Kevin Maney:

At its most basic level, the wisdom of crowds — let’s call it WOC, so I don’t have to type as much — means that the aggregated thought and knowledge of thousands or millions of people can be smarter than trained individual experts.The WOC has been around forever — it’s what democratic elections try to tap into. But the Net takes it to a whole new level. “The Internet provides a mechanism to get lots of diverse opinions and aggregate it in a quick and cost-effective way,” [Wisdom of Crowds author James] Surowiecki tells me.

So if a company can use the Net to tap the collected intelligence of its employees, the employees will make better decisions than the CEO. IBM, Google and others have tried this. Wikipedia, written and edited by tens of thousands of unpaid contributors, should be better than an encyclopedia written and edited by specialists. News sites such as Digg, which lets users vote stories to the front page, should surface the best stuff more effectively than professional editors.

Except it doesn’t always work that way.

Maney goes on to detail speed bumps that Digg and Wikipedia have run into. It’s a good overview — read the whole article.