Internet Business Explained

To deeply understand success on the Net, a must read is:  “The Long Tail: Why the Future Is Selling LESS of MORE” by Chris Anderson. 

The Long Tail Theory proposed by Chris Anderson, past executive editor of WIRED magazine  demonstrates the new Economic Principles impacting our world.

In the most important business book since the Tipping Point, Chris Anderson shows how the future of commerce and culture isn’t in hits but in what used to be regarded as misses-the endlessly long tail of niche products in the demand curve.

“It belongs on the shelf between the Tipping Point and Freakonomics.” Reed Hastings, CEO Netflix

“Anderson insights…continue to influence google strategic thinking in a profound way.” Eric Schmidt, CEO, Google

“Anyone who cares about media – indeed, anyone who cares about our society and where it’s going – must read this book.” Rob Glaser, CEO RealNetworks

“Technology and the Internet are making the world a smaller and more connected place. The Long Tail is the first book to explain exactly how the ability to reach markets creates big opportunities.” -Terry Semel, CEO, Yahoo!


If you understand The Long Tail, you understand the future of small business, how you fit in, and how to capitalize upon it.

So it’s really important to understand it. If you skip understanding this concept, you do yourself and your small business a disservice.


The capsule summary…


  • In the physical world, there isn’t enough shelf space to carry everything for everyone. As a result, the industrial business era has been mostly about a small number of mass-produced-and-sold products, the “head of the long tail” (red part of the graph).

The digital era turns the tables on traditional thinking about supply and demand. We’ve moved into the (yellow) long tail of the curve. That is the world of infinite niches. 

As a small business person, it is your world. You both live in it and you market to it.

The Long Tail describes the “three driving forces” that you must understand to master it…

 Long Tail Essentials 

  1. Tools Of Production: Hardware and software put product creation into the hands of everyone. For example, flip-cams and smartphones enable millions of budding Tarentinos. Software empowers people to share their knowledge in the form of Web sites and blogs. The result? An exponential explosion in niche products.
  2. The Internet Aggregators Aggregators pull “products” together, one offer all in one spot. For example, iTunes aggregates music, one offer to consumers. Google AdSense pulls publishers together, on offer to advertisers — in this case, the product is the Web site.  Advertisers from General Motors to Stan’s Local Body Shop can filter through Google’s aggregation of publishers and place ads across a wide variety of sites related to what they want to sell.
  3. Filtering Software That Connects Supply And Demand This enables consumers to find those high-quality, produced(#1)-and-aggregated(#2) niche products. For example, are you planning a vacation to Anguilla? Do a Google search to find great sites about Anguilla. See the ads on those sites? Click! Your interest earns income for both Google and the site-publisher.

The Long Tail of Business 

Use the three drivers to reach niche audiences that were invisible 15 years ago. Easy access to your globally dispersed “one-of” customers, together with free storage and near-free distribution, opens a world of opportunity. 

In the words of the author…Long Tail marketing treats consumers as individuals with unique interests and needs. The long tail (in yellow) indicates smaller and smaller volumes of each product sold (the y axis) for an ever increasing number of “nichier” products (as you move farther to the right). Small business thrives in the long tail.

You only need a few thousand people in the entire world to be interested in what you offer. Want to video-blog? NBC or FOX requires an audience of millions to be profitable. You, though, can profitably blog to a passionate audience of “one-sies and two-sies” (to paraphrase Mr. Anderson). So grab the stage. Compete!

Markets are fragmenting into near-infinite niches. Even the niches have niches… 

Yes, each niche has its own long tail… a “mini-tail,” the author calls this, “each of which is its own little world.” This has major implications for your small business. In case this sounds like business nirvana, there is a catch. Neither the Internet nor the long tail suspends the basic laws of sound business practice. Consider these sample truisms. 

  • Sell a great product
  • Conduct yourself ethically
  • Care

If anything, principles like these are amplified 1,000-fold. Why? Because customer power is amplified 1,000-fold. Conduct yourself badly and “Long Tail Driver #3” will filter you out… and fast. 

While Driver #1 makes it easier than ever to create and produce, it is not enough. You must produce a high-quality product. Once you achieve that, you must “convince” Driver #3 (the “filters”) to send demand down that long tail to find you.

 What about Driver #2? Get aggregated. For example, Google aggregates you’re passionate site about container gardening with others about gardens and plants (broader). It then offers your “product” (through AdSense Ads on your site) to gardening store advertisers. 

But be more than an “aggregatee.” Become an aggregator. Garden lovers find your site through thousands of search terms — yes, thousands, each looking for a specific gardening related topic. They are your long tail. 

When you become an aggregator, you own your business in powerful new ways. 

Master all three “Long Tail Drivers” to succeed online…


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