Call the trend what you will: crowdsourcing, democratization, decentralization, the mechanical Turk. It all riffs on the fast-growing idea of extracting the value out of people’s voluntary participation online. When Web 2.0 was first identified as a hot new buzzword it was all about AJAX, web-based software, and the Internet as a platform. But that’s shifting – it now seems to really be about tapping user participation. We finally understand that the latest round of web innovation is not in the technology, it’s in the people. Web innovators are figuring out new ways of organizing people to get stuff done. And the world will never be the same. Unless you’ve been sleeping at the wheel, you’ve already read about this. I’m more interested in what people aren’t writing about… yet.

Now that innovators have built the big new participation sites, the next round of discussions will be about what's working and what’s not. There are at least three big craigslist copycats and a dozen content contributor networks. Everyone’s plugging in a wiki or trying to apply the wisdom of crowds, but soon there will be industry head scratching around which models appear most functional, and why. How do we best apply collective contributions to create value? One person likes the model of EBay while another thinks Wikipedia is the answer, but no one model is probably better than another at its core.

The realization I am coming to is that each bottom-up business problem is unique and demands its own participatory framework. Each way of inviting user contribution begs a different model. How should we best incentivize our members? Should we expose peer ratings? List with ranking algorithms? Offer Tagging? Abuse flags? Meritocracies? What about contextual advertising? How can we best avoid gaming?

The participatory feature set is exploding. The concerns are new, but the decisions are still critical. This is a brave new world, and not many have figured it out yet. Those that do will win this round. Those that understand the deeper patterns will win in the long run.