The Long Tail by Chris Anderson is an observation of the behavior of consumers when given nearly limitless choice, as in the case of Amazon. The major observation is that the aggregate demand of the niche products is substantial and can be profitable when distribution efficiencies allow such choice.
An internet company does not need careful market research to determine which products they should offer. Instead they can offer everything and allow search filters and customer recommendations to automate the market research process. Search allows customers to find what will fit their specific needs, more effectively than a big box retailer usually can with it's broad offerings designed for widespread appeal. More customers are using web 2.0 to create content thus shifting the advertising and pr funtions to the masses.
This book is very forward thinking but my only reservation is that the principles are difficult to apply to brick and mortar retailers that still make up 97% of retail sales in America (US Census Bureau). Caveat aside, every marketer should read this insightful analysis of a phenomena that is dramatically affecting the world.