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February 28, 2006

Written by Bob Meyer, Editor of BarterNews

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From the desk of Bob Meyer...              2/28/06

This past week I’ve been communicating, via e-mail and phone, with a company that’s located in a LDC (lesser developed country).

Experiencing, second-hand, the effort they must expend and routinely face to secure a simple purchase of a product, once again reinforces how fortunate those of us are who live and work in a more developed country. It’s certainly something we generally take for granted.

Because of our considerable infrastructure, technological advancements, and grounding in capitalism we can accomplish so much more within the same time-frame.

I admire the tenacity of these entrepreneurs who must struggle continually. By doing so they are providing a valuable piece of the groundwork that will help their country move forward, from a business perspective, in the years ahead.

The Message In Disney’s Experiences

The Walt Disney Co., an icon of mainstream America, is going against the grain of conventional business strategy this spring as it will stop distributing their 80-page catalog that has filled the mailboxes of tens of millions of households for the past decade. Instead it is embarking on a solely electronic initiative—pushing its products via the Internet.

The decision was made after the recent holiday season, wherein Disney spent $9 million to mail 15 million catalogs and then experienced a 45% drop in phone orders. At the same time customers responding to their online marketing efforts skyrocketed.

Disney won’t stop using print materials altogether, but rather than producing and sending a weighty catalog they will save a pile of money by mailing out a postcard or invitation which will be used to drive traffic online.

How Barter Became An Integral Part Of The Olympic Games

The Olympic logo of five interlocking rings represents the union of the five continents and the meeting of athletes from around the world at the Olympic Games. In addition, by staging the games every two years (alternating between the winter events and the summer events) it offers the world an opportunity to observe man’s many similarities and the hope for a more united world.

Today eleven major corporations, ranging from McDonald’s and Coca-Cola to Chinese computer manufacturer Lenovo and Canadian insurer Manulife, are paying $80 million each to be top-tier Olympic sponsors from 2005 through 2008. A large part of the payment is through barter, i.e. payment in kind, because the Olympic Committee needs an enormous amount of goods and services to stage the 16-day global event.

These in-kind barter payments were first introduced in the 1984 Summer Games in Los Angeles, when Peter Ueberroth was the young and dynamic U.S. Olympic Executive Director. In the book he authored, Made in America, he chronicled the use of barter and how he traded the licensing rights to the Olympic logo for $116 million in needed goods and services.

Because of his trading savviness, the ‘84 Games turned a phenomenal profit of $222 million which was subsequently used to fund amateur athletes nationwide. But it was his barter strategy that forever changed how sponsors would handle the payments for licensing rights. And both parties benefitted...the Olympics get what they need and the sponsors appreciate the economics of in-kind payments.

Business People Love Barter—It’s A Proven Business Tool

There are many reasons for loving the barter technique. But one that’s seldom mentioned is the insurance it provides against unexpected downturns. In the financial arena, for example, the most common insurance derivative is a swap wherein two parties exchange portions of their risk as a hedge against failure.

A good illustration of this occurred when movie producer George Lucas bartered a 1% share of the profits in his yet to be released Star Wars for a 1% share in John Milius’ surfing film, Big Wednesday. They bartered because it provided a safety net...neither producer was certain what his movie’s future earnings would be.

Although Big Wednesday proved to be a big bust, Milius’ small share of Star Wars netted him more than $300,000. Lucas, of course, made less money on the deal, but it could just as easily have gone the other way. And on many levels it does.

In the case of investment bankers the purpose of a typical swap between two client companies would be for added cash-flow security. It might involve a company exchanging 5% - 10% of its annual cash flow with that of a similar-sized company in another region of the world. Such an arrangement insulates each company from the financial volatility of its local market, interest rates, and currency.


U.S. Tourism Industry Needs New Strategy

Maybe someone from the barter industry should contact Jay Rasulo, the national chairman of the Travel Industry Association, and suggest he put on his barter cap to get more of the global tourism market!

Jay Rasulo, chairman of Disney parks and resorts, has warned travel industry executives that the United States is in trouble as a competitor in the global tourism market. Hence the group must adopt new strategies in 2006, or continue to lose its share of international visitors.

Rasulo contends there is a revolution going on in the global tourism market. “The way people travel, where they travel, how they travel...it’s all changing.”

The U.S. market share of international travel has dropped since 1992 to an all-time low. With a six percent share, it ranks third in the world behind France and Spain in attracting international visitors, the World Tourism organization reports. (Editor’s note: Many pundits claim China will lead the world in attracting international visitors by 2020.)

What can be done to turn the situation around? According to Rasulo we must take action on three fronts:

1.   Develop a destination marketing campaign that makes the United States a top choice for travelers, funded by industry and government.

2.   Reduce barriers to travel, such as overly complex visa and passport requirements.                                            

3.   Give the travel industry a voice at the highest level of governments to ensure jobs and bolster the nation’s image.

The Growth and Use of Secondary Capital (New Money) Creates Unprecedented Wealth In Today’s New Age Of Possibility

There are many forms of secondary capital—which can be defined as any financial instrument that measures and communicates value in a common language. Would you like to see and learn more about the many forms of secondary capital?

We have 75 free, informative and inspiring, articles for you in our “Secondary Capital Section.” Check it out... www.barternews.com/secondary_capital.htm.

ITEX Convention In Las Vegas Could Be Industry’s Largest

Word from the ITEX Bellevue (WA) headquarters (OTCBB:ITEX) is that this year’s convention, slated for May 21-26 in Las Vegas, will have over 200 in attendance. Alan Zimmelman from the corporate office reports the convention is officially sold out...with 140 rooms and suites snapped up in record time.

This year’s theme, “The Winning Team,” will have outside presentations from Fred Pryor Seminars, Sales Coach International, and Team Bonding.

The six days of strategizing and sharing will be kicked off with a keynote address by Steven White, the Chairman and CEO of ITEX. He will be covering his favorite topics—the cashless marketplace and how he expects ITEX to set industry trends. For more information visit www.itex.com.

Trade Exchange Owners...
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“We have secured the funding necessary to continue our industry roll-up program on attractive terms.”

—Don Mardak, IMS President & CEO

International Monetary Systems (OTCBB:INLM) reported that its revenue for January was $538,000, an increase of 57% over January 2005.

CEO Don Mardak says he has never been more excited about the company’s future, since their growth strategy of acquiring independent trade exchanges to add (to the Continental Trade Exchange network) has been a huge success.

Now, with secured funding in hand, Mardak believes the company is ready to continue with an aggressive industry roll-up program. For more information go to www.internationalmonetary.com.

IMS Featured In ValueRich Magazine

IMS International Monetary Systems is one of eight companies featured in the current issue of ValueRich magazine, which has over 58,000 readers including 8,000 public-company CEOs, fund managers, money managers, investment bankers, and others. Mardak will present a corporate overview of the IMS growth strategy at the ValueRich Small-Cap Financial Expo, to be held March 8-9 in Miami (FL). 

Get New Money-Making Ideas And Valuable Contacts!

You can obtain useful, informative ideas and contacts in every available back-issue of BarterNews.

Other Barter Company Happenings Globally

After a four-year hiatus from rugby sponsorships, Australia’s BBX announced a significant agreement with South Sydney Rugby League Club. The sponsorship will provide a high visual presence at the “Souths” Telstra Stadium home games in Homebush, home of the Olympics.

The firm also reported in a recent news release the imminent expansion into China. BBX trades on the Australian Stock Exchange (ASX). For more information go to www.ebbx.com. 

Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.

Gas Bartered For Vehicle Ad Space In Southern California

An Oceanside-based promotional company, FreeGasHelp.com, came up with the idea of trading, with drivers who accumulate 1,000 miles a month or more, free gas cards in exchange for advertisements placed on their vehicles. The idea is a result of looking for ways to gain additional exposure for an eBay drop-off company, 4AuctionHelp.com.

Traffic for the eBay drop-off company has increased an estimated 30% from each driver’s circle of influence...by mentioning the product name to friends and neighbors. It was also noted that drivers are often asked if they work for the advertised company, prompting further explanation about the program and the advertiser.


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Ivana Trump’s Barter Deal Still Secure

In Las Vegas major condo developers are pulling in their horns as the market is quickly changing. According to Applied Analysis, a Las Vegas real-estate research firm, six ultra-luxury projects are uncertain and three have been canceled in the past year.

One of the splashiest projects was a condo tower named after Ivana Trump, an ex-wife of real-estate mogul Donald Trump, which is now up for sale. The developer, Victor Altomare, says he could possibly make more money selling the project than by building the condos himself.

Regardless of the new owner, the project will continue in its current design. And, Altomare affirmed that Ivana will get her condo.
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