Yahoo Hack Day, held on Friday in Building C of Yahoo Headquarters (and remotely from other Yahoo offices worldwide), helped me remember why so many of us are excited about what’s happening on the web today. After you peel away all of the extraneous layers, the core of innovation is five or six people building something they think is cool. And there certainly was a lot of that going on at Yahoo at the end of last week.

I walked into a room full of Yahoo employees patiently waiting their turn to show the project they’d just spent 24 hours building. There were a total of 102 projects submitted, and each team (ranging from one to seven Yahoo’ers) had a minute and a half to show off their stuff. In the end, trophies were given and pizza was eaten.

The tropies weren’t the only award, though, or even the most important incentive. Each project is carefully documented and tracked, and a few will evolve into Yahoo products or product features in the future. There’s big bragging rights associated with this, and it’s a sure way to make a name for yourself among your peers.

I had to agree not to write about specific projects I saw presented at the event, and I had a press escort at all times. I will say that I saw some really cool combinations of various web services (maps, search, Answers, flickr, music, del.icio.us, etc.) as well as some completely new product ideas.

One project really caught my eye (and I have permission to write about it) – Ian Kennedy, in Yahoo Corporate Development, re-skinned a Yahoo Research tool called “Buzz” that leverages economic theories to build predictive markets. Ian and his team (Stacy All, Yiling Chen, Raj Gopal Prased Kantamneni, Tejaswi Kasturi, David Pennock and Daniel Reeves) used the core Buzz project and built a predictive market on top of it that tracks all of the Hack Day projects. Yahoo employees can “buy” and “sell” shares in projects, eventually cashing out if the project is included in a public Yahoo product. Fun stuff, but with real technology and theory behind it.

Congratulations to the winners, listed below. And more congratulations to those that built stuff that we’ll see in future public products.

Winners:

Best Overall: Swati Raju, Dan Rose, and Peter Anick

Best User Experience: Deepa Joshi, Paul Yiu, Cecil Balzen

Most Money: Aaron Stein, Joshua Rangsikitpho, Sumit Chachra, Steve Spencer, Cody Simms, Dave Zito, Yu Shan Chuang

The “Why Did You Wait for Hack Day?” award: (a tie)
#1: Shankar Venkataraman, Subodh Shakya

#2: Gordon Luk, Mirek Grymuza, Vince Maniago

People’s Choice: Mega Hack Team (Leonard Lin, Gordon Luk, Edward Ho, Kevin Cheng, Daniel Raffel, Cameron Marlow, Jonathan Trevor