Alex Iskold penned a post the on Read/Write Web about the revenue potential of blogs in the long tail, aka blogs with little traffic. He's found a correlation between how much traffic a blog gets and how much money it makes:

There's No Money In The Long Tail of the Blogosphere

Specifically, in the blogosphere, the vast majority of blogs have very few readers. It is not realistic to expect these blogs to make money. As the enthusiasm and the incentive in the long tail begin to wear off, what would be the impact on the businesses that depend on them?

There's not much to argue with there, but what about the exceptions? Could a blog have little traffic and still make a lot of money? Sure!

Here are a few examples:

- Blogs that influence politicians. If you're audience is in the hundreds, but they all work in white buildings in DC, you're audience will be a bit more valuable than that of a hundred reader tech blog.

- Blogs for CEOs - Again, a small audience, but that's the point.

- Blogs for luxury products. A blog focusing on using 767's as corporate jets may not have a large audience, but the people reading it aren't your average web users.

Here's my advice based on Alex's post: don't write for general audiences if you don't have the time or energy to compete with major sites covering the same topics (blogs, newspapers, magazines). Find niche audiences that advertisers drool over and write for them.

Audiences should be measured by value rather than size.