Prediction Markets - Tech Trend to watch?

Almost two years ago, I attended a Microsoft manager's presentation at a local PMI Chapter meeting. The topic was how Microsoft uses "Prediction Markets" to predict project milestone dates. Last week, I was reminded of this by this Freakonomics blog entry on several presentations and panel discussions having to do with Prediction Markets at last week's American Economic Association conference in New Orleans.

This post, from December 2006, in a ZDNET blog rightly points out that prediction markets are starting to gain traction in corporate settings. The post has several examples of the most popular prediction markets in addition to giving due credit to James Surowiecki and his book, "The Wisdom of Crowds".

Google's Bo Cowgill has been at the forefront of that company's work in prediction markets, to forecast product launch dates, new office openings, and " many other things of strategic importance to Google". By September 2005, more than a thousand Googlers have bid on 146 events in 43 different subject areas (no payment is required to play).

The venerable consultancy, McKinsey has weighed in also. In the latest McKinsey Quarterly, they have tabbed predictive markets one of the eight business technology trends to watch.
"Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models. From “ideagoras” (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches, ubiquitous standards-based technologies promote aggregation, processing, and decision making based on the use of growing pools of rich data".

Definitely, something I will be keeping an eye on and following with interest.