Wharton has written two papers on the effect of geography on Internet retail sales.

The first paper concludes that off line word of mouth is more effective than online word of mouth.  This should clue marketers in how to more effectively manage referrals.

The second paper concludes that long tail strategy is valid and the paper supports a niche oriented sales strategy.

You can read the full article and get both papers here: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2455