Eddy Elfenbein has a very good idea, which fits quite neatly into my worries about everybody but the bloggers themselves making money from finance blogs. The presenters at the Money:Tech conference are unanimous that there's alpha to be found in them thar blogs, but they're curiously silent on the subject of whether and how the bloggers might be compensated for their insights.

Elfenbein points them to the Global Settlement:

The settlement required funding of "independent research."
The result has been a disaster and few people will admit it. Basically, nobody wants this research...
Here's my proposal: Instead of wasting money on political ads or over-paid consultants that nobody reads, let's fund something that's already working. Each year, the trustees of the of independent research funds should award prizes of, say, $10,000 each, to the best finance bloggers...
The Global Settlement was for $1.4 billion so I think they could scrape together a little cash to fund some worthy blogs. It would be a small slice of what's already being spent and it would certainly have a much greater impact on research that is truly independent.

He's right. If you love the bloggers when they write for free, just imagine what they'll do if you incentivize them with a million dollars or so! That sum is tiny: big buy-side shops spend many multiples of that on directed commissions for sell-side research they usually disdain. This is exactly the same idea: investors should pay, ex post, for good ideas that they are shown for "free".

And what about the ideas that come from data-miners and blog aggregators who don't so much look for individual ideas but rather look for bigger-picture signals from the mass of blogs as a whole? Collective Intellect generates authority scores for a broad mass of financial bloggers, maybe those scores could weight a lottery system, where a few lucky bloggers end up with a surprise check for $10,000 every so often.

All this wouldn't cost much, in comparison to the sums currently spent on research by the buy side. And it could have a transformative effect on the quality of ideas the buy side receives.