Crowdsourcing is the act of outsourcing tasks, traditionally performed by an employee or contractor, to an undefined, large group of people or community (a crowd), through an open call. Crowdsourcing has proven to be a very important and real business model if gotten right.
The basic idea is to tap into the collective intelligence of the public at large to complete business-related tasks that a company would normally either perform itself or outsource to a third-party provider. There are so many startups that are build around crowdsourcing and are successful. These companies earn over $100M in revenues, and I believe there are many out there who are generating a lots of revenue with this model.