Here's a great analysis of two-sided markets by Des Traynor, with particular references to app.net. A taster:
Same-side network effects are those where strength of one side has an impact on its growth. It can be positiveâ€”Facebook, for example, is better with all of your friends on it, so you invite them. It can also be negative: Facebook is less attractive to advertisers when all of their competitors have already saturated the market.
Cross-side network effects are when the strength of one side has an impact on the growth of the other. They can be positive: the more readers a news website has, the more attractive it is to advertisers. And they can be negative: the more adverts a news website shows, the less attractive it is to potential readers.