Does Affiliate Marketing Work?

I’m not sure who first came up with the concept of the affiliate, but in the e-commerce world the master has to be Amazon.
Amazon has grown to be one of the most important e-commerce portals in the world and a lot of that growth can be contributed to its gigantic affiliate base.
But what about smaller businesses? Can affiliate marketing work for them?
What of companies that do not have the “global reach”?
I’d love to know how other people find it.
From a publisher perspective the number of Irish companies offering affiliate programs has definitely mushroomed since I first looked into it back in the late 90s.
However if there has been growth for some there have also been failures for others.
At a global level it “must” be working, or how else would you explain the growth of cj.com and others.
What kind of strategy should you adopt?
What does it take to win market share through your affiliate network?
How can you recruit new affiliates?
When you are selling products and services that do not have the global appeal of the likes of Amazon I think it’s only natural to feel mildly frustrated…