Serious Money: The blogosphere is changing the world. At least that is what some people think, writes Chris Johns

Other, more conventional, opinion would remind us that in the late 1990s, at the height of the technology bubble, the internet was reckoned to be on the verge of transforming just about every business. For example, some very smart people at the Boston Consulting Group wrote a book called Blown to Bits, which warned us about the impending chaos likely to be caused by the internet's disruption of existing business models. Those very smart people subsequently issued a mea culpa, sort of admitting that they had become caught up in the dotcom bubble, and that the businesses they thought would be annihilated by the web had shown a remarkable determination to survive. All of which is somewhat ironic of course: disruption just took a bit longer to arrive (just ask any telephone company).

So how come the business of writing an online journal - the essence of blogging - is reckoned to be of any importance? And how is any of this relevant to investors? The answer to both questions is the same: timely information. The blogosphere is rapidly becoming a source of news, views and facts that can be more timely and more accurate than conventional sources. At the very least, bloggers' opinions are often far more entertaining than their conventional counterparts. Even expensive data providers such as Bloomberg and Reuters can be usurped by the bloggers.

Although some sceptics concede that useful tidbits can be gleaned from blogs, most of the output is pure dross and the chances of finding anything worthwhile are so low that the necessary considerable effort is not worthwhile.

Anyone with access to the internet can set up a blog within seconds. Imagine this newspaper filled with the randomly selected prejudices of a hundred or so not terribly qualified people. More sinisterly, imagine the ravings of those who would like to ramp up their favourite stock. That's what an hour or two spent reading various blogs can look like. Not very useful. But the newspaper analogy helps us to understand how blogs are developing: editors of traditional print media select contributions and appoint journalists with the aim of constructing a product that people will buy and read in sufficient numbers such that advertisers feel it worthwhile to spend lots of money buying space.

So it is with blogs: the operation of market forces mean that we quickly learn about the good ones and the rubbish is usually easy to spot. There are some insights to be gleaned here, even some that can help us make better investment decisions.

For example, it is perfectly possible to acquire most of the knowledge necessary to make decisions about buying and selling the shares of telephone companies from blogs. Any recourse to traditional broker research is rapidly becoming unnecessary, at least for this particular sector (and for others). For an example of what I mean, take a look at www.telepocalypse.net, www.eurotelcoblog.blogspot.com, and www.gigaom.com. These are three of my favourites: importantly, they all contain links to other tech/telco sites. In providing such links, respected sites give a kind of endorsement to other decent websites. We may not agree with the judgments of others, but knowledge of how other people think can be a very useful commodity.

One of the most interesting web-based resources is www.seekingalpha.com (alpha is a piece of financial jargon that refers to the ability to outperform a chosen target or benchmark). In its own words, this site "represents a new approach to providing financial news and analysis to investors that leverages the phenomenal growth of blogs". Essentially, this site filters the financial blogosphere for what it considers to be the best bits. SeekingAlpha edits and selects from 60 contributors to provide more "thorough and timely coverage of stocks and sectors than has previously been available in online financial journalism". Inevitably, the coverage is relevant almost exclusively to the US market, but there is analysis of China, India and Japan buried within the site. And much else besides.

For the individual investor there is a wealth of information, from the basic to the most sophisticated. Want to find out all about exchange traded funds? The latest stories related to the gold market? The best stock market commentary on the web? Most, if not more, than you could ever need is to be found here.

SeekingAlpha may not prove to be the last word in finance on the web, but it is certainly an indicator of things to come. Anyone who does not find its content congenial could always use it as a template for their own "virtual newspaper". All blogs these days supply RSS feeds, which enable us to select the ones we like and, essentially, build our own version of SeekingAlpha. More work initially of course, but with superior results, perhaps. I like to run the two systems side by side. Mainstream media businesses will probably do something similar: absorption of the blogging model in some form would be an obvious survival tactic.

Could blogs supplant traditional broker research? At risk of sounding like a turkey voting for Christmas, I think the answer is that in certain cases they already have. Too much of the output from some investment banks has been sanitised by lawyers, committees and other interested parties. Indeed a void has grown in the provision of equity research in recent years, one that the blogosphere is going some way to fill.

Chris Johns is an investment strategist with Collins tewart. All opinions are personal.