Under-served small communities are getting more attention. Companies like TownNews, Grayboxx and Topix have set out to focus on small town and exurban residents, and aggregating those local users for advertisers.

As we wrote in April, Topix — a 25-person company that is 80 percent owned by Gannett, Tribune and McClatchy — has been aggregating local news from a variety of sources. It has 25,000 news sources in 20,000 communities. It counts more than 12 million unique visitors.

Lately, it has also been incubating local blogs and other user-generated content. It is now getting 60 percent of its content from user-generated posts, and 60 percent of those posts come in without a linking story. The traffic is disseminated via bookmarks, e-mail, and a number of affiliates that use it for personalized local news, including CNN, Ask, Infospace and My AOL.

The emphasis on user-generated content isn’t particularly hard to discern, notes new CEO Chris Tolles, who was formerly head of marketing (founding CEO Rich Skrenta and VP of Business Development recently left the company to launch a start-up). Tolles is also speaking on the SES side at ILM/SES Local. “You don’t have local headlines in a small town,” he says. “There is no ‘there’ there. Local news is not a search problem.”

Tolles adds that the emphasis on UGC was driven by users, rather than any Machiavellian designs by the principal investors to expand their (weakened) empires. “Users kept sending feedback on the comments forum,” he says.

The effort to harvest UGC on a geographic basis, however, would seem to put Topix on a collision course with sites such as Placeblogger and Outside.in. Tolles says there may be a few points of collision but notes that Topix is differentiated by its scale.

Those are “hand cranked sites.” Beyond a certain number of places, sites like Outside.in are … pretty bare. We are in many more places. We own towns with populations between 5,000 and 50,000,” he says, adding that nobody else gets in more than 10,000 cities, even though there are 32,500 U.S. ZIP codes.

Now, what does that really mean?  Only 8,900 communities in the U.S. are big enough to have cable TV franchises, for instance. We must be talking about very small places. Indeed, Tolles says some of the town count is enhanced by neighborhood data. “We’re loading in neighborhood data from a lot of cities,” he says.

And then there are localized sites such as Yahoo! and its local News. But Tolles says Yahoo! really isn’t a direct competitor — especially since it stopped supporting user forums.

For Tolles, Topix’s next challenge is fairly obvious: sell some advertising. He notes that the company hasn’t tried to sell advertising for two years, making most of its revenue from Google AdSense commissions and the like.

To that end, Topix recently hired a VP of sales. The differentiation points for Topix are clear to Tolles: a non-Facebook audience of local users in small and exurban communities. Whether ad agencies want those audiences, however, is another question. Typically, they’ve demanded to reach audiences in the “Top 20” or “Top 50” or “Top 100” markets. That’s why local newspaper networks haven’t done well.

But Tolles believes they’ll go where the market is. Wal-Mart figured that out years ago, he says.

One area that I can’t figure out is why Topix isn’t being sold as an extension of the metro markets served by McClatchy’s RealCities network. Wouldn’t that make sense?