Let me quote a couple of sections to answer your question.
From Chapter 1:
Collective intelligence is about making your application more valuable by tapping into �Wise crowds�. More formally, Collective Intelligence (CI) as used in this book simply and concisely means,
�To effectively use the information provided by others to improve one�s application�.
This is a fairly broad definition of collective intelligence � one which makes use of all types of information, both inside and outside the application � to improve the application for a user. This book introduces you to concepts from the areas of machine learning, information retrieval, and data mining and demonstrates how you can add intelligence to your application. You will be exposed to how your application can learn about individual users by using their interactions and correlate their interactions with those of others to offer a highly personalized experience.
From the preface:
Remember, applications that make use of every user interaction to improve the value of the application for the user and other potential future users, and harness the power of virality, will dominate their markets. This book provides you with the set of tools that you will need to leverage the information provided by the users on your site. Whatever may be the forms of information available to you; this book will guide you in harnessing the potential of your information to personalize the site for your users. Focus on the user, and you shall succeed. For collective intelligence begins with a crowd of one.