Art Hutchinson blogged a couple of unrelated posts that mentioned Prediction Markets peripherally and used the occasion to make some interesting points himself. This is one of those rare cases where there’s more material in the commentary than was evident in the sources. If you follow the links back, you’ll find somewhat interesting blog entries that barely touch on the ideas that Art took out of his encounter with them.
It looks like rumors must have abounded in regards to Yahoo!’s acquisition of flickr before the deal was final. The deal was announced late on March 20th, but Yahoo!’s buzz game was hopping by around the 16th. If you look at the chart here, you’ll see that the trading price shot up from 10 to 20 in the days preceding the deal. Unfortunately for those who made the bets, the underlying statistics that set the payoff are searches on Yahoo!, which didn’t respond until the 21st. The masses didn’t know about the rumors, but should have been paying attention to Yahoo!’s buzz.