The longtail theory by Chris Anderson quickly becomes the bible when many web2.0 startups pitching their business models. One common misuse or misunderstanding of longtail is ignoring the cost of creating longtail channel.
The longtail channel is the mechanism to aggregate and distribute longtail items (content, services providers, merchandise, etc). The channel is not simply a web2.0 site. It is about how to move the items in and out of the site. Google, Amazon, Ebay now rely on branding to retain their longtail channels. Building brand is costly huge effort. Yelp aggregates longtail by leveraging users (crowd sourcing) and focusing on San Francisco restaurants initially. Without carefully crafted channel creation strategy, longtail channel will be broken and the longtail model will never work.
