Chris Anderson has a post that combines two of my favorite topics: The business strategy of Google and his theory of the long tail.
What Google has done is to find and monetize the Long Tails of both advertisers and publishers. These include millions of small companies and individuals who may never have advertised before, at least not nationally. They were considered sub-scale–too small to be worth a call or visit from an ad salesperson, possible too small to even think of themselves as an advertiser at all. But Google ads are self-service, cheap, and performance based (pay-per-click), which all combine to dramatically lower the barrier to entry.
And here’s the challenge and opportunity for local-focused media companies. Google will drain local advertising revenue, but it will also help educate many small businesses to the value of Internet advertising. Local Web sites should be able to develop strategies that compete favorably with Google, since they, too, are part of the long tail.