The long tail is a concept popularized in an essay by , that points out a characteristic of Internet commerce–the ability to profit from business markets as small as just a handful of potential customers.
Yet the business of monetizing massive numbers of small markets has been going on for far more than a decade, long before Mr Anderson christened it with a term.
The Internet’s largest businesses such as Google, Yahoo, Ebay and Amazon, have all executed very profitable long tail business models. This was called small and medium business (SMB) markets. These days it is the business of small (BS) markets, this is the long tail.
To monetize tiny markets companies have to figure out how to attract customers. Marketing expenses are traditionally a very large cost of doing business. A traditional approach would wipe out any potential profits in small markets.
The current generation of Internet giants has figured out an even easier way to gain free content, and also much better content–content that is of huge interest to individual users, and is individual to those users, which means lots more repeat visits. That’s what is called user generated content and that’s what every Internet company wants.
The accepted notion these days is that the long tail represents an untapped bonanza of business opportunities. But I’m not so sure following a discussion I had this week with David Scott, the CEO of 3PAR, a top supplier of data storage systems for massive data centers.
Here is part of that interview . . . (more) And there is more to come on this topic.
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