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April 10, 2001

"Equity is just icing on the cake in 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, 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. . .

  • Wayne Sharpe, Chairman & CEO of Bartercard, has announced the appointment of Michael Gordon to the position of President of Bartercard Ventures (a division of Bartercard International).

    As an investment principal Gordon has been an active advisor to numerous growth stage companies regarding corporate finance, mergers and acquisitions, and corporate strategy issues.

    Gordon will lead Bartercard Ventures and deal with all aspects of the Bartercard group's financing, capital raising activity, as well as worldwide mergers and acquisitions. He will report directly to Sharpe and be located in the new Bartercard USA offices in Irvine, California.

  • Dean Casuett, formally associated with Unlimited Business Exchange, has concluded an agreement with Colorado-based Ethika Corporation and plan of reorganization with Tradequest, a Utah corporation headquartered in Salt Lake City.

  • Online has reduced its transaction fees to 3%, which are charged on sales only.

  • Corporate travel managers are bearing increasing pressure from senior management to reduce costs, as concern about an economic downturn deepens. How much travel will be down won't be clear until quarterly figures begin rolling in later this month.

    But the trend that began late last year looks likely to continue, according to the Travel Business Roundtable Index of leading Economic Indicators. Softness in the market means more inventories available for barter.

    However, one company isn't standing pat, in light of the anticipated downturn. Marriott International is going into the broadcast business to lure new meetings-and-convention customers to their hotels.

    They'll be offering a new technology for transmitting meetings and events around the globe via satellite, web casts, etc. The venture, called EventCom Technologies, will operate as a division of the company and be based in Rosemont (IL).

  • Follow-up on BarterNews issue #53's BarterNet cover story. We reported in a side story that Laird Cagan, the co-founder of BarterNet, was an early member of the core executive team of EarthShell Corporation, a materials science research and development company which invented a biodegradable replacement for styrofoam.

    On March 30th shares of EarthShell jumped 90% after fast-food giant McDonald's approved EarthShell's biodegradable container for their Big Mac hamburger. McDonald's has been testing the containers, made from a combination of limestone, potato starch, and recycled milk carton fibers, in the 128 Chicago-area restaurants.

  • Miami Beach will see trade exchange owners from around the U.S. and some foreign countries coming together at the annual National Association of Trade Exchanges (NATE) convention. It's scheduled for April 19-21 at the Wyndham Hotel.

    A look into the "Future of Barter" will be one of the sessions. Ian Jones, President of Bartercard USA; Steven White, Ubarter's founder; and Tom McDowell, founder of American Trade Exchange and former NATE Executive Director, will provide their views of what the industry will look like in the days ahead. The moderator for the session will be BarterNews editor, Bob Meyer. Ample time has been scheduled for panelists to question one another, as well as respond to queries from the attendees.


We welcome your comments, questions, and observations.
? Copyright BarterNews 2003. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.