Hyper local news and social media site EveryBlock.com has shut down, the company said Thursday.
"Though EveryBlock has been able to build an engaged community over the years, we're faced with the decision to wrap things up," a item on the EveryBlock.com blog said.
The posting said Everyblock faced increasing challenges to build a profitable business. It had 10 employees, including President Brian Addison.
The company was founded in 2007 by Naperville native Adrian Holovaty and acquired by MSNBC.com in 2009. NBC News acquired MSNBC.com last year.
NBC News Chief Digital Officer Vivian Schiller said EveryBlock's financial losses "were considerable," although she declined to offer specific financial results.
"Hyper local is a very tough business. This isn't about anything being a failure, but more about our need to stay focused on the strengths of NBC News' digital portfolio," she added in an email.
Schiller said the company looked for various options for EveryBlock, such as a sale, but none of the options ended up being viable.
"EveryBlock was among the more innovative and ambitious journalism projects at a time when journalism desperately needed innovation and ambition. RIP," Holovaty wrote Thursday in a blog post on his site Holovaty.com.
Holovaty wrote that he believes EveryBlock, founded with the help of a $1.1 million grant from the John S. and James L. Knight Foundation, was a successful attempt to push innovation in newspapers and journalism.
"It was a great site, beautifully designed and lovingly crafted. It made a difference for people, particularly in Chicago," he wrote.
Holovaty left the site in August to pursue other interests.
Hyper local sites in general have surged in popularity in recent years, but with the success came an explosion of competitors, making generating revenue extremely difficult. In 2007, about 1 in 8 Americans lived in a town with a local blog, according to data from Placeblogger.com, which indexes local weblogs. Today, more than half do.
Still, limited revenue streams make for a shaky future.
"Most of these companies have the structural integrity of a wet cardboard box," said Lisa Williams, Placeblogger's founder and CEO.
Williams said the sudden shutdown of EveryBlock and others like highlights the boom-and-bust cycles in technology businesses, but also underscores the impatience of the big companies who acquire them.
"Whenever someone invests in you there's always a ticking clock attached to money," she said. "It's a very high-turn business. You have to either get big or get out."
In the Chicago area, hyper local news has proved itself to be a competitive and challenging niche, with both local and out-of-town organizations trying to gain traction.
The Chicago News Cooperative, which had a publishing deal with the New York Times, closed down in 2012 after a little more than two years. AOL's Patch has had a rough time, with one investor estimating last year that the national collection of hyperlocal sites, including dozens in Illinois, lost $147 million in 2011.
Tribune Co. partnered last year with Journatic, a Chicago-based company, to provide hyperlocal content for the Chicago Tribune's TribLocal. Tribune Co. then suspended Journatic over ethical lapses, and after a lengthy investigation resumed limited use of Journatic with added safeguards.
The Chicago Tribune also at one time hosted a search box on its web site that directed readers to EveryBlock data.
sbomkamp@tribune.com | Twitter: @SamWillTravel
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