DEMOing Hubdub, a Prediction Market for News

Certainly this is the first time that crow's entrails have made an appearance on stage at DEMO, but Hubdub offered up much more than a baggie of guts. I was able to try out the closed beta of this service before DEMO, and I was intrigued by the concept and impressed by the implementation.

The core concept of Hubdub is to marry news aggregation with prediction markets. Each user starts with 1000 "Hubdub dollars" to use to bet on the outcome of news events. Examples of questions in the system now include the winners of the GOP and Democratic presidential nominations, the likelihood that Jennifer Lopez is about to give birth, and the probable location of the remnants of a spy satellite falling out of orbit. Each is paired with a news story on the topic, and users select the outcome they think most likely. If they prove to be correct, they win Hubdub dollars in return.

Users can create their own questions, or use the site as a way to stay on top of news in various categories. There's a leaderboard that enables everyone to see who does the best job of making predictions, which seems to be the way people are rewarded for their picks since there's no apparent way to exchange Hubdub dollars for anything of real world value.

Like any prediction market, Hubdub will depend on achieving a critical mass of users to help enable the most accurate predictions possible. The interface they provide is slick and easy to use. It is not overly complicated and it clearly encourages users to speculate. It also rewards daily visits to the site by awarding 20 Hubdub dollars each day that a user logs into her account -- a smart approach to building stickiness.

Hubdub is the brainchild of four guys in Edinburgh, Scotland -- a far cry from Silicon Valley indeed. The DEMO presentation was handled ably by Nigel Eccles and Tom Griffiths.

The site is now in public beta and you can check it out at Hubdub.com.