Alex Iskold opined on Read/Write Web why there's no money in the long tail of the blogosphere.
Here's one of the reasons why he's wrong.
It's Not About the Money
Alex looks at the shortest possible route: Long Tail → Money.
In that view only massive traffic (Amazon) makes a buck.
Point is, you don't sell to the long tail — you leverage the long tail for SEO.
Reinforcing Page Themes with the Long Tail
Every long tail post adds keywords, key phrases, to the main site. It's the basic pattern of reinforcing the meaning of a page, category or whole web site.
If you can make a sale of a long tail post, fine — but the real goal is making big bucks on your main page or main site.
Simplified Long Tail Keyword Reinforcement
Just as every long tail Amazon hit reinforces Amazon as the site for books, so every long tail hit on your blog should reinforce your site as the site for widgets.
Or: "How Matt Cutts Puts It"
So I'll give you a quick example: we always say, don't just chase after a trophy phrase. There are so many people who think if I ranked number one for my trophy phase I win or my life will be good. When, in fact, numerous people demonstrated that if you chase after the long tail and make a good site that can match many, many different users' queries you might end up with more traffic than if you had that trophy phrase.
So already the smart SEO, looking down the road, sees that it's not just the head of the tail, it's the long part of the tail.
With personalization and the changes in how SEO will work, that will just push people further along that spectrum, towards looking at "it's not just a number one result for one query", it's "How do we make it across a lot of queries?"
— "Personalization and the Future of SEO", Matt Cutts