It's not that people aren't interested. According to the report, 61 percent of US online consumers care about hyperlocal issues -- a significant but not huge drop from the 70 percent that care about national matters and the 69 percent who care about their cities. The word hyperlocal refers to content targeted to a smaller than local geographic audience. For instance, a paper targeted to New York City is local; one targeted to Harlem is hyperlocal.

Unfortunately, "there's a gap between the sources people rely on for consumer information and for business listings," Epps explained in a phone call with the Industry Standard. People may look to a local newspaper's Web site to find out what's going on with that construction down the street, but they're turning to other Internet sources, such as Google or Craig's List, to look for used cars or see what movies are playing where. That's a problem "because the economic model is that business listings pay for" the expenses of researching, writing, and presenting news.

The report offers three recommendations for creating a successful hyperlocal business:

First, use low-cost, community-created content, because it "it costs far less to produce than hiring professional reporters." (Full disclosure: If everyone followed this advise, I'd be broke.)

Second, make it easy to advertise by setting up a system "with smart, user-friendly automation."