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April 10, 2001 "Equity is just icing on the cake in dot.com barter deals." - Kevin Dunn, G.M. of Delta (Air Lines) E-Venture At the height of the Internet joy ride, bartering dot-com equity for goods and services enjoyed quite a vogue, reported CFO magazine in the April 2001 edition. Executives of dot-coms assumed that equity in their companies was driving the deals. However, as New Economy stocks fall and barter deals continue, it's apparent that equity was not the driver. Dunn, general manager of Delta E-Venture, says that "equity is just icing on the cake in dot-com barter deals." He suggests that the arrangements are driven by core business needs, never by the promise of soaring stock values. (He noted that the value of Delta's equity stake in Priceline.com, which is now $750 million, came as a welcome surprise.) Dot-com equity barter deals will continue to have a role to play as e-tailers have a lot of returns, and struggling companies can use barter to manage their inventories. Wall Street Journal Publishes Dismal Report On Business-to-Business Sector In the April 4 issue of The Wall Street Journal, Section B, "Marketplace" page B1, the paper reported on the web's "business-to-business" sector explaining why the bold promises of changing the world have fallen far short of expectations. Here's a capsule of the story: 1) Business-to-business and business-to-consumer had a lot in common after all. Both sectors overstated the extent to which the Internet was changing the world. And both were peddling technology solutions that in many cases didn't work as billed. 2) Last year's big business-to-business fad--internet exchanges or web sites where buyers and sellers meet to do business--has proved to be largely a bust. (In the commercial barter industry a profitable online b2b is yet to be built.) 3) The current favored buzz of b2b is "supply-chain management" where companies use the Internet to stay in touch with their suppliers and customers. The article says the dirty little secret of b2b is that these systems are often very difficult to get up and running. And, therefore, they can no longer expect to be welcomed with open arms by corporate technology buyers. 4) There is still no clear idea of how b2b will be making money, and the goal of b2b--to reduce the cost of doing business--is still a long way off, expected to take years to reach, not months. The survivors may turn out to be the big software companies like SAP AG and Oracle. Here And There. . .
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