Workers, Place Your Bets

A little over a month ago, a group of Yahoo! executives faced an enviable challenge. More than 200 employees had just completed the company's annual Hack Day, where small teams have 24 hours to create, refine, and then pitch new products or services that they hope Yahoo will bring to market. Judges picked their favorites, but the company needed to decide which ones merited further development.

In years past, that decision was left to Yahoo (YHOO) executives. But this time, the company wanted help from the rank and file. So it doled out wads of play money and encouraged employees to place bets on which products would fly with the public. It used a system customized by Yahoo principal research scientist David Pennock, one that works a lot like a stock market. Yahoo used the data to help identify which ideas could be made into more complete prototypes. "As a product organization, you hope to remove the burden of predicting from one product manager," says Prabhakar Raghavan, head of Yahoo Research.