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February 27, 2001

Barter Deals Come In Many Forms

Corporations shopping for major facility locations can get unprecedented barter deals from state and local governments. And the most powerful of these agreements are the financial incentives which reduce or eliminate upfront costs for the company.

For example, QVC, the company that produces the Home Shopping Network, recently concluded a deal with the struggling municipality of Rocky Mount (NC) located in Edgecomb County. QVC was provided a prime 273-acre plot of land with full utility connections and good roads linking the facility to nearby interstate highways, in exchange for its relocation.

In addition, QVC qualifies for a tax credit from the state of $12,500 per job, because Edgecomb is a tier one (most needy) county. For QVC's 800 jobs, that means a tax credit of exactly $10 million! QVC's large sophisticated facility was operating just 13 months after the July 19, 1999, signing of the lucrative barter agreement.


WarpRadio Network Now Encompasses 500 Stations, Barter Plays Big Role In Growth

WarpRadio Network (OTCBB: WRPR) has reached one of its early goals, that of providing internet streaming audio for 500 radio station broadcasters. With the current growth of 10 to 15 new radio stations a week, the company expects to reach 1,000 stations by year end.

WarpRadio barters two minutes of inventory per hour over the Internet broadcasts, and generates over $2 million in revenue through its syndication efforts.

Streaming media is a great way for advertisers to target the younger 12- to 24-year-old market, as these consumers are more likely to be online using streaming media and have a higher tendency to interact with the advertising.

According to a study performed in January 2001 by the Arbitron/Edison Media Research Internet Study VI, "streamies" continue to grow as valuable consumers. More than 30 million, or 13% of Americans, used internet audio or video each month compared to 10% one year earlier.

One of the study's central findings was that broadband and streaming media go hand in hand. As more consumers get super-fast internet access at home, their streaming media consumption is likely to grow.


Technology Changes Rapidly, People Do Not

Despite the stock market's drop and recession talk, it's likely the next 5 to 10 years will see enormous economic progress. Why? Because the potential benefits of technology are growing faster than people are implementing it.

Pollster Harris Interactive says only 2.8% of American adults have sent an e-mail to a doctor or received one. And only 13% of physicians have ever communicated with a patient by e-mail, which is the only sure antidote to time-wasting telephone tag.

Barter Online Sites Ahead Of Their Time

The cover story of BarterNews' recent issue focuses on one of the pioneers in the online barter business--Ubarter.com. Their efforts to convince the business community that this is the way to trade has been met with some success, but not what they initially expected. Nor has any of the other online companies experienced the enormous success envisioned.

Yet, because change requires rethinking and different action, there is hope for these cutting-edge online barter companies. As the small business community becomes more comfortable with the changes occurring in technology, further use and implementation of that technology will occur.

That transition could see big payoffs for the online barter companies. The key now is for them to stay in action, keep afloat, until that day arrives.


Decades ago the "doom and gloomers" were projecting enormous famines by the year 2000, as our world's population reached 6 billion people. And, they surmised, heavily-populated countries like India would never have enough to feed its billion-plus population. So the following story is most interesting... and shows how difficult it is to predict the future.

India Faces Challenge To Dispose Of Grains Stock

Disposing of bulging stocks of foodgrains will be a major challenge to Indian policy-makers in the coming months, in face of low world prices and poor demand. The National Council for Applied Economic Research said in its quarterly review that (stored) stocks were likely to hit 55 to 60 million tons by the end of June, and India now holds over 44 million tons of foodgrain stocks. (According to the government's buffer norms, the country needs minimum foodgrain stocks of 24.3 million tons.)


Here And There. . .

  • Thailand's Commerce Ministry reports that an increasing barter surplus will help prevent the country's trade deficit from widening. The country recorded a surplus of 1.06 billion baht (about $25 million) in 28 barter deals last year. (They bought goods/services worth 5.37 billion baht from other countries, and sold goods/services worth 6.43 billion baht through barter.)

    Major exports from Thailand in the barter deals included frozen chicken, chemical products, rubber, and rice; purchases were mainly telecommunications equipment and services, and aircraft through barter.

  • In our February 13th issue we reported on the inventory pileup taking place, and the effect such inventory will have on the barter industry. The tech industry (personal-computers, communications, and cell-phone industries) affirms mushrooming inventories, up some 52% as sales growth is slowing.

    With spring training now in session, investors who see the inventory buildup are already repeating an oft used baseball phrase, "wait until next year," for any pickup in the tech industry.

  • Looking to acquire more frequent-flyer miles--another tradable commodity? American Express card members who use their cards to pay federal income taxes through April 16th can earn double miles on their Delta SkyMiles Card.

 



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