Ever wonder how a site like Talking Points Memo can run AP content without an official relationship with the wire service?

The answer is a site called Mochila, a syndication platform launched back in 2006. About 1,200 websites use the platform, creating a combined audience of 200 million monthly page views for the syndicated content, which comes from the AP, Reuters, AFP, US News and World Report, Investor’s Business Daily, and others.

The appeal for a site like TPM is simple: It gets to run content from places like the AP and Reuters without having to pay expensive subscription fees. And by allowing Mochila to place ads alongside the content, sites can actually take a 30 percent cut in any ad revenue they bring in. The content producer takes another 30 percent and Mochila takes 40 percent. (Here’s an example of a Mochila syndicated story on TPM.)

So why would this be of interest to content producers? Mochila’s CEO Benjamin Chen says he can provide something a news organization going it alone can’t: scale.

“Quite frankly, online these days it’s getting harder and harder to have a single destination that reaches your entire audience,” he told me. “A publisher might not have enough ad impressions [to sell to a major advertiser]. Microsoft wants 10 million impressions. They love [your] content, but you only have 2 million. So what are you going to do? It’s not like you can instantly, somehow magically tell Google, ‘give me 8 million more impressions tomorrow.’ That’s not going to happen.

“Your next choice is syndication. How do you syndicate your content with that messaging, that Microsoft wants to be a part of, into other places where that audience is? This is a big concept because large traditional publishers, these companies have traditionally been monopolies — [they] have never thought to care about that. In the four-walled approach, you never had that problem. Now, in this new world, where everything is fragmented and your audience is continuing to fragment, you’ve got to be more nimble with how you reach your audience and syndication is one of the only ways to do that. That’s a really big part of our business.”

Chen said he believes one day the syndication model will be lucrative. But for now, it’s not enough to sustain his business of about 30 people (including engineers and traditional marketers). “Enabling syndication as a business is still not enough to be the only source of revenue for us, to make that a longterm initiative at this stage,” Chen explained. “I do believe it will happen, but we’re just so early to that notion that this is the reality of the market for us.”

In the meantime, his other source of revenue is working with high-end brands, like Citi and BP, on creating contextual advertising that merges content with brand messages. “What we’re finding is that large brands want to tell a story. In the notion of telling a story, that little display ad is not going to do it. You’re going to need something more that has content as part of the storytelling. In some cases you may have your own content. In some cases you want to mix your content with other content.”

And Mochila, thanks to its deals with news organizations, has plenty of content to mix with. As an example, Chen pointed me to what is, essentially, a complete website that can live on another site. The microsites that Mochila built for BP isn’t selling a product — it’s more of a BP endorsement of the idea of diversified energy sources. The mini site links to energy stories from publications including the AP, Investor’s Business Daily, and AFP.

The stories themselves aren’t necessarily about BP, or even mention BP — the idea is to to situate BP’s message alongside the premium content related to the story BP wants to tell. This kind of mininarrative-for-hire is a big part of Mochila’s plans: Chen told me these interactive microsites perform two to 10 times better than display ads of the equivalent size, which would indicate we’ll be seeing more of them in the future.