Here is another interesting link from Jozef Imrich, in State of the Blogosphere March 2005, Part 3: The A-List and the Long Tail. David Silfry, CEO of Technorati, first explains who Technorati rates blogs based on inbound links as a measure of influence. He also points that influence does equal truth of content. David then shows a chart that illustrates the top sites with inbound links. There are a number of blogs, along with the mainstream media ones such as The New York Times.
He goes to add that this A list is less important than the long tail of the many bloggers that get a share of small “markets” of conversations. There is a nice link to the wikipedia’s (leader in the long tail area) comprehensive explanation of the long tail. I really liked the mind twister quoet form an Amazon executive (another long tail leader).
"We sold more books today that didn't sell at all yesterday than we sold today of all the books that did sell yesterday." The article then adds that “Wikipedia has many low popularity articles that, collectively, create a higher quantity of demand than a limited number of mainstream articles found on a professional site such as Britannica.”
Then a very clear explanation of the long tail is offered in the Wikipedia article.
“The key factor that determines whether a sales distribution has a Long Tail is the cost of inventory storage and distribution. Where inventory storage and distribution costs are insignificant, it becomes economically viable to sell relatively unpopular products; however when storage and distribution costs are high only the most popular products can be sold. Take movie rentals as an example: A traditional movie rental store has limited shelf space, which it pays for in the form of monthly rent; to maximize its profits it must stock only the most popular movies to ensure that no shelf space is wasted. However the advent of Netflix's online movie rental service changed this. Because Netflix stocks movies in centralized warehouses, its storage costs are far lower and its distribution costs are the same for a popular or unpopular movie. Netflix is therefore able to build a viable business stocking a far wider range of movies than a traditional movie rental store.”
There is much more in the wikipedia article and I encourage you to go there. This econimics of many small numbers due to lowering cost of coomunication is aligned with Tom Malone’s thesis in The Future of Work. Tom suggests that the new economics of communication will led to business de-centtralization in many forms. Tom mentions that over 435,000 people earn their principal living through eBay. It you counted these eBay sellers as employees, it would be the fifth largest “employer” in the US ahead of McDonald’s and just behind Wal-Mart.
This increased decentralization of business practices is taking a variety of forms and blogs can support many of these new approaches to business. Larger organizations, such as IBM, SAP, and Microsoft use blogs to provide a more informal and personal connection with their customers, driving public relations down to the individual employee level. Small organizations are better empowered to reach new markets and remain viable, independent players as they achieve the global reach of large organizations. Inside organizations of all sizes, management layers are being reduced to gain greater efficiency and blogs can play a role here, also. For example, Tom Malone observes in The Future of Work that:
“When the teams need to exchange information, they often don’t need to involve managers at all. Instead, they communicate directly, either in face-to-face or electronically. In early 2003, Google, started using a system to keep Web Logs, or blogs, that chronicle their day-to-day activities, discoveries, and problems. Within weeks, the use of these online diaries had exploded. By reading blogs, the different teams could keep track of one another’s work and find issues they needed further discussion – with less need for top-down control by centralized managers.” (p. 41)
It will be interesting to see where this de-centralization trend goes. We can now get more options for products such as movies, more options for news, such as blogs. It puts greater responsibility for selecting the good from the bad on all of us, whether it is movies or news. Let’s hope we are up to the task.
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