughtful responses.”
Some of the experiments do seem promising. But until someone can figure out how to manage the enormous financial challenges—namely, cultivating enough small retailers willing to choose the web over the local pennysaver, sheer survival will qualify as big success for most. 
Related:
—Welcome To Placeblogger –- Now Keep Going
—CEO Leaves Local News & Community Startup Backfence; Other Layoffs
—Backfence.com Launches, Latest Hyperlocal Public Media Effort
—Local News Venture Backfence Gets $3 Million Funding
—Backfence Aquires Bayosphere