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Saturday, May 07, 2005

The Economist On The Long Tail Phenomenon

The Economist initiates coverage of the Long Tail phenomenon.The latest example, generating buzz among entrepreneurs, technologists and bloggers,is the idea of the long tail. The term is not new, having long been used in statistics to refer to a feature of power-law distributions, such as the frequency with which different words are used in English: there are a few common words that are used a great deal, and a long tail of increasingly obscure words that are used less often.We covered the long tail phenomenon sometime back where we noted that the future belongs to those that serve the millions of untapped niche markets as well as they serve the masses.

The Economist article points to some key points:
- Opening up those previously uneconomic niche markets should increase overall demand: as people are better able to explore niches,they are more likely to find things they like, and may well consume more of them. This will then shift some demand, at least, away from hits.
-The most profound implication of the long tail, however, is its impact on popular culture. As choice expands and people can more easily find niche content that particularly interests them,hits will be less important
: so what will people talk about when gathered around the water cooler? - the idea of a shared popular culture is a relatively recent phenomenon: before radio and television, he notes, countries did not operate in "cultural lockstep".

The Economist article also briefly discusses the significance of well thought of mechanisms to help customers find the associated and related products relevant to them. As we covered Joe Kraus view about the long tail effect on the search business and expressed the view that the real reason Excite went out of business is because we couldn’t figure out how to make money from 97% of our traffic. Clearly opportunities for investment and business lay in clearly working on these type of mechanisms to exploit the long tail effect.
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ThinkExist.com Quotes
Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"