Forbes 5/24/04 Mass Intelligence, As Google understands, crowds do a better job of decision making than individuals. by James Surowiecki
Google has succeeded for a simple reason: It regularly finds the Web pages that are most valuable and puts them at the top of the list. The heart of the technology that lets it do this is the PageRank algorithm (after cofounder Larry E. Page), which essentially asks Web page producers to vote on which other pages are most worthwhile. Each link to a page counts as a vote. Google is a republic, rather than a pure democracy; sites that have more links into them are effectively given more voting power. But the principle is fundamentally democratic--let the masses decide. Given the Wild West nature of the Web, you'd think that this would lead to chaos or irrationality. Instead, it leads to a remarkable order.
How does this work? What Google is relying on is something I call the wisdom of crowds: Under the right circumstances, groups are smarter, make better decisions and are better at solving problems than even the smartest people within them. On any one problem a few people may outperform the group. But over time collective wisdom is near-impossible to beat. No one, you might say, knows more than everyone.
Google's success, then, is far from an interesting quirk. Instead, it's relevant to just about any problem-solving situation. As long as you're asking a question that has a right answer--including questions like, "Should we acquire this company?" or "Is there a market for this new product?"--and as long as people are making judgments on their own, collective intelligence will get you the best answer possible. Google, and it shall be given.
Kottke.org 7/4/04 The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations by James Surowiecki
Wired 6/04 Smarter Than the CEO By James Surowiecki
Forbes 6/1/05 Q&A: James Surowiecki