Mitch nails it as usual.

From Red Herring Blog: After the gold RSS.:

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The power law cult says most products or ideas in a market are small fish, but they miss that there is a lot of value of being at the top of small markets. The statement about there being no money in feeds-in the sense that you make money by throwing RSS feeds out and trying to monetize them-is true if you want to make money on ads in the feeds themselves. The content, however, can support ads, as it does on the web, in paper publications, TV, etc. Readers do see ads when they click through to a web site. RSS feeds let them zero in on what they are really interested in, allowing them to read more widely (or, perhaps, more deeply, because they are able to find more information about specific topics). RSS contributes to increased precision in audience targeting, and that's why there is a justifiable rush of money into this technology.

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