Can a ragtag group of former newspapermen from the L.A. Times help newspapers fight off the content farms of the Web The founders and backers of Ebyline, which has been in private beta for a few months and launches today more broadly, think they can streamline the way news organizations manage freelancers and syndicate their own articles. Some publishers testing out the system include Variety, ProPublica, and The Texas Observer.

Ebyline is a marketplace for freelance journalists and syndicated news. Freelancers must be invited by an editor at a participating publication, or be vetted through an application. They can pitch story ideas into the open marketplace, or take assignments directly from editors they work with. The freelance writer and editor agree on a price, the freelancer submits drafts through the system, and once the editor accepts it after any necessary revisions, payment is authorized. The story can then be dumped into whatever ancient content management system the newspaper uses.

Similarly, publishers can syndicate their own articles to other newspapers and sites. For instance, Variety uses it to syndicate its movie reviews. Ebyline takes an 8 percent cut from each transaction. Ebyline streamlines the process and helps editors manage and discover many more freelancers than through lengthy phone calls or face-to-face meetings. But there is a big emphasis on maintaining quality by restricting access, as opposed to content farms like Demand Media or AOL’s Seed, which are designed to manage tens of thousands of freelance submissions.

The founders, Allen Narcisse and Bill Momary, both used to work at the L.A. Times. Backers include Jeffrey Johnson, the former publisher of the L.A. Times who was famously fired in 2006 for refusing to gut the newsroom, as well as Leo Wolinsky, editor-in-chief of Variety and former managing editor of the L.A. Times.

The idea of news exchanges seem to be gaining in popularity. At our first TechCrunch Disrupt last May, Publish2 launched with ethe concept of a news exchange to replace the AP by letting news organizations and blogs automate their syndication. Tools such as Ebyline and Publish2 are supposed to give print publishers a fighting chance against the encroachments of online media, but these marketplaces will only become interesting once online-only sites start using them too.

Eighty thousand people have tuned in to TechCrunch Disrupt to watch the launch of twenty new startups and products in the Startup Battlefield – nearly 2,000 in live attendance and another staggering 78,000 on the live video stream.

Of those twenty just ten made it to the second round, where the focus was on the business model. After long deliberations, and after calculating the total score of each startup based on our panel of expert judges and voting from the audience and viewers, we now have the final five TechCrunch Disrupt startups.

The winner takes home an experience of a lifetime, $50,000 in cash and the Disrupt Cup.

But first they have to prove once more on stage that they deserve to take the top spot. And the final judges – John Borthwick, Ron Conway, Marissa Mayer, Sam Schwartz and Quincy Smith – are not going to be taking it easy on them.

They have five minutes to explain their business and why it rocks to an overstimulated audience and those judges. And then they have to defend themselves on stage for ten more minutes under a barrage of skeptical questions.

Who will be the final TechCrunch Disrupt Champion? We’ll know soon enough.

Here are the finalists:

Betterment (watch)
MOVIECLIPS Mashups (watch)
Publish2 News Exchange (watch)
Soluto (watch)
UJAM (watch)

Which is your favorite? Watch their launch videos and tell us below in the comments.

Online news aggregation and curation startup Publish2 is today at the TechCrunch Disrupt conference launching a new product dubbed Publish2 News Exchange, with the ambitious goal of disrupting the entire reason for being of The Associated Press.

The AP being the cooperative owned by its contributing newspapers, radio and TV stations in the US, which operates a monster news and photo distribution network that non-contributing media organizations can subscribe to (for a hefty sum, evidently).

Publish2 is taking a swing at the newswire mammoth – they un-lovingly call it an inefficient monopoly – by launching a platform that allows newspaper publishers and other media organizations tap the vast amount of quality content already available for free on the Web (we don’t mean to brag, but TechCrunch was one of the examples cited by the startup on stage).

The startup realizes that the only way to disrupt the monster co-op is by offering a completely scalable substitute. Here’s basically what the company hopes the Publish2 News Exchange will do to the AP: ‘Craigslist it’.

As in, kill the AP’s main income stream by offering an open, efficient alternative.

And my educated guess is publishers are going to love this.

Publish2 announced an initial $2.75 million round of financing back in March 2008.

