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April 18, 2000

In this week's report. . .

  • Starwood hotel chain moving into the barter arena
  • eVolution goes after Global 1000 companies
  • Stock market decline affects environment for M&As and IPOs
  • Southwest is successful generating online revenue
  • Lucent Technologies betting on laser-beam data transfer
  • Here and there. . . . .


Starwood's Barter Effort Promises Big Change

Last Tuesday one of the top hotel chains in the world, Starwood Hotels & Resorts Worldwide with more than 700 locations, announced they were actively moving into the barter arena by signing on with BigVine. Starwood's inventory includes Westin, Sheraton, Four Points, St. Regis, Luxury Collection, and W Hotels...spanning 80 countries.

As a result of Starwood's deal with, announced on April 11, we can look for other national barter marketing agreements among barter companies and major hoteliers. This is one step promising significant change in the barter marketplace.

To his credit, Barry Sternlicht, chairman and CEO of Starwood, is cognizant of the opportunity to reach the small business market through the barter conduit provided by BigVine. Trade exchanges provide an ideal distribution channel to the unmanaged business traveler, which is, according to Sternlicht, one of Starwood's key customer groups.

Reinforcing Starwood's long-term seriousness toward the trading of its surplus hotel rooms the company announced that they are also making an equity investment in BigVine. Plus they will be promoting the barter exchange to the 4.5 million members of Starwood's Preferred Guest traveler program.

eVolution Focuses On Global 1000 Companies. . .
Bartering For Equity

A new company, called eVolution Global Partners, will shepherd "old economy" global corporations onto the Internet. Assisting them will be some real heavyweights! eVolution's principals are Kleiner Perkins Caufield & Byers, Bain & Co., and partners of buyout firm Texas Pacific Group.

The three powerhouses intend to create a package of services they don't specialize in separately. They will then barter their collective services for equity (from 5% to 50%) in the new web companies, which will be developed for the international corporations.

Basically, eVolution's goal is to free up and harness the extraordinary corporate assets of the Global 1000 companies. The idea is to spin-off new internet businesses, leveraged from each one's core businesses.

New Environment For M&As and IPOs

With almost one year's gains taken away in a week of trading on the stock market, there's suddenly a new environment for M&As and IPOs. According to the Wilshire Associates Equity Index, the week of April 10-14 was a disaster.

The Index which represents the combined value of all New York Stock Exchange, American, and NASDAQ issues ended the week at $12.5 trillion, down $1.9 trillion from the previous week. It was still up from the $12.1 trillion of a year ago.

Currently, more than 50% of merger-and-acquisition deals see a company's "currency" (their stock) used to complete a transaction. Last year more than $3 trillion in corporate world-wide mergers occurred.

Two-thirds of all the M&A activity in the U.S. for the first quarter has taken place in, media, telecommunications...with the dollar volume up 75% from a year ago. (J.P. Morgan & Co's analysis of data provided by Thomson Financial Securities Data.)

That's about to change given the volatile stock market. So look for a softer M&A market, and a slowdown in the use of a company's currency to make acquisitions.

In the IPO (initial public offering) market, companies are already withdrawing or postponing their offerings. And with more than 300 companies already having filed to go public this year, compared with 486 that actually "priced" in all of 1999, the changing conditions guarantee that the pipeline will become very congested and backed up. Most likely, companies in the planning stages of filing will wait as well.

Southwest Knows The Key To Generating Revenue Online . . .
Introduce A Trade Component

According to the Travel Industry Association, 85 million people book t ravel online, making travel the largest internet-commerce category with $7 billion sold on the web last year.

Yet, only Southwest Airlines has had a big success in bringing customers to its own site, which now generates 25% of its revenue. What's the key? They've introduced a valuable customers a free round-trip ticket for every four round-trip flights booked online.

Lucent Technologies Trades On It's R&D Assets

Lucent Technologies placed a heavy barter bet on TeraBeam Networks, a startup that is using lasers to beam data through the air at high speeds.

Lucent will contribute cash, plus is trading on its other assistance plus their considerable research-and-development assets...all valued at $450 million.

In return Lucent gets a 30% stake in the new equipment company, plus all TeraBeam's products will carry the Lucent brand.

Recently T. Rowe Price Investment Services invested $105 million in TeraBeam's third round of venture-capital funding. TeraBeam is expected to launch its service commercially later this year.

Here And There...

  • Magazines are certainly benefiting from the dot.coms... Back in November of 1998, $22.4 million was spent by dot.coms on magazine advertising. One year later that figure had jumped to $155.4 million for that same month!

  • The 55-attorney firm and litigation powerhouse of Boies, Schiller & Flexner (most recently in the headlines by serving as special assistance trial counsel to the Justice Department in the Microsoft antitrust litigation) is also entrepreneurial and willing to take big risks in the hopes of huge returns. They are advising internet startups, and they accept stock instead of the more conventional fees.

  • The COMDEX Spring 2000 Conference is now being held at McCormick Place in Chicago, through April 20. A symposium titled "Procurement, Aggregation, Barter and Trade" will see Bruce Kamm, President & CEO of InterTrade Technologies (cover story BarterNews #49), Jeff McKibben, VP eProcurement from Hewlett Packard, and Bill Welsh, Executive VP from Oracle Corporation, addressing more than 600 IT professionals and corporate executives on the subject.

  • was founded in September, 1999, by Richard Cravatts. It's a privately-held, Boston-based company, offering five specific categories that businesses can use in their bartering efforts. Companies can choose from the Barter Talent program, the RFP program, the Barter Rewards program, the Online Learning and Executive program, and the Media Buyer department.


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