AOL (News - Alert) on Friday agreed to purchase hyper-local news aggregator Outside.In. The American media conglomerate will integrate its new acquisition with Patch, the company's network of more than 800 local blogs and news sites.

Business Insider was the first to break the news, which TechCrunch later confirmed after talking to Patch president Warrent Webster.

Founded in 2006, Outside.In is a platform that aggregates news stories and blog posts that are related to a given location. The website claims to organize content for more than 85,000 towns and neighborhoods, enabling users to type in their zip code and find articles and blog posts that are relevant to their particular area. The company monetizes the site by selling online ad space to local companies.

Although Outside.In has been on the scene for a while now, its traffic has been steadily declining over the last few months. In fact, comScore (News - Alert) reported that the site only garnered 317,000 unique visitors in January of this year.

AOL did not disclose the terms of the deal, but a source told Business Insider that it is worth less than $10 million. Considering Outside.In has raised more than $14 million in funding to date, it seems that the company's investors are waiving the white flag. The local news aggregator has been backed by firms such as Union Square Ventures, Milestone Venture Partners, Betaworks (News - Alert) and several individual investors.

It will be interesting to see how Patch integrates Outside.In's technology, as the aggregation tool will no doubt bring up articles from media sources that compete directly with the local news network.

AOL acquired Patch in 2009 and reportedly invested as much as $120 million into the venture this year alone. Patch only operated a handful of local sites in the Northeast before the acquisition, but now runs hundreds of online communities throughout the country.

Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf