The Internet: The Long Tail in a Recessing Economy

With large public interest in the downward-spiraling economy, it is difficult to know where the United States economy is heading in the near future. Although most debate on the economic condition is based on speculation, one way to ascertain a more logical explanation is through observations and trends of key elements of the economy. One ever increasing component of the economy is the world wide web. In particular, we can use correlations related to the transition from web 1.0 (where content was static) to web 2.0 (where content is dynamic and user-driven).

The long tail in the context of the internet has been a huge phenomenon. Essentially what we are seeing in the business world is a shift from people spending their time and money on large company websites and diverting those resources towards smaller niches. As a result, a small but significant percent of e-commerce is sparked through these niches.

Even with this shift, the majority of sites people access are part of large businesses. Niche markets are seen as an extension to large corporations and not a standalone prominent destination although this is changing. In difficult economic times, it has become apparent that customers (since they will have a lower amount of discretionary income) must limit their time, money, and energy. Sadly,someone loses the opportunity for sales. Unfortunately the niche markets will be the first to go since they are seen more as luxuries than corporations. Both corporations and niches are dependent on users purchasing products and/or services to survive. Once budgetary constraints affect households, families will focus more on the necessities or the things that society dictates as being necessities.

People easily succumb to peer pressure regardless of the situation. Psychologically, the stigma of large businesses will trigger a switch in their brain indicating that since they are big, they must be popular and well-known. If they are popular and well-known, then they are probably more likely to be necessity and therefore a safer investment with a limited amount of spending money. Even trends and fashion to not cease in recessions. People are constantly prescribing to a set of rules determined by our society. The trends and fashion may change, but will not slow down to any degree. Rather they will be dispersed into different areas or used in different capacities than originally thought before.

The long tail, as we know it, will no longer exist. Graphically, it will look stubby because the niches will dry up and the the skinniest part of the tail will disappear. In effect, we will be reverting back to web 1.0. The extent to which this happens will vary on the financial climate and the attitudes and reactions of the people. This change will only exist as economic conditions become worse. Reversely, the exact opposite will be true in an improving economy. It is important to note that the long tail was the natural progression for the economy and will not be going a way until a more progressive internet platform and concept is introduced into the mainstream internet community.