The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
May 1 , 2001
Excess Inventory Buildup Will Be Around For Several Years
Economists believe that GDP growth will suffer in the months ahead as the technology buildup becomes more pronounced. And there are parallels between today's situation and the real-estate busts of the late 1980s and early 1990s.
Trends are currently unfolding which indicate inventories of everything from computers, routers and fiber-optic networks, to all sorts of internet gear are piling up around the country...with excess amounts reaching $100 billion. (Last year spending on technology equipment reached $677 billion, but is expected to drop 20% this year.)
Expect prices to plummet (computer prices fell by about 40% on an annualized basis in the first quarter of this year...the steepest slide since the Bureau of Labor Statistics began tracking them in 1991) and more barter to be used, as inventories must be moved.
Alsop Says Reality Returning to Venture Capital World
Stewart Alsop, a general partner at Menlo Park (CA) venture firm New Enterprise Associates, says that start-up companies aren't worth what they used to be, and that reality is returning to the marketplace.
According to Alsop it wasn't until January that investors woke up to the cold truth that the heady days (when stock market investors would give multi-billion dollar valuations for new, often profitless, companies) were over.
He points out that so far this year valuations for companies raising their first venture money have fallen about in half. Although it will take some time for entrepreneurs to concede that they're going to have to sell a big stake in their company, in order to raise the money they need...and that learning process is just starting to happen.
The drop in valuations both in public and private markets means the days are over when venture capitalists could give investors a return of 10-times on their money. Returns are expected to fall to historical levels in which venture capitalists quadruple the money they manage.
Advertising In Trade Publications Generates Huge Returns
According to an independent study conducted by Fairfield Research, some 18 million workers regularly made corporate purchases based on seeing an ad run in a trade publication.
Gordon T. Hughes II, President/CEO of American Business Media, said, "This study goes a long way to answer the media buyers' question of, 'What do I get for advertising in trade publications?' We now have a national benchmark of ad-driven sales and can track that for our members just as we track other industry vital signs.
"As well, advertising executives at our members' clients can readily justify their buys with hard figures. Based on this study, their average cost-of-sale is only eight percent." To advertise in the barter industry's only trade publication, BarterNews, see www.barternews.com, click through "Advertising." Closing date for the next available issue is July 15th.
Here And There. . .
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