Is The Long Tail the End of Giants?

Tortoises @ Maritim Hotel, Mauritius
Originally uploaded by timparkinson.

In recent history, I believe it is the common belief that just a few major companies are dominating the American economy. In the early 1980's, IBM was perceived as "big brother." Some time later, and perhaps even now, Microsoft has a similar reputation. In the past month or two, I've been saying that Google will be the Microsoft of the Internet.
This past week, Yahoo acquired del.icio.us, and they have owned Flickr for some time. In my mind, that puts Yahoo in a very powerful position. They own two of the most significant social tagging services on the net. That got me thinking about all of the material I've read about The Long Tail. Suddenly, those big companies don't seem so powerful. It's so easy to publish content, and web services companies can roll out new products very very quickly. I understand that up until now, the majority of Internet traffic has gone through a limited number of web sites (not so so different from the top 50% of books or movies or whatever else). Can recommendation systems change that? Are our individual tastes enough to drive diversity in web services just as they can drive sales in niche book markets? I don't know. I would like to hear what you think.