Guardian has a good piece on hyperlocal today asking (again) whether it can pay its way? The jury is still out.

The piece picks up on a change I’ve seen and that is that the label “citizen journalism” is possibly no longer applicable as it was three or four years ago. The focus it seems has changed to more community led websites like my local one Harringay Online. That site like many others has community, activism and sharing at its heart rather than news.

Other examples of that are some really vibrant sites such as PitsnPots.co.uk in Stoke-on-Trent, which has racked up more than 30,000 comments and sheffieldforum.co.uk. It points to two others that have more of a mix of news and journalistic involvement in saddleworthnews.com and ventnorblog.com in the Isle of Wight.

Plenty of comments, however, don’t mean plenty of cash and while many of these sites are very useful it is doubtful there is cash to be made from community activism, information with some news thrown in type sites. They are more digital community centres than businesses.

But elsewhere the piece quotes Jason Oxbridge, behind hyperlocal media buying agency Oxbury Media, who has built up an ad network of 10,000 sub local newspaper publications and sites representing a ten million plus strong audience.

Oxbridge says “the future depends on making a decision between blogging for the kudos and for the motivation of creating news and activism, or doing something for cash”.

There doesn’t seem like a lot of cash around. The Guardian might be trialling its own local journalism projects in Leeds, Cardiff and Edinburgh, but isn’t rushing forward to pour more cash in.

There is more afoot at rival Associated Northcliffe Digital. It started what it called Localpeople projects in Bideford, Falmouth and Clifton among others last year and has just announced plans to extend its network and bring all of its online community based websites out of beta. It says sites have proved popular. Since its initial beta launch of 25 sites Associated says Localpeople has grown on average 22% each month and now has 100 websites in total with a focus on providing small businesses a way of reaching local audience.

It is small scale but growing, but you have to guess that the returns in the UK at least are likely to be equally small and not enough to sustain paid for local journalism on a large scale.

In the US, Mainstreet Connect is one of the latest entrants into that market that has seen mixed results. With the Washington Post closing its LoudounExtra.com operation last year while the New York Times said that while the content was flowing it had “been harder to figure out the business model” for its own The Local project. Jim Schachter, editor for digital initiatives,  put it like this in November: “An explosion of interest among local merchants in advertising on hyperlocal sites has been just around the corner for a number of years now.”

While Connecticut-based Mainstreet got almost $4m in first round funding to launch four sites in the northeast within the past three months there were also reports last week that that AOL is ramping up its news network hiring “hundreds of journalists” as part of a content reorganisation — many of those providing content for Patch. That said (and herein lies the crux of the matter) most of those are not full-time. AOL now employs 4,000 journalists, but only 5,00 are full time.

The report about AOL staffing up is further confirmation of news from early May when it was reported that AOL wanted to hire 290 people to expand Patch, which it hopes to grow from 30 sites to hundreds by the end of this year.

And while there is money splashing around in Connecticut across the US in California the story is less rosy. The Orange County Local News Network (partnered with the Los Angeles Times Media Group) closed after just four months of operations.