Saturday, March 28, 2009

Long Tail Yes, But Perhaps Not What You Were Expecting

In recent years much has been made of the implications of the "long tail" theorem, the notion that digital technology, digital goods and the Internet make possible a vast shift of commerce from the few large firms in any category to many hundreds to thousands of other firms.

Search market share indicates that the basic underlying theorem, the Pareto Principle, commonly understood as the "80/20" rule, does indeed operate.

But not in the ways some might predict. There is a search long tail, with four providers at the head of the curve, and then several score other smaller providers forming the tail.

Unfortunately, it does not appear that market share is much different from what might predict for physical goods. In search, as elsewhere in life, 20 percent of providers have 80 percent of the market share. In this case, a few percent of providers have 99 percent share.

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