One of the cornerstones of Web 2.0 is Chris Anderson’s Long Tail economic model, which argued that the Internet had introduced a fundamental, and democratizing, change in the economic model. Contrary to a traditional power law, where 20% of products sold represent the greatest profitability, Anderson, in his book The Long Tail: While the Future of Business is Selling Less of More, argued that it is the other 80% that will be most profitable with easy availability of non-mainstream items the Internet affords. Like many cornerstones, Anderson’s thesis was accepted as a priori, one of the fundamental, unexamined, truths of Web 2.0 and, with that, the world. Well, no more.

Following the growing criticisms of Anderson’s models by economists, Google’s Eric Schmidt has delivered what is seen as the death blow to the long Tail:

“I would like to tell you that the Internet has made such a level playing field that the Long Tail is absolutely the place to be, that there’s so much differentiation, so much diversity, so many new voices. I’d love to tell you that that’s in fact how it really works. Unfortunately, it’s not. What really happens is that we follow what’s called a powerlaw.”

(Is it a sign of industry insularity that, while economists have been criticizing the flaws for a while, it takes a word from Google to make this real? Or is it one more portent of the company’s growing role as truth makers?)

The WiReD editor admits that his theory is . . . flawed. It has become increasingly clear that the money is still in the Head, though Anderson’s fighting to keep as much legitimacy for his theory as possible:

“I'll end by conceding a point: It's hard to make money in the Tail. As Schmidt notes, it's also hard to make money if you don't have a Tail (to satisfy minority taste, which improves the consumer experience), but the revenues are disproportionately in the Head.”

I guess he’ll soon find out, now that his book has been relegated to the Tail.

By Mark Alvarez