We invite you to join a new experiment we cooked up at Yahoo! Labs called Predictalot, a game that takes NCAA tournament pick ‘em to entirely new extremes.

Here’s how it works. You can invest virtual points on almost any prediction you can think of about the men’s college basketball tournament, like “Duke will advance further than Texas,” or “Every final four team’s name will start with the letter U.” For example, you can invest one point predicting that “there will be exactly 2 upsets in the Elite Eight” and, according to the current Predictalot odds, you’ll win ten points if you’re right.

You can keep your predictions and see how they turn out, or you can sell them at any time, even while you’re following the action on the court. How does that work? Think of your predictions like stocks that can be priced, sold and traded (for virtual points, of course) just like you’d buy and sell stocks, options and futures on the financial exchanges of the world. Predictalot offers hundreds of millions of such predictions, constantly computing prices for them all.

Throughout the tournament, the prices of all the predictions in the system will go up and down based on what’s actually happening in the tournament and on what everyone else thinks those predictions are worth. Based on the value of the predictions you invest in you’ll accumulate points and climb your way to the top of the Predictalot leader board.

In technical terms, Predictalot is what is called a combinatorial prediction market. Some of us at Yahoo! Labs, along with academics like George Mason University professor Robin Hanson, have been studying and writing about them for quite some time, and dreaming about trying them out in the real world. We built the first version of Predictalot during an internal Yahoo! Hack Day. And this year we used the Yahoo! Application Platform to finally build a public version of the game. Like any Yahoo! App, you can install Predictalot to play right on the Yahoo! homepage. (Note that we’re not special in that regard: anyone can develop a Yahoo! App that’s available to millions of Yahoo! users — there’s good sample code, it supports YUI and OpenSocial, and it’s easy to get started. Seriously, try it.)

After some fits and starts, a few late nights, and eventually a few all nighters, we’re proud and excited to go live with Predictalot, version 1.0. I can’t rave enough about the talent and dedication of the research engineers who gave the game a professional look and feel and some real production speed. They turned a very pie-in-the-sky idea into a reality. We have a lot feature ideas in mind for future versions, but the core is in place and we hope you enjoy the game.

With 9.2 quintillion outcomes, or nearly as many as the number of individual insects on Earth, Predictalot is to our knowledge the largest prediction market ever built. We hope that with your participation it will prove a great test to the limits of what the wisdom of crowds can produce.  We’d also like to pave the way for the serious use of combinatorial prediction market technology in a host of other arenas down the road.

Smarter markets will be extremely valuable in a variety of applications, especially online, where markets and exchanges decide prices and allocations for all kinds of goods and services, including advertising inventory. And more and more, the matching of buyers with sellers – which is the core function of any market – is requiring sophisticated algorithms, machine learning and optimization technology. Predictalot attempts to help us better understand these dynamics while also giving us the great satisfaction of picking Duke to go all the way.

(Duke alum) David Pennock and the Predictalot Team:
Mani Abrol, Janet George, Tom Gulik, Mridul Muralidharan, Sudar Muthu, Navneet Nair, Abe Othman, Daniel Reeves, Pras Sarkar

P.S. If you’d like to learn more about the technology hidden in the engine and the scientific factors at play, read our post about Predictalot on the Yahoo! Research website. And don’t forget to also check out all of Yahoo!’s fun tourney experiences.

Another Open Hack has come and gone, leaving more than 300 exhausted developers, 400 pizza boxes, 1200+ donuts, and nearly 500 cans of Red Bull in its wake. We’ve hosted a few of these before, so we had some idea of what to expect, but the great thing about Hack Day is you never know what’s going to happen (including executives getting down on stage to Girl Talk).

We were blown away by amazing ideas and hacks. After 24-hours of working through the night on new creations, our hacker guests demoed more than 45 hacks to our panel of judges –- internal: David Filo (Chief Yahoo!), Ash Patel (EVP, Audience Products Division), Cheryl Ainoa (VP, Media Engineering); and external: Matt Mullenweg (Automattic/WordPress), Om Malik (GigaOm), Rashmi Sinha (SlideShare) and Jeff Clavier (SoftTech VC).

We saw some comedy, some shtick, and some basic crowd appeal, but the overall winner was truly a hack that will enhance a user’s experience on Yahoo!, taking advantage of the sneak preview of the Open Mail Development Platform that was in effect for the weekend. A few developers from Xoopit created a Yahoo! Mail application that enables users to more easily share multimedia within their inboxes.

Prizes were also awarded in other categories, including some that were invented on the spot by impressed judges. These ranged from Best Technical Hack (officially called “Filo’s Technical Merit”) to Best User Experience to Most Prolific to the Bleeding Purple Award, which went to the team that used an incredible number of Yahoo! services to power their hack. Om even created the GigaOm award – an invitation to the upcoming Mobilize conference – given to the creators of “Where are My Drivers?”, an application for small business owners to track location and communicate with their delivery vehicles. The full list of winners can be found here.

