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August 7, 2001

DTN Weather Services Bartered

Traffic Pulse Networks (TPN), a unit of Mobility Technologies, and DTN Weather Services have entered into the Traffic Pulse Partnership Program to develop high-end 2-D and 3-D television graphics and maps to display unique traffic information on TV stations nationally. (WNJU-47 New York will be the first station to showcase the graphic-rich traffic product.)


Industry Standard Magazine's