The crowdsourced news site NewsIT has announced it has received $500,000 in seed funding.

The site, founded by former journalist Melinda Wittstock in 2010 allows people from all over the world to collaborate on news stories. Users earn rewards for posting good content from the Web, smartphones and tablets. Wittstock, a serial entrepreneur, has 25 years of experience in media, ranging from print to broadcast to the Internet.

“News is social. It’s a conversation. The more participants, the more perspectives, expertise, and eye-witness accounts, the better the quality, breadth and relevance of the reporting,” Wittstock said. “We empower people to create, collaborate and share the news stories that matter most to them, their friends and community. And our unique editorial processes assure quality, unprecedented efficiencies and scalability.”

Anyone can join the site and contributed text, video or pictures to topics, which are then vetted by professional journalists using sophisticated algorithms.

NewsIT has already covered the high cost of college textbooks and a rally of veterans for Republican presidential candidate Ron Paul.

The company said in a statement that NewsIT aims to give people a voice to report on the news that matters to them the most, enable advertisers to target markets with greater precision than other platforms, and provides media companies with low-cost content, akin to a crowdsourced Associated Press (News - Alert).

The company will launch its iPhone app at SXSW Interactive in Austin, Texas. NewsIT has also been selected as SXSW (News - Alert) HATCH finalist, and will be pitching their site along with 15 other companies. People attending SXSW will be able to cover topics like Internet privacy and social media in the 2012 U.S. presidential race.

“NewsiT is the most exciting new service I’ve seen in a 35 year career in the media,” Sandra D. Kresch, an early investor in the company, said. “It builds on the power of a highly motivated, attractive demographic to transform the news business with benefits to consumers, media and advertisers. I’m thrilled to be a part of making it a reality.”

“Having helped a small software startup grow to be a substantial player in the middleware segment of the video game industry, I am thrilled to be a major supporter of NewsiT,” P. Chrisman Eribe, another early investor, said.