Thursday, March 10, 2005

The E-Bay Economy

Like that title? I used it once before on a column I wrote about the new “eBay economy.” With its ability to create like-minded though geographically disparate markets, and even better, its ability to create a climate of trust by recording individuals’ transaction records, I suggested that eBay was providing a model for a whole new way of doing business.

Four years later, it’s really happening.

Check out this story by Jonathan Duffy of BBC News Magazine, “If the world was run like eBay.”

It records the rise of, a UK-based, eBay-like business that offers loans by aggregating willing borrowers and lenders. Sure, zany dot-coms come and go, but this could work -- so long as market participants trust the site’s online security checks and other anti-fraud safeguards. For its part, Zopa receives a 1% upfront fee from the borrower, which sounds pretty cushy.

I like the fact that Zopa assumes its members are big kids, who can make their own decisions and choose the risks they want to take.
“At Zopa, you can take calculated risks or play it safe, you can be impatient or you can play a long game, you can pocket your profit or reinvest it, you can watch your investment every day or every month. None of these ways are right or wrong, they are just how it is.”

(FYI: ZOPA is a negotiating term that means “Zone of Possible Agreement.” As the site says, “if there’s no ZOPA, there’s no deal.”)

The story also cites similar disintermediary businesses in the UK, such as Betfair, which enables any two people in the world, to bet against each other. And then there’s Adultwork, which apparently, uhmm, makes pimps redundant.

And so our world spins …

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