The New York Times reports on AOL’s hyperlocal news effort with Patch. AOL is bullish — but I’m not sure Patch will ultimately pay off enough to make it worth the company’s while. That’s because I doubt AOL will ultimately be able to generate enough viewers, even in aggregate, to make the business worth pursuing.

Patch has already set up shop in nearly 800 towns. By the end of this year, it expects that to be in 1,000 — each one with an editor and a team of freelance writers.

Traffic on individual sites is low; former editors say that the average post attracts just 100 views and that they considered 500 page views a wild success. But the overall traffic is growing quickly.

The Times points out that other efforts to aggregate hyperlocal news sites have failed. The reason for that is that most companies have not been satisfied with the numbers. To a company like AOL, a story with 100 pageviews is worthless unless you can create 1,000 other stories just like it in other towns. So far, so good. But as a long-term business, I suspect AOL will eventually find it can’t make enough money to justify the cost it incurs to manage the project across 500 markets.

But that doesn’t mean hyperlocal news sites can’t be a sustainable business. The value of hyperlocal news is not as a small piece of a huge aggregation of traffic. The value is in the quality of the traffic, and the value that targeted traffic can deliver to local advertisers. It’s why I believe most successful hyperlocal news sites will be run by entrepreneurial journalists who live in their communities. Being part of the community is not only vital for covering the news — it’s also vital for helping advertisers understand the value a hyperlocal site offers them.