Note: see update with response from Jeff Jarvis below.

The online news space is heating up with a new distribution vehicle called Daylife, which revealed it has more than two dozen investors, including the New York Times Company, and practically an all-star team of Internet content pioneers: Craig Newmark, Dave Winer and Jeff Jarvis, according to this post by Staci Kramer.

A few of the investors have ties to the tech world in Seattle.

Daylife's founder, Upendra Shardanand, co-founded Firefly along with Andy Sack. They sold the company, which developed personalization technology, to Microsoft in 1998. Sack went on to help create Judy's Book, the Seattle-based shopping recommendation site.

One of Daylife's angel investors is Mika Salmi of Atom Entertainment (formerly Seattle-based Atom Films).

Daylife looks a lot like Google News, since it, too, is an automated news aggregator. Daylife seems to have a more robust system of organization, though, since top stories have a whole page with quotes, photos, blog posts and other context. It also attempts to filter out redundant content into another area so you're not just looking at 300 variations of the same story.

Unlike Google News, Daylife is available only in English for now. It aims to make money through advertising revenue, and to be able to direct advertisers to a targeted news audience. It's not clear to me how that will work.

Daylife says it exists to help make "a healthier news industry, that is able to better serve the public." And, of course, to make money for all those high-profile investors.
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UPDATE: Jeff Jarvis responds below, explaining what sets Daylife apart from Google News and why it's too early for advertising.

He writes:

Daylife's analysis of the news will yield a number of benefits. One you can see now is the connections it exposes among newsmakers: Angelina Jolie's page can show you that she is connected to Africa and the U.N. and to Hollywood and stars -- and those links make it possible to navigate around the world of news apart outside the strict structure of new to date (that is, entertainment v. world vs. business). This analysis will yield other benefits as partners use the platform's API.

Also, importantly, Daylife is a platform. Your newspaper site or blog can use the API to present more relevant news to your readers, for example.

And we are using the platform to build what we hope is a refreshing experience of news on Daylife's own site, experimenting with such features as linking to stories via the quotes the system pulls out of articles.

Daylife does not have advertising today. It really makes little sense selling sponsorship to a brand new site that has only a day's worth of traffic. We have various innovative, we hope, advertising models we'll be rolling out in time.