The ‘Wis­dom of Crowds’ the­ory, as pop­u­larised by James Surowiecki’s 2004 book of the same name, is an important—if misunderstood—theory that has influ­enced a lot of recent online ven­tures that rely on social net­works and col­lab­o­ra­tion to work intelligently.

For those who want to take advan­tage of the wis­dom of crowds for their own ven­tures, Derek Powazek (who has worked at least one such site; Tech­no­rati) offers a primer on the wis­dom of crowds the­ory and how to suc­cess­fully imple­ment it online.

The web, with its low bar­rier to entry and per­me­able social bound­aries, is the ulti­mate medium through which to explore the finer points of the wis­dom of crowds. You’re sur­rounded by online exam­ples: Google’s search results. Bit­Tor­rent. The “Most E-mailed” sto­ries on your favorite news site. Each is pow­ered by wis­dom gleaned from crowds online.

You need a few things to enable online crowds to be wise.

For other related infor­ma­tion (i.e. how attempts at har­ness­ing col­lec­tive intel­li­gence suc­ceed and fail) the Wikipedia entry for Surowiecki’s book is a great place to start.