How Mobile Alters Traditional Network Effects In Marketplaces

On the web, marketplaces are the stuff of legend. With properties like eBay and Amazon, among many other, an online marketplace harnesses the openness of the web, more efficiently matches supply with demand without too many intermediaries, and leverages network effects to capture economic value during each transaction. A key component for a marketplace to work, however, is liquidity -- the comfort in knowing that for each item or request posted, there is a willing buyer at a certain price. Liquidity is what drives the engine of a marketplace, what keeps sellers coming back to list items and what keeps buyers coming back to fulfill their needs, and in order to have it, it requires scale -- that lots of people be able to access the marketplace.