It was a blast to meet hackers from around the world and talk tech, get creative and code until our eyelids drooped. We had developers join us not just from Silicon Valley, but from Brazil, Canada, England, India, Israel, Korea, Spain, and Taiwan as well. Three hackers even won a contest to come from Malaysia, the Philippines and Singapore to show their stuff.

And that’s just a taste of the buzz out there. If you’ve got time to kill, search for #hackday on Twitter or “openhack08” on Flickr – you’ll find a bonanza of more than 2000 photos and 400 tweets. Here’s a sampling of what people were twittering:

• #hackday was excellent.
• #hackday was awesome!!
• Had an awesome time at #hackday. Ate, danced, drank, met and talked to some awesomely smart people. Girl talk ROCKED.
• Totally enjoyed the reunion aspect of #hackday.
• This #hackday is off da hook.
• My cup runneth over of yahoo technologies #hackday.

The next Open Hack kicks off in Taiwan later this week – stay tuned to developer.yahoo.com for an Open Hack coming to a city or country near you!

Chris Yeh
Head of the Yahoo! Developer Network

Two years ago, we opened our doors to the community of outside developers that had been “hacking” on Yahoo!, and invited them to show their stuff and create new products based on our technologies. Over the course of 24 hours, hundreds of developers attended workshops on Yahoo! technologies, pitched tents, watched a live performance by Beck, ate 400 pizzas, coded all night long, and presented 54 hacks to a judging panel of Yahoo! executives and Internet industry leaders.

Since then, we’ve taken Open Hack around the world, with hack days in London –- where lightening struck twice and it rained indoors — and in Bangalore.

This weekend, we’re getting ready to welcome hundreds more developers back to our campus in Sunnyvale for Open Hack 2008 –- including the winners from five university hack days we held last year. We’re eager for our guests to put their ingenuity and imagination to work as they poke and prod and hack away on our products and services – including some new platforms for developers. We thoroughly expect to be blown away again.

During the hack-a-thon, we’ll give developers a sneak preview of the first Y!OS components. Back in April, we announced the Yahoo! Open Strategy (Y!OS), a set of tools and platforms that will fundamentally change how Yahoo! works, opening Yahoo! up to developers to take advantage of the social aspects of our most popular products. With Y!OS, developers can create applications and features (many we’ve never even thought of) for our network and our consumers.

The Y!OS sneak preview will include the ability for developers to check out what their new applications look like in Yahoo! Mail and My Yahoo! and take advantage of social connections on Yahoo!. These components will be available only for the weekend – giving developers a taste of what they will soon be able to build and share with the world. Stay tuned for their public debut in the coming months.

Our first Open Hack was described as “transformative,” “something special,” and “off the hook” but what struck me most was the creativity and camaraderie. The stuff of our roots. Jerry and I are dedicated to keeping that spirit of openness and innovation alive, but we know that we can’t come up with all the great ideas ourselves. We can’t wait to see what is created this weekend. Hackers, bring it on.

David Filo
Chief Yahoo

Today marks a 102-year anniversary that fortunately very few people remember… when a 7.9 tremblor rattled streets, buildings, and teeth in San Francisco. After comfortably denying it could ever happen again, check out our earth-shaking updates:

• Your city is big time now: Ever been frustrated that your city doesn’t rank when it comes to online city guides? Seeth no more. Whether you live in Kailua, Kinnelon, Killingworth or Kennebunkport (or any large metropolis around the world, for that matter), you’ll find your city in the new Yahoo! Our City. It dynamically scrapes what’s available on the Net — Flickr photos, news, events, weather, videos, blogs, maps — and melds them together in a single comprehensive snapshot. The fruit of a Yahoo! India Hack Day winner, it’s a city guide of the people, by the people, and for the people. For every citizen around the world. More here and on their blog.
• MyBlogLog Tweets:The team at MyBlogLog is embracing the 140-character Web. They’ve launched their own Twitter account to help keep you up to speed on goings on, as well as make it easy for you to lob over comments and quick questions. So go follow MyBlogLog and don’t skip a beat. More here.
• Even hackers have taste: If you’ve spent time at the Yahoo! Developer Network in the past, you might have noticed its radical face lift. Not only does it have a clean new 21st-century look (we didn’t want to rush anything), it now has “improved navigation and information architecture built to meet the needs of the lazy and impatient developers” among you (their words, not mine). You’ll also find more timely content, with four content tabs about the latest and greatest at all times. There’s also an Upcoming events stream for rubbing elbows with Tech Yahoos and lots of YDN Theater goodness. We even used our own popular YUI library components to rebuild the site. It’s all about eating dog food around here.

Subscribe to the RSS feed (or add it to My Yahoo!) to get this Product Pulse every week.