We've certainly seen a lot of activity in the hyperlocal news arena in recent months as media companies such as Msnbc.com, The New York Times, ESPN and others look to expand their audiences regionally. Smaller media properties also see opportunity in segmenting the news, creating niche online news sites around neighborhoods or topic areas.

Now, a Bellevue upstart has landed a big round of cash to help propel some of those media companies forward. DataSphere today disclosed that it has raised $10.8 million in venture capital financing from existing investor Ignition Partners and undisclosed strategic partners.

Satbir Khanuja, the former Amazon.com employee who serves as CEO of DataSphere, tells TechFlash that the money will be used to roll out its content management platform to media entities in 2010.

"The uber vision is this: We want to basically become oxygen for every local community," he said.

Seattle-based Fisher Communications already has dozens of hyperlocal blogs operating on the DataSphere platform, including sites covering about 50 geographic areas in the Seattle area such as Ballard, Bellevue, Capitol Hill and West Seattle. Those sites can be found by going to KOMONews.com, the Web site of Fisher Communications' television and radio properties in Seattle.

Of course, Seattle already has plenty of hyperlocal news blogs for some of those areas -- including sites such as MyBallard.com and The West Seattle Blog. Those sites have already established strong followings in the communities they serve, with fast breaking news reports and dozens of comments on stories.

But Khanuja thinks the KOMO News sites can co-exist with the hyperlocal blogs which in most cases are run by individuals who live in the neighborhoods.

"They are getting very interesting traffic, and so are we," he said. "We are already getting basically almost 20 percent of all of Seattle population has hit one of the community sites, and we only launched it like only four or five months back."

The reason for that growth is the promotion through KOMO as well as the compelling content being produced by the media property, he said.

In fact, Khanuja thinks that partnerships with old guard media companies will serve it well as the battle for local advertising heats up.

"No one has come up with with a winning combination that allows for a scaleable roll out for these hyperlocal sites with a compelling business model," he said. "What we are saying is our union with established media companies allows us to scale this very quickly and actually create compelling value for users, advertisers and media companies."

The DataSphere platform is currently being used to power about 150 niche sites across the U.S., with Khanuja saying the goal is to have the technology powering thousands of sites in the coming months. In fact, some of the new capital will be used to support that growth.

DataSphere currently employs more than 70 people, with plans to expand that number in 2010. Khanuja declined to disclose the company's employee growth plans or revenues. He also declined to disclose the advertising revenue split with its media partners, or the number of page views being driven through its network of properties.

The company was founded in 2006 under the name SecondSpace, and set out to target the online property and real estate space with sites such as ResortScape.com and LandWatch.com. It still operates those entities, but the big push for the company -- which changed its name to DataSphere last year -- now centers on helping media companies navigate the new media maze.

"Most of these local media companies, whether they are local broadcasters or newspapers, they have tremendous amount of content and tremendous amount of brand both among users and advertisers," he said. "And what we are doing is we are complementing those two assets with our technology platform and ad sales force that we have."

In a way, Khanuja said that by segmenting the audience into geographic zones it can help advertisers better target their messages to people who actually live and work in certain areas. That opens up new advertising revenue possibilities for the media companies.

"What we are really targeting is hyperlocal small and medium businesses that want to spend between $50 to $300 per month," he said. Before the advent of the new niche properties, Khanuja said that small advertisers had to choose between expensive TV or Web-based ad campaigns that may or may have not reached their core local audience.

Now, small pet stores or dry cleaners can advertise on the local news sites of neighborhoods such as Fremont, Green Lake or Queen Anne. Khanuja said they are "very pleased" with the advertising that has come in thus far, though he declined to offer specifics.

DataSphere is content management system, so it could face competition from the likes of Wordpress which is used to power some large Web properties.

Other hyperlocal sites such as EveryBlock -- acquired by msnbc.com last August --also is trying to segment news by neighborhoods in cities such as Seattle, Atlanta and Chicago. But Khanuja sees things differently in terms of competition, comparing DataSphere to Google AdSense.

"Our play is not: 'Hey, use our technology.' Because, if that is the case, then they still have to do the work to figure out how to make money," he said. "Our play is what Google did with Google AdSense, which is say: 'Hey, you insert this code and I will pay you money.' Our pitch is very similar which is we are giving them our technology and we are making them almost 10X the money that they can make on remnant inventory on their own. And they don't have to do anything, we are are leveraging all of their existing assets."

DataSphere's board includes Ignition Partners' John Connors -- the former CFO at Microsoft -- and Colleen Brown -- president and CEO of Fisher Communications. DataSphere previously raised $6.5 million.