What exactly is crowdsourcing?

In recent readings, I've come across a new term first coined in Wired magazine. As mentioned in the the title, crowdsourcing has become a popular trend in the corporate playing field. As to my understanding, crowdsourcing usually takes place when a company is faced with an initial task or problem that must be solved. Rather than spend 100K+ to bring in a contractor, the company posts the issue online as a sort of 'broadcast" to all takers. Now, is there a difference between this and outsourcing? Quite honestly, you shouldn't be too worried, as crowdsourcing is more contractor based. But what does it mean for those contractors who are being passed by for a cheaper alternative? Who else benefits from crowdsourcing other than the company? In what ways do you think that this will this impact employment?

I ask you fellow students, what is your take on this?

http://www.wired.com/epicenter/2009/03/is-crowdsourcin/