Analyst: AOL Spends $160 Million on Patch

According to an analyst, AOL is spending a lot of money – about $160 million – to keep its local news network Patch, afloat. That breaks down to about $150,000 per site annually. And that is way too much money for a group of sites that seem to be spinning their wheels. The problem, according to The Wall Street Journal, is that no one is visiting AOL’s sites anymore:

Traffic to AOL sites rose just 3% in June, according to comScore Inc., with increases to its newer properties, such as the Huffington Post and local Patch websites, barely making up for steep declines at its legacy sites, such as the home page and mapping site MapQuest.

MapQuest! Ah, memories. The last time we used MapQuest Steve Jobs had just started talking about this thing called an “iPod” and we actually considered purchasing an album by Crazy Town.

Speaking of crazy, something is going to have to give for AOL and Patch, if these figures are correct. As Robert Peck, managing partner at Quasar Capital Advisors, told the Journal, “If you sell lemonade for $1 and it costs $800 to make it, that’s not a great business.”