|
April
9, 2002
Barter
Deals Expand 700% At Siebel
In the software
industry barter deals are called "concurrent transactions,"
and they're quite common. Last week Siebel Systems reported their barter
efforts accounted for $76.4 million, or 7.2% of its total software license
revenue in 2001, up from $11.6 million, or 1% in the previous year.
The disclosure is
the latest sign of a growing use of barter transactions, where typically
a vendor and a customer agree to exchange/buy each other's products.
Siebel says it's been aggressive in extracting revenue from business
partners and using its clout to require partners to prove their commitment
by using Siebel products. (Siebel does business with suppliers AT&T,
Bank of America, and Cisco.)
CEO Tom Siebel says
he discloses barter transactions because they follow a realistic and
conservative interpretation of accounting rules. He also questions why
other software companies don't disclose such transactions, which comes
down to "a fundamental issue of transparency."
Editor's Note:
This example of barter between corporations points out the use of barter
goes far beyond that of the commercial barter industry, where companies
use trade exchanges and corporate barter companies as a middleman.
Barter
On The Big Easy Is Coming
The
National Association of Trade Exchanges will be holding their 26th Annual
Convention in New Orleans next month...May 16-18. This year's focus,
"How to make big money managing your business!" For more details
go to: www.nate.org.
Surprise,
Surprise...Workers Were Big Winners In the '90s!
A cover story in
BusinessWeek showed that the big winners from the productivity
boom in the '90s were the workers, who received 99% of the gains from
faster productivity growth at non-financial corporations.
Low unemployment
rates drove up wages, the education level of many Americans made an
impressive leap in the '90s (putting them in a better position to qualify
for the sorts of jobs that the New Economy created), and a torrent of
foreign money ($1.3 trillion) coming into the U.S. created new jobs
and financed productivity-enhancing equipment investment.
Shelf
Space Incentives Include Barter Deals
Industries of every
type use incentives to build and expand their brands. Notable for using
such incentives are the food manufacturers who compete feverishly.
But, until recently,
and a FASB (Financial Accounting Standards Board) ruling, just how much
was spent by food manufacturers was always a closely-guarded secret.
Now the figures are out, as the food companies had to provide a one-time
look at what they paid for shelf space.
Incentives take
the form of give backs, rebates, and the bartering of additional merchandise.
Added together, the total amount of the incentives reported by food
manufacturers totaled $60 billion for the year 2001. (Major brands spend
13% to 15% of their sales for shelf space.)
The Federal Trade
Commission is investigating whether such practices (paying for shelf
space) is anti-competitive, after smaller companies complained they
are shut out of stores. Stay tuned...
- Interested
in reaching the entire barter marketplace? May 15 is the date all
ads for the coming issue of BarterNews must be in. Go to "Advertising"
on web page, www.barternews.com, or call Bob Meyer at (949) 831-0607.
- Global financier
George Soros shows how wealth is created. In exchange for making a
commitment to provide $4 million in financing (on a standby basis
until Jan. 1, 2003) to Bluefly Inc., he received a warrant to purchase
100,000 common shares at an exercise price of $1.68. (Stock is selling
at $1.80.) Soros is a beneficial holder of around 78% of the company's
common stock.
-
Coming next
week...information on banner ads in selected locations on the BarterNews
web site. Traffic is growing 10% per month! Get your company's message
out in front of those really interested in barter.
E-mail
bmeyer@barternews.com for more information...first come, first
served.
-
Mike Ames, founder
of TradeAmericanCard in Orange County (CA), was nominated last month
for The Inaugural Excellence in Entrepreneurship Awards. The
Orange County Business Journal sponsored the recognition program
to honor individuals for their entrepreneurial success.
-
Technology
expenditures continue to push new innovation worldwide. The U.S.
leads in high-tech, spending $203 billion in R&D (research &
development) annually. The European Union (15 nations in Europe
that trade freely with each other) spends $135 billion. The totals
include both industry as well as government funding.
-
Standard &
Poor's reports that more than $1 billion of the $12.5 billion in
hotel loans were delinquent at the end of the first quarter. Lodgings
in resort areas have been hit the hardest.
-
The nation's
businesses vacated a vast 26.4 million square feet in the first
quarter due to ailing and consolidating businesses...the national
vacancy rate is 14.7%.
-
Dawn Hudson,
Chairperson of the Association of National Advertisers, says the
average American receives more than 3,000 marketing messages a DAY.
Therefore, Hudson suggests, advertising has never been more relevant.
-
Intangible
assets continue to play a prominent role in corporate America. The
Federal Reserve Bank of Philadelphia estimates that annual investment
in intangible assets (research and development, software purchases,
and advertising) rose from 4% of gross domestic product in 1978
to almost 10% in 2000!
Fifty years
ago, tangible assets such as real estate, equipment, and inventories
represented 78% of the assets of U.S. non-financial corporations.
Today, the proportion is 53%.
-
Premium hotels
are aiming to compete with their peers (other high end hotels) through
onsite restaurants run by celebrity chefs. W Hotels, a part of Starwood
Hotels & Resorts Worldwide, has included a destination restaurant
in each of its properties. The current scenario is a reversal of
the typical pattern where the hotel would bring cache to the restaurant,
now it's the other way around.
-
It's been noted
in earlier issues of Tuesday Report that the consumer has been the
driving force to keep the current downturn/recession a mild one.
Reinforcing that
fact further is a report of the government's house price index which
surged 9.2% in 2000, and 6.9% in 2001. The remarkable real-estate
rally has seen home equity growing by $1.2 trillion, somewhat offsetting
American's stock portfolios drop when the dot-com implosion hit.
|