The Long Tail Internet Myth: Top 10 domains aren't shrinking

Today’s post is an extended analysis and perspective on Richard MacManus’s original post.

I’m a huge advocate of the Long Tail theory/reality and I even require new members of the Compete.com team to read Chris Andersen’s book by the same title. The basic premise of the long tail is that the internet has unlocked affordable and available content and product distribution channels that allow "˜non hit’ media (ie. non-mainstream) to find its way into our living rooms.

Examples of the Long Tail (Source: The Long Tail, Chris Anderson)
Books Amazon 40x in-stock titles compared to a Borders Superstore
DVDs Netflix 18x DVDs available compared to the average Blockbuster
Music iTunes 3.5 million tracks compared to 4,500 CDs at Walmart

The internet enabled the Long Tail, but the internet is also a Long Tail within itself. Based on web sites visited by Compete’s community of users the internet has grown by 77% in the last five years to over 5 million unique domains. (Note: This count includes misspelled and unhosted domains people accidentally find themselves at).

Many believe that the expanding internet universe invariably reduces the relative significance and presence of the large internet properties (Yahoo, Google, etc). Fred Wilson, an active VC and well respected internet pundit, recently offered the following theory:

“I don’t have the data to prove it, but my guess is if you looked at the percent of all pageviews that are generated each month, a much smaller portion exist on the top 10 properties today than in 2000, at the height of the first Internet era.”

We found Fred’s theory interesting, we didn’t have the answer on hand, but we did have the data. Compete’s readily available data goes back to 2001, so we had to bump up Fred’s specification by a year, but the results are interesting.

Contrary to Fred’s theory and the larger theory of the Long Tail, the top internet properties are accounting for a larger percentage of total pageviews across the web. Currently, the Top 10 domains* account for 40% of the total pageviews on the internet — a 29% increase over the last five years.

*Note: Top 10 domains were based on pageviews for this analysis. Last week’s Top 20 analysis was based on Unique Visitors.

The driver of this Top Domain growth can be summed up in two words "social networks". If you were to remove MySpace and Facebook from consideration in 2006 (also removing their pageviews from the total) top domains would only account for 33% of total pageviews — basically on par with 2001.

The internet has grown rapidly and its tail keeps getting longer, but the social web naturally promotes a top heavy head. Ebay works because sellers know they will find a healthy volume of buyers. MySpace works because I know there is a good chance I’ll find my 5th grade girlfriend. The network is the viral growth, but it’s also the interaction agent (on steroids)"¦

The picture below is taken from Compete SnapShot and compares the pageviews per visit at MySpace vs. Yahoo vs. Google.

60M+ visitors! 67 pageviews per visit! Nearly 30 minutes per stay! Ok, no more "˜!"’s, but you get the point. This level of interaction has simply never existed before.

Conclusions:

  • The domains visited in the last five years have expanded by 77% (5.1M and growing) — the Long Tail is very real
  • Interaction across traditional top web properties — when compared to the internet universe – is relatively the same today as it was five years ago
  • Social networks, such as MySpace, yield a level of interaction we have never seen before. As a result, the Top 10 web properties, as measured by pageviews, account for a greater percentage of the total internet compared to five years ago

ProfileGet SnapShots of sites mentioned in this post:

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