Outside.in is a startup that aggregates local blog and news feeds for 60 cities, and creates geographically customized pages that greet visitors with feeds relevant to the presumed location of their IP address.

Now Media deal zine Paid Content reports that Outside.in, whose backers include such tech gurus as John Seely Brown and Esther Dyson, has gotten a second investment of $1.5 million from pretty much the same funders as had earlier seeded it with $900,000, “including Union Square Ventures, Milestone Ventures, Village Ventures.”

I had noticed that for $900K investment and had written about it in June. At that time I was particularly impressed by its geo-location of IP addresses and wrote:

“Their site automatically located me on my first visit and showed me local news and blog links for Oakland – a tolerable assumption given that I live a stone’s throw from that city. When I typed in my zip code San Leandro came into focus. When I visited this morning I saw a copy block in the center of the screen about comic books – and right beneath it the name and address of the comic book shop where my 14-year-old son window shops”

In that same blog posting I lamented that what seems to pass for “local web sites” nowadays is a centrally-served collection of tagged stories and postings:

“is this how local connections will develop? Through clever, centrally deployed technologies that allow isolated social units to mingle, at least in the virtual sense, through some cyber-intermediary (that will presumably sell our eyeballs and clicks to national advertisers) . . .  I want more from social media. I want community. Real community. Clicking into the cloud to find the local comic store is commerce. But is it community? I guess, if by community you mean using Fed Ex to borrow a cup of sugar from the neighbor. “

That’s not a knock on the Outside.in software engine so much as it is a reflection of the fact that social media tools for community organization, publishing and other grassroots efforts are not yet widely disperfsed. Only smart sftware engineers and user-interface designers have cracked the code on how to build and field these systems (by the way hats off to Outside.in for getting the breadth of coverage they have for virtually nothing invested.)

Deadline for local funding contest Oct. 15: So while this is round 2 for Outside.in, I think the reinvention of local news and community remains in its early days. And that reminds me to remind all dreamers and schemers that the October 15 deadline of the Knight 21st Century News Challenge looms. Think local not virtual. Read the rules. And ask for a slice of the $5 million the Knights will give away.

Here are last year’s winners for clues as to what they’ve already funded. Good luck!  (Especially to me as I hope to spend this last weekend retooling my last year’s losing applicatom to seek some $$$ for MiniMediaGuy.)