The service tracks information from now 50 million sources, analyzes it for topical relevance and delivers near real time alerts to customers. It focuses on blog, deep web and static web changes. Topical expertise evaluation is an important part of the secret sauce.

Draper Fisher Jurvetson led this round of funding and Ron Conway is the most prominent new investor. The company claims to have spent very little of its investors money so far. Longtime financial markets AI geek David J. Leinweber has also joined the Monitor110 board of advisors.

Company President Roger Ehrenberg told me yesterday that fewer than 10 clients have been using the software in a live environment for the last week. He says they have a long waiting list of customers and will increase the number to 20 hedge funds in January. Hedge funds are being targeted, he told me, because they act fast and are willing to pay a premium for tools and data. The price of the service hasn’t been announced yet, but Ehrenberg would tell me that it will be more expensive than Bloomberg. The company is targeting individual traders, has no plans to make big distribution deals and values its customer face time as a way to learn about changes that are needed quickly.

Why so much excitement about a company that seems to do something similar to other services and hasn’t even launched yet? Part of it is based just on the brilliance of RSS and all the things that can be done with it. Imagine now having 3 well funded years to build an automated RSS strategy for your information rich market vertical. Ehrenberg says that the combination of source breadth and reporting speed is what makes Monitor110 stand out.

Preventing the system from being gamed is obviously something Monitor110 has taken pains to prevent. Using more than popularity to determine authority is the first step. Blogs and social media are just one of several areas the service looks for emerging information; gaming is a frequently raised concern but the analytics in question will be no small task to toy with.

I asked Ehrenberg whether a high-end, RSS fueled market monitoring tool is ahead of its time. He said that in the hedge fund world, discussions with prospective customers indicate that though there is almost no knowledge of what RSS is in the field, a simple explanation stokes serious interest quickly. He pointed out that projects of a similar scale had been tried in the early 90’s before RSS was available and were cost prohibitive.

Will the service result in information overload and rashly made decisions because of its focus on broad, nontraditional sources? Overload can be prevented through a good UI and organization of incoming information sources but it’s up to the user to keep their head on straight when data is coming in fast. Anyone who wouldn’t pay for delivery of relevant information fast and early just because deliberation is an asset is probably making a mistake in any competitive field. The nontraditional nature of the sources is an asset not a problem for people who want to move first.

Of course this product hasn’t come to market yet and it could be an abysmal failure. I don’t think it will be, however, because the opportunity to leverage new technologies (RSS most importantly) and the energy behind this startup in particular are too big to miss completely. Some one, if not a number of people, is going to nail the new real-time research of emerging social media.

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The company was profiled in the Financial Times last night, but we have exclusive details and the first public screenshot of the service.

Almost three years in development, with funding from Draper Fisher Jurvetson amongst others, Monitor110 is set to launch in early 2007. It looks a lot like big parts of my research system (which I take great pride in) rolled into one very smart, automated system. High level knowledge workers in the future are likely to combine Monitor110 for what we call feed reading today with something like SystemOne for a CMS and Touchstone for alerts. Just as Root Markets is taking attention to financial markets first, Monitor110 is focused at launch on hedge funds. People who deal in pure money are probably the only market that is ready for these kinds of technologies on a large scale today, though individuals in any field could well use them to gain a competitive advantage.

Monitor110 gathers information from 40 million sources of various types (100 million by the end of next year they say), ranked by financial market knowledge through a proprietary algorithm that takes 50 factors into account – inbound links being just one reputation metric. Users can chose between top sources preselected for their market sector and subscribe to sources of their own. Static sites can be monitored for changes with good granularity. Premium subscription and other deep web sources, blogs, forums, news and regulatory filings are among the sources included. The end results will be delivered through the company’s RSS reader with email, IM and SMS alerts as appropriate.

Rather than keyword search, the company’s technology is based on conceptual or semantic search. Those conceptual search results are prioritized relative to key events in industry news.

If you’re familiar with the consumer online research space, think Technorati plus Pubsub plus Sphere plus WatchThatPage plus NexisLexis plus Newsgator white label plus Rasasa – with vertical search domain knowledge overlaid that targets people who’s bread is buttered by getting key information first.

I know that I struggle with piecing together a research infrastructure similar to Monitor110’s with quite a few different services. To have all of the above functions rolled into one service is a very exciting prospect.

Monitor110 will be a hosted service subscribed to per user per year. The company wouldn’t tell me what that price will be but said that it’s a high-end product. I asked whether RSS and web based real-time research were better appreciated today than they were when the company was formed. Monitor110 President and COO Roger Ehrenberg told me this is definitely the case, but that RSS in particular is still almost unknown in the hedge fund milieu. None the less, Ehrenberg told me that the service has been very well received among exclusive beta testers, a number of whom have already clearly identified ways the service has made them money.

Monitor110 does not incorporate Attention data as Ehrenberg says the sector is very siloed and not set up to share knowledge. I am surprised that in the three years since the company was conceived and has incorporated so many trends in cutting-edge online research that they haven’t incorporated Attention on an individual level. I also asked whether the service would be available preinstalled on a server to place onsite and it will not.

Will Monitor110 be able to scale in performance to its ambitious goals and convince customers that it is sufficiently secure as a hosted service? Only time will tell, but the company certainly has the resources to work towards those goals.

The company’s primary strength is their domain knowledge around financial markets. If the same infrastructure could be built into other verticals, I don’t know how much demand there would be today, but I’m willing to bet there will be a whole lot in the future. In fact, now that research suites like Monitor110 are coming to market, those of us who have been piecing together several different services to gain a competitive advantage in our fields are going to have to move to the next level. Services like this will give many more people the tools to get high-quality information at very early stages after it emerges.

The following is the first screenshot that has been released by the company. You can see that it’s tailored to the financial crowd, but you can also see how the different features and topics are integrated. I expect that Monitor110 will see substantial adoption in it’s target market and is a harbinger of the kinds of knowledge tool suites that many industries will rely on in the near future.

Beta users will be accessing the fully functioning service in October and the service will be ready for subscription in early 2007. You can click on the screen shot below to view a larger size and get a look at what the systems multifeature company and concept search subscription dashboard looks like.