Others are griping about this being free labor but consider that often times these types of problems have already been contracted out to someone and have been in development for some time. They may not necessarily be recruiting students to give them a "freebie" but rather someone saw this could be a good learning experience for students and had enough follow through to make it happen. It makes a contact to a university, lets students get real world experience (and resume builders), and there's a little incentive.

Should some of that incentive go to the student(s)? Sure, but I imagine there's legal hoops that are a mess to jump through for that and winning != implementation. Like I said, they've probably got someone contracted for the task and the student could build a job opportunity to said company from it.