I'm sitting in a class at NYU listening to a discussion about local blogging and the NY Times. Rather than speak up to the room, I thought I'd just write a blog post that explains where I think the money is in local.
First, where I don't think it is -- getting ad dollars from the local pizza parlor or stationery store. There may be nickels and dimes there, but the mega-dollars come from slicing the pie differently from the geographic way people are slicing local news up now.
Instead, pick the businesses that generate billions of dollars in the local economy that are information-based, where the information currently being supplied is inadequate. That's not restaurants and entertainment.
When I started looking for an apartment in Manhattan, one of my requirements was FIOS. I naively assumed I'd be able to get it because my mother had it in Queens. Manhattan is a bigger, more lucrative market than Queens, so of course Verizon has it covered. Turns out, for a variety of reasons, it's not true. There's almost no FIOS in Manhattan. But if you went to the Verizon site you'd never find that out unless you punched in every address in Manhattan and found out that very few return positive.
Business on the Internet is driven by finding places where dollars are spent, where people need lots of good information to make a decision they're going to spend a lot of money on. Become the place where people go for that information and then sell space on your site to businesses that sell products and services in that space.