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Chapter 10 E-commerce: Digital Markets, Digital Goods 431

FIGURE 10.8 A NET MARKETPLACE

Net marketplaces are online marketplaces where multiple buyers can purchase from multiple sellers.

Exostar is an example of an industry-owned Net marketplace, focusing
on long-term contract purchasing relationships and on providing common
networks and computing p latforms for reducing supply chain inefficiencies.
This aerospace and defense industry-sponsored Net marketplace was founded
jointly by BAE Systems, Boeing, Lockheed Martin, Raytheon, and Rolls-Royce
plc to connect these companies to their suppliers and facilitate collaboration.
More than 70,000 trading partners in the commercial, military, and govern-
ment sectors use Exostar’s sourcing, e-procurement, and collaboration tools for
both direct and indirect goods.
Exchanges are independently owned third-party Net marketplaces that
connect thousands of suppliers and buyers for spot purchasing. Many exchanges
provide vertical markets for a single industry, such as food, electronics, or
industrial equipment, and they primarily deal with direct inputs. For example,
Go2Paper enables a spot market for paper, board, and kraft among buyers and
sellers in the paper industries from over 75 countries.
Exchanges proliferated during the early years of e-commerce but many have
failed. Suppliers were reluctant to participate because the exchanges encour-
aged competitive bidding that drove prices down and did not offer any long-term
relationships with buyers or services to make lowering prices worthwhile.
Many essential direct purchases are not conducted on a spot basis because they
require contracts and consideration of issues such as delivery timing, custom-
ization, and quality of products.

10.3 THE MOBILE DIGITAL PLATFORM AND MOBILE
E-COMMERCE

Walk down the street in any major metropolitan area and count how many
people are pecking away at their iPhones or BlackBerrys. Ride the trains, fly
the planes, and you’ll see your fellow travelers reading an online newspaper,

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