Web Watch

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The “Long Tail of the Internet” is a term used to describe the revenue potential the Internet provides for the millions of small businesses and entrepreneurs that find ways to make money from the Web in less obvious ways than Yahoo! or Google. This tail, with millions of sites, makes the fragmentation of cable television seem pale in comparison. If you rank all Internet sites by revenue on the Y-axis, the larger portals make up the “head” of the graph with the most revenue falling to the large players, but the graph goes out to the right with millions of revenue generating sites making up the X-axis, or the “long tail.”

When it comes to online advertising though, the tail is not as long as originally thought.  According to Jeffrey Rayport, chair of new media consultancy group Marketspace, the 10 biggest Internet publishers accounted for 99% of the gross online advertising revenues in 2006.  They accounted for 95% in 2005.  So as the long tail grows, with more targeted Web sites than ever, the advertising investments continue to move toward the head, or the bigger portals. The benefits of scale appear to be more compelling than the ability to allocate online budgets to a wider group of targeted Web sites.

Vertical Ad Networks like e-Healthcare Solutions, appear to be relatively unaffected by the consolidation of spending, by servicing the medium to long-tail publishers.  R.J. Lewis, president of e-HealthCare solutions generates much of his company’s revenues from niche areas where the big portals have little to offer.

“The long-tail is all about niche targeting,” Lewis said. “ There is a Web site and an online community evolving for just about every topic imaginable.  The Web presents a unique ability for people with similar medical interests or disease conditions, no matter how niche, to connect and communicate.”

Dan McKillen is president of the HealthDay news service

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