At the helm of the company we find Scott Karp, former Director of Digital Strategy for Atlantic Media and publisher of The Atlantic and current Editor & Publisher of Publishing 2.0, a widely-read industry blog. The startup can also fall back on a solid set of advisors (Stowe Boyd, Dan Gillmor, David Cohn etc.) and quite an impressive board of directors (which includes people like Robert Young, Kurt Johnson, Howard Weaver).

Does Publish2 really have the potential to destroy the AP and help publishers survive and thrive thanks to free online content publishers?

Time, as ever, will tell, but we can’t help but cheer for this one.

Feedback and Q&A:

Philip Kaplan: on one hand, feels like selling paint to the Titanic. Also not sure if I want newspapers to survive and thrive, as they’ve basically disrupted themselves.

Josh Williams: Great presentation. Cutting out the middleman is very interesting.

Chris Fralic: You explained the problem really well. The press will love it, as will the blogs.

Jeffrey Bussgang: felt like selling vitamins to dinosaurs. Where’s your business when newspapers die? What’s the value proposition then?

Response: the brands will survive on the Web, and we can play a role in that story as well.

Jeffrey Bussgang: The question is how big the window of opportunity is.

Second round presentation and expert feedback

“We want to become the brand newspapers rely on, and when they fade, we want to be there to help them.”

Publish2 wants to be in a position of trust and authority, that will ultimately be very profitable in an admittedly shrinking market. Scale is key.

“It’s all about the value of news brands.”

Philip Kaplan: are you charging for the content or is it advertising-based?

Response: we’re not charging, but content owners can and then we take a transaction fee. If the content is free, we have the licensing fee model.

Philip Kaplan: It makes sense, and that’s why we invited you back. Reducing the expense for publishers makes sense. But making an ad network out of it at some point, is going to prove very, very hard. Why not just sell the hell out of the content that you’re offering?

Response: yes, that would be fantastic.

Jeffrey Bussgang: How big are the budgets you’re going after?

Response: $30-$40 million for the AP disruption part, and then there’s the international aspect.

Chris Fralic: Shrinking AP’s market – what would you expect them to do?

Response: ignore us in the beginning, then reduce their business to provide the same kind of value. By the time, they will, it’s going to be too late. We can stay way ahead of them.

Well, it turns out “friends and family” is fairly expansive term in their book, and includes a lot of people who are quite willing to talk about it. As we said, Publish2 is a Digg-like site where anyone can submit links but only journalists can vote those links up and down. It also has a private research feature that lets journalists bookmark items without sharing them. “It’s like Delicious,” said one person testing the service, adding “I would never use the public part of the service, I’m too competitive to share my research with other journalists.”

So Publish2 looks to be a little like Digg and a little like Delicious. The only problem is that it may not be as good as either of those products.

New startup Publish2 hasn’t launched or even entered private beta yet, but the company has scored $2.75 million in funding. The investor, Velocity Interactive Group, believes in the idea so much that they put both Ross Levinsohn and Jonathan Miller on the board of directors.

Publish2 is talking freely about the product, they just won’t show it to anyone yet. The idea is to create a news resource for news rooms, who are increasingly stressed due to headcount cuts and competition with blogs.

The main service will be a Digg-like social bookmarking site, says CEO Scott Karp. Like Digg, anyone can submit a link to a news story. But the only people who can vote on stories are pre-approved journalists. The goal, he says, is to avoid Digg’s spamming issues and ensure that only quality news can get to the top in any category. He says it’s “Digg, powered by journalists.”

It’s sort of the opposite of Yahoo Buzz, which launched last month, in its approach. Buzz only takes links from pre-approved sites, but anyone can vote. Top stories must pass through an editor, though, before going to the Yahoo home page.

It seems that everyone has tried one variation or another of Digg. In addition to Buzz, AOL launched Propeller in 2006, which also required editors to approve top stories. And there are others with models that fall somewhere in between.

Publish2 will also allow newsrooms to use the service to create customized headline feeds Presumably the quality will be high because only journalists get to vote stories up. That may be true. But it’s just as likely Publish2 will end up a ghost town. One of the main reasons for Digg’s success was the viral way stories spread. People send stories to their friends to get them to Digg them up. Those people, seeing Digg perhaps for the first time, may come back to read the news. Publish2 won’t have that benefit.

We’ll withhold judgment until the product launched and we can take a look for ourselves.