The Wisdom of Crowds and other extraordinary popular delusions....

Whisper who dares....that sacred cow of the Social Media play, the Wisdom of Crowds, is actually being questioned by those who have benefited most hugely from it so far - Read Write Web realises that (referring to the gaming of Digg):

SitePoint's experience is an example of herd behavior or groupthink, where the Digg group acted blindly on poor information, without rationally thinking it through. This is a problem with the wisdom of crowds concept: if unchecked, rather than coming to the best conclusion based on the wisdom of the group, a crowd can come to the worst conclusion based on dumbness that spreads from a single bad node.

This is exactly the problem with Social Media and Wisdom of Crowds stuff - it can be swayed by flashes of Mob Rule. (The madness of crowds)

It's also not necessarily that accurate. In the UK, before Pandora was stopped, I far preferred it to Last.fm because it actually gave me the music I like via its Music Genome database, whereas Last.fm gives me the music tastes of other people who like what I like - not the same thing at all. We both may like A, but I love B and you detest them. With a social media selection, you are going to get B!

Now, RWW lays out 4 rules to mitigate this:

Last year, we laid out a set of rules to get the most out of a crowd. It might be a good idea to revisit those here:

1. Crowds should operate within constraints. To harness the collective intelligence of crowds, there need to be rules in place to maintain order.
2. Not everything can be democratic. Sometimes a decision needs to be made, and having a core team (or single person) make the ultimate decision can provide the guidance necessary to get things done and prevent crazy ideas and groupthink from wreaking havoc on your product.
3. Crowds must retain their individuality. Encourage your group to disagree, and try not to let any members of the group disproportionately influence the rest.
4. Crowds are better at vetting content than creating it. It is important to note that in most of the above projects, the group merely votes on the final product; they do not actually create it.

But in a Social Network, delivering user mediated decisions, point 3 is a tough gig - everybody can see everybody else's reaction, so keeping individual decisions going is hard.