McCain VP: Smart Money, and Crowd Sourcing, Is on Tim Pawlenty

“UPDATE 2: Sarah Palin’s reps were full of it. Palin, the 44-year-old, first-term governor of the Kodiak state is and presumably always was McCain’s VP pick after all. I’ll blog on this later to see when Palin’s prospects first popped on InTrade and how it progressed.“

“UPDATE:So much for Crowd Sourcing … Pawlenty says, it ain’t me, man. And so the InTrades went to Alaska Gov. Sarah Palin. Turns out a charter plane landed at the airport in Anchorage and ignited speculation that she was enroute to Dayton. Well her reps swear she’s headed not to Dayton, but to the Alaska state fair.“

It’s Thursday night, we’re watching Barack Obama and Joe Biden embark on their presidential bid, and we’re still waiting for John McCain to announce his running mate.

Sources tell news organizations McCain has made his choice, and the individual will be unveiled to the public Friday morning.

But someone already knows that McCain chose Tim Pawlenty, the 47-year-old governor of Minnesota. Or they’re pretty sure.

Pawlenty is the top choice on InTrade, the predictive markets platform that allows users to buy shares in possibilities–basically you’re making a bet that something will happen. InTraders were buying Pawlenty shares as fast as they could Thursday, sending shares of Pawlenty up 59.9 points to 78.3 (as of Thursday evening), meaning there is an 84 percent chance he’ll be the GOPer on McCain’s arm Friday morning at a rally in Dayton, Ohio.

Shares in Romney’s chances, the previous top pick on InTrade, dropped 36.9 points yesterday to 8.1. No one else cracks double digits. (For a better understanding of InTrade, read founder John Delaney’s interview with Freakonomics Stephen J. Dubner.)

The Insiders Have It

Devotees, like CNN’s Glen Beck, swear by InTrade, and vouch for some science behind it.

Like the stock markets it mimics, InTrade favors those who do their homework, know their market and … have insider information. (Frozen concentrated orange juice futures anyone?)

InTrade’s biggest bet came in 2003, when InTraders sent shares in the capture of Saddam Hussein through the roof beginning Dec. 1, 2003. Coalition forces announced Hussein’s capture two days later.

The word from devotees is that some in the know must have been trading shares.

It’s possible. Secrets are hard to keep.

Some McCain insiders might be playing the market here.

Or we all fell for a feint from some crafty pols. On Thursday Pawlenty was spirited out of Denver, where he was posted to help provide counterattacks against the Democratic Convention. He canceled participation in a news conference and other appearances, and political bloggers are all abuzz about what it means. Maybe we’re all just suckers.

What Sort of Business Tool?

What enterprise lesson can be garnered from the public’s best guesses on national politics? Simple crowd sourcing has its limits–humans–but it is another tool to add to the predictive analytics tool belt.

I can imagine …

“A pharmaceutical firm using an InTrade-like platform internally to allow employees to predict milestones along a product’s development–R&D, FDA trials, patent approval, marketing, release.A manufacturer connecting to its suppliers and distributors might anticipate strangled supply lines or foresee open distribution channels.A financial firm (I’m looking at you, Bear Sterns and Merrill Lynch) might have trusted the pleas of traders yelping that subprime mortgage markets were about to collapse had they seen employees across the board trading in that direction.“

The business applications of crowd sourcing are limited. Consider it taking a pulse, collaborating, a light in the tunnel.

What other uses can you imagine?