seekingalpha.jpgSilicon Valley venture firm Benchmark Capital has invested in a finance blog company called Seeking Alpha, a surprising move in our view, given that blogs are difficult to monetize.

Venture firms want to invest in companies going for billion-dollar markets, and Seeking Alpha is a two-year old boot-strapped company that is losing money, the company’s chief executive David Jackson confirmed with us earlier today. Blogs have become mainstream, too, so what do you think Benchmark sees in this company?

Well, it apparently sees a very focused chief executive, who wants to aggregate all of the finance information being supplied by hundreds, perhaps thousands, and maybe even millions of investors with a view about stocks, and ordering their analysis by ticker symbol and other methods. It is supplying the transcripts of quarterly corporate earnings calls, annotated data from WSJ pages and other info.

Underscoring Seeking Alpha’s ambition is a deal the company announced today with Yahoo Finance, whereby Seeking Alpha’s content is added to the stock quote pages of Yahoo Finance, alongside other mainstream content, which includes sources like Street.com and Dow Jones.

CEO Jackson said Seeking Alpha aggregates content from 200 contributors, who have signed a basic agreement with Seeking Alpha to provide the content. The contributors have an incentive to providing the data, Jackson explains, to get exposure for their newsletters or consulting services, and so they are doing it for free. One guy won a $10 million account from a client who saw his analysis on Seeking Alpha, says Jackson (though we did not independently attempt to confirm this). Seeking Alpha vets the material, and asks the contributors to disclose any conflicts of interest they may have, such as short or long positions in stocks. He has hired human editors to do this. Seeking Alpha needs the capital to build up its web team, and to help customize the stock analysis in sophisticated ways, so that it reads nicely on Blackberry devices, for example, Jackson said.

By putting the bloggers on a par with Dow Jones, Street.com and other mainstream sources, Jackson thinks Seeking Alpha will encourage even more bloggers to participate. Seeking Alpha’s aggregated content may soon dwarf the content produced by mainstream sites, the thinking goes.

So now you are getting the full image — the image of that revolutionary, proverbial long tail. “We’re tapping into the long tail,” says Jackson referring, to the long line of contributors with a good opinion about stocks he thinks will transform analyst coverage of mid- and small-cap companies that newspapers and other sources don’t have the resources to cover.

This is just the latest start-up using Web 2.0 techniques to attempt a break into the big time. Another includes SocialPicks, which we saw a demo of several weeks ago. SocialPicks, based in Silicon Valley, is trying to create a Web site to do something similar to Seeking Alpha, but is in early days, and has yet to figure out how to mobilize contributors. There is also New York based Monitor110, which just raised $5 million in funding from DFJ, which is using blogs to give investors a new edge on information.

Jackson did not disclose how much Seeking Alpha has raised. Jackson worked for five years as a technology research analyst for Morgan Stanley in New York covering the communications equipment sector, and left in 2003.