By Staff Writer – Boonsri Dickinson (@boonspoon)

Even though start-up company Fwix just started in October of 2008, it now aggregates 10,000 news sources — including content from laid-off newspaper journalists-turned- bloggers. Fwix has just added video to the mix of its distribution content.

What is unique is that their ad model isn’t based on search. Instead, both the content producers and the publishers make money on the shared revenue stream. Though a service called AdWire, a person’s story is distributed around the Internet through a widget. Now with video, the money from the pre-roll advertisements might help media companies tap into the $100 billion pot of hyperlocal news ad money.

According to Fast Company:

“Before, we didn’t think we could do video,” Fwix’s 22-year-old founder and CEO Darian Shirazi told Fast Company. “Now that we can, it adds a lot of color to the widgets and the sites they are on. The feature is simple as far as what we’re adding, but it will monetize much better.”

Like Fwix, other media companies like Salon.com, AllVoices.com, and Examiner.com have also been trying to make money off of blogs. Media companies have been buying or investing in new platforms to bring local news to their homepage. For instance, Outside.in could soon bring your neighborhood news to CNN eyeballs —  in the same way Everyblock will feed content into MSNBC.

The game is certainly changing. Local advertisers have been wanting to spend their money on local news, but most of the content has been produced by bloggers and community journalists. Now that big media giants are tapping into these hyperlocal news start-ups, more ad dollars might follow. However, you need pretty convincing salesmen to pull it off. The Washington Post tried the hyperlocal news thing, but gave up.

It seems like these start-ups created easy ways for media companies beef up the local news coverage. After all, local newspaper journalists continue to shrink. Just because we have more tools does not mean the information we are getting is better. We still need to pay more skilled journalists to cover the important stories, or we will all suffer in some way. We might not see the real damage until it is too late.

Image: flickr/ Paul in Leeds

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