1. David Soskin CEO Cheapflights.co.uk 1st May 2007
Understanding the long tail - why small customers are vital to web success
David Soskin
CEO Cheapflights.co.uk
1st May 2007

2. Why vertical and “Web 2.0” search extend the long tail
Agenda:
What is the long tail?
Why vertical and “Web 2.0” search extend the long tail
Outlook for “long tail” – orientated companies
Internet World, Earls Court, London, 1st May 2007

3. Acknowledgement to Chris Anderson

4. The new growth market: Products you can’t find anywhere but online
Typical
Blockbuster:
3,000 DVDs
Borders Bookstore:
100,000 books
Source: Chris Anderson
Internet World, Earls Court, London, 1st May 2007

5. Britannica vs. Wikipedia
Established:
1768
January 15, 2001
Number of articles*
64,900
7,000,000
* Source: & en.wikipedia.org
Internet World, Earls Court, London, 1st May 2007

6. Aggregators Communities/ user generated content Advertising services
Transactional
Digital goods
Information
Internet World, Earls Court, London, 1st May 2007

7. The long tail: The root calculus
“the lower the costs of selling, the more you can sell. As such, aggregators are a manifestation of the second force, democratizing distribution. They all lower the barrier to market entry, allowing more and more things to cross that bar and get out there to find their audience.”
Chris Anderson
Source: The Long Tail
Internet World, Earls Court, London, 1st May 2007

8. Old economy: crap matters New economy: choice matters
Crap vs. choice
Old economy: crap matters
New economy: choice matters
Internet World, Earls Court, London, 1st May 2007

9. Book Sales (USA), 2004 Sales Range Titles Units (Million)
1,000,000 or more 10 17
500,000 to 999,999 22 14
250,000 to 499,999 64
100,000 to 249,999
324 47
50,000 to 99,999
767 52
0 to 49,999
1,240,998
513
Total
1,242,185
665 Million+
Source: Book Industry Study Group
Internet World, Earls Court, London, 1st May 2007

10. Google: Ultimate long tail company?
“By going to the bottom with self-service, we were able to reach advertisers who fell below the threshold of traditional advertising. And by going all the way to the top, we were able to capture very large and historically underserved businesses as well as a whole new area that never had access to these kinds of online services.”
Eric Schmidt, CEO Google
Source: The Long Tail
Internet World, Earls Court, London, 1st May 2007

11. But how good is Google search?
“The ultimate search engine would basically understand everything in the world, and it would always give you the right thing. And we're a long, long ways from that.”
- Larry Page, Google Co-Founder
“Search as a problem is only about 5% solved”
- Udi Manber, CEO of Amazon’s A9.com search engine
“It's clear there's a lot of room for improvement, there's no inherent ceiling we're hitting up on.”
- Sergey Brin, Google Co-Founder
Internet World, Earls Court, London, 1st May 2007

12. Search can get a lot better…
Horizontal Search
Vertical Search
Internet World, Earls Court, London, 1st May 2007

13. Cheapflights
Before …
Internet World, Earls Court, London, 1st May 2007

14. Not much use for Borat …
Internet World, Earls Court, London, 1st May 2007

15. UK Cheapflights users seeking deals to Kazakhstan
April 2006 – March ,117 clicks

16. What appeals to Borat?
Internet World, Earls Court, London, 1st May 2007

17. End Result: Borat is a happy user
Internet World, Earls Court, London, 1st May 2007

18. Long tail of advertisers
Traditional Media
Cheapflights
Internet World, Earls Court, London, 1st May 2007

19. Long tail of advertisers
Traditional Media
Cheapflights
Internet World, Earls Court, London, 1st May 2007

20. The Cheapflights long tail …
Founded 1967
Employees100
Specialize in Greece & Cyprus
Internet World, Earls Court, London, 1st May 2007

21. The Cheapflights long tail …
Founded 2004
Employees18
Specialize in Florida; flights,
holidays & cruise
Internet World, Earls Court, London, 1st May 2007

22. The Cheapflights long tail …
Founded 1966
Employees 39
Specialize in Bulgaria, Croatia, Montenegro, Slovenia, Serbia and Romania
Internet World, Earls Court, London, 1st May 2007

23. The Cheapflights long tail
Internet World, Earls Court, London, 1st May 2007

24. Dohop: A global flight planner
Internet World, Earls Court, London, 1st May 2007

25. Travel is a natural subject for the long tail – highly fragmented
Then
Now
Travellers
Mainly the very rich
Everybody
Travel Companies
State owned/ monopolistic airlines
Some charters, specialist
Scheduled
Many charters, specialists
Low Cost
Online travel agencies
Destinations
Mainly short haul
“Everywhere”
Internet World, Earls Court, London, 1st May 2007

26. Long tail and Web 2.0 Search User Reviews Social Networking
Internet World, Earls Court, London, 1st May 2007

27. Then Now User reviews Michelin Rough Guide Hardens Frommers Everyone
Internet World, Earls Court, London, 1st May 2007

28. Frommers vs. WAYN HB slide
Internet World, Earls Court, London, 1st May 2007

29. Trusted Places: example a restaurant in London
Internet World, Earls Court, London, 1st May 2007

30. The long tail: Social networking
Then
club
local pub
street
school
charity
hobby
sport
Now
World
Your -
Internet World, Earls Court, London, 1st May 2007

31. Source: Ofcom research, April 2006
Time spent online
More and more people are using the internet
People now spend an extra 1 hour 16 minutes each month online compared with 2001
16-24 year olds spend even more time online: hours 20 minutes per month on the internet
Source: Ofcom research, April 2006
Hours
Year
Internet World, Earls Court, London, 1st May 2007

32. How to create a thriving long tail business
“ 1) Make everything available.
2) Help me find it.”
Chris Anderson
Source: The Long Tail
Internet World, Earls Court, London, 1st May 2007

33. Long tail of the internet
2002
2007
Web 2.0
Reviews
Social networking
Blogging
Vertical search
Internet World, Earls Court, London, 1st May 2007

34. “Long tail” is suited to the internet
Conclusion:
“Long tail” is suited to the internet
Vertical search is an ideal “long tail” application
Web 2.0 has accelerated the “long tail”
Understanding and using the “long tail” represents a significant and growing business opportunity
Internet World, Earls Court, London, 1st May 2007

35. Thank you Questions, suggestions, feedback or complaints welcome… david.soskin@cheapflights.com