Local online magazine startup Media Street, formerly known as Cut Media, is hoping to expand its local news and information sites with a $90,000 investment (£58,000) from a US foundation.

The company has entered this year's Knight News Challenge, which aims for the fifth year running to give out up to $5 million in grants to innovative ideas for developing platforms, tools and services for community news.

Set up by Jack Rutter and Jonathan Lloyd a year ago ago, Media Street currently runs a flagship site covering the King's Road in London and has started sites for Fulham Road and Notting Hill Gate.

Media Street has asked for the grant money to help it finish development of the Media Street software behind the sites and fund the launch of other sites, including a full launch for the Fulham site and the hiring of a community editor. The startup also hopes to use the money to develop an API for its site to further benefit local communities.

According to the company's Knight application, 40 paying customers have signed up to Kingsroad.co.uk in this quarter so far and are expected to generate almost £15,000 for the business. In an interview with Journalism.co.uk in September, Lloyd explained that 500 businesses had signed up across the three sites in total since launch. Media Street's business model is currently shaped around year-long subscriptions to the King's Road site on which business can buy features, including a listing, local offers or notices to market themselves.

"We are confident that after six months, Media Street and our case study site, King’s Road, is providing a new way to support news and information in geographically defined areas," says the application.

"At present, we can also plug in any domain we want so Media Street has the potential to scale and support other English speaking communities. With the Kingsroad.co.uk project, we are testing whether Media Street can support a road but there is no reason why is can’t support other communities; from roads and streets to wider areas such as cities and towns - whether they're in the US or UK. It has the potential to be a global products which runs local sites around the world."

The company has recently changed its name from Cutmedia.com Limited to Media Street Apps Limited and launched a new holding site for its Media Street platform for local sites. In its application it says it hopes to provide open source software and opportunities for journalists with digital skills to run their own local Media Street sites.

The deadline for applications to the Knight News Challenge is tomorrow (1 December) and the winners will be announced in 2011. In June 12 projects were awarded grants in the 2009 challenge, totalling $2.74 million.

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