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Elsevier has launched CiteAlert, a free service notifying authors when one of their papers is cited by an Elsevier journal. (Thanks to ResourceShelf.) The service only covers citations to articles published since 2005 in journals indexed by Scopus.
Update. In my list of players in the final bullet, I should have mentioned ISI Web of Knowledge, which has offered citation alerts since 1965. (Thanks to Eugene Garfield.) I knew about ISI, of course, but I didn't know (or forgot) about its email citation alerts. They come very close to the service I was describing, if only they covered citations published in any journal (not just ISI-indexed journals) and were available without charge to any user (not just those at ISI-subscribing institutions).
A brief response: Of course I agree with Stevan that authors should self-archive, and that the service I was describing would be easier to build if 100% of peer-reviewed research articles were on deposit (with accurate metadata) in OA repositories. And I imagine that Stevan agrees with my point that, until we reach that goal, the service will be thwarted by the difficulty of harvesting citations published in TA journals. My question was not whether to launch this service instead of working toward 100% OA, but who could launch this service, or make a significant start on it, before we reach 100% OA.
Update (1/29/09). From Michael Kurtz on the AmSci OA Forum:
Update (1/31/09). Christian Zimmermann of RePEc tells me that "RePEc has been notifying authors about found citations for several years already. Our CitEc project is analyzing bibliographies of all documents it can grasp in OA, plus bibliographies that some publishers provide. Interestingly, Elsevier explicitly prohibits RePEc from analyzing its articles." Also see the CitEc FAQ. From the CitEc home page: