As someone who is working for his second startup, I like to read about what kinds of ideas are being pitched by startups at conferences like Demo, which is going on this week.  Computer trade publication InfoWorld is running a story on Demo participants whose ideas revolve around prediction.  One of the featured startups was Hubdub, a company whose website attempts to predict outcomes on future events based on quasi wagers placed by site participants.

Predicting non-sports outcomes via wagers isn't a new idea itself.  The eerie accuracy of such markets motivated the Pentagon to explore the creation of terrorism futures markets in 2003, but that idea got axed after it created a lot of controversy.  The Iowa Electronic Markets website has hosted political prediction markets for many years.  On the commercial side, Intrade operates markets for a wide variety of events, from the serious to the superficial (last year they had markets for American Idol).

From what I can tell, Hubdub distinguishes itself from these other markets in two areas:
  1. The markets are strictly binary outcomes (yes/no, one thing/the other).  Other predictive markets may have as many contracts as there are distinct outcomes.
  2. There is a leader board that ranks top participants.  Other predictive markets are anonymous environments.
The second point is significant because this is what Hubdub is using to draw participation.  Wagers are made in terms of a psuedo currency, which is a measure of the accuracy of the participant.  A good record of accurate predictions raises the visibility of the participant.  Quoting the article (emphasis mine):
The point of the game is to see who comes out right most of the time. If you are one of those folks, according to Hubdub officials, you will obviously gain street cred in your area of expertise -- politics, stock market, or technology, for example. Besides gaining some form of respect from your peers, credibility may also lead to more users coming to your Web site or blog. This, in theory, could be shaped into a business where a person's analytical capabilities are worth paying for.
Hubdub's angle on reputation building is interesting.   When pundits discuss the idea of digitizing reputations, they often invoke the dystopic vision of "reputation servers" as described in Bruce Sterling's novel Distraction.  Hubdub's meritocratic path to distinction offers up a kinder and gentler vision of the future.  It's your actions, not other's words, that determine your rating.

The idea of giving away predictions in exchange for the potential of a better reputation and more inbound traffic reminds me of Eric S. Raymond's discussion of reputation in gift cultures in his essay Homesteading the Noosphere where he writes (emphasis mine):

There are reasons general to every gift culture why peer repute (prestige) is worth playing for:

First and most obviously, good reputation among one's peers is a primary reward. We're wired to experience it that way for evolutionary reasons touched on earlier. (Many people learn to redirect their drive for prestige into various sublimations that have no obvious connection to a visible peer group, such as "honor", "ethical integrity", "piety" etc.; this does not change the underlying mechanism.)

Secondly, prestige is a good way (and in a pure gift economy, the only way) to attract attention and cooperation from others. If one is well known for generosity, intelligence, fair dealing, leadership ability, or other good qualities, it becomes much easier to persuade other people that they will gain by association with you.

Thirdly, if your gift economy is in contact with or intertwined with an exchange economy or a command hierarchy, your reputation may spill over and earn you higher status there.

The context of Raymond's essay is the "hacker culture" of open source development, and I could see where someone might try to argue holds true for Hubdub's predictive markets.  I'm not totally convinced that this is the case.  The basis of my skepticism is drawn from the same passage a few sentences later:
The main 'peculiar condition' is that the artifacts one gives away (or, interpreted another way, are the visible sign of one's gift of energy and time) are very complex.
Casting votes to black-and-white questions doesn't take a lot of energy and time.  One could do as little as flip a coin to choose an outcome.  The most valuable answers -- the kind that people pay for counsel -- usually involve weighing a question that cannot be answered in a yes-or-no form.  The value is in discerning the shades of gray.

I think this issue is of great significance to a bloggers looking to elevate their profile.  Rather than trying to find a shortcut to drive traffic to your blog, consider writing high quality posts that answer the shades-of-gray questions your customers might face.   Why?  Because the substance of these posts are the artifacts of energy and complexity that build a real reputation.