MobShop Discontinues Consumer Service

MobShop Inc., the San Francisco-based buyer aggregation e-commerce site, discontinued its consumer service over the weekend, a company official confirmed on Monday.

The decision to abandon the consumer business is consistent with statements made earlier this month following the retrenchment of MobShop’s one-time competitor, Mercata Inc. Since April, MobShop has been shifting away from direct-to-consumer service toward supplying software to aggregate demand in order to force prices lower. It already serves customers such as the U.S. General Services Administration.

“We have discontinued our consumer service,” said Brooke Hammerling, director of corporate communications at MobShop.

The company plans to issue a statement as early as Tuesday.

Although the company faces very little financial impact (if any) from its decision, the move was a major blow to the future viability of online services that aggregate demand for consumers. In theory, consumers helping each other to bring prices down appeared to have sustained interest. But the business model proved flawed by the wait time needed to complete a transaction. This is, after all, internet speed and many consumers aren’t even willing to wait for their dial-up connections.

MobShop’s investors include Netscape co-founder Marc Andreessen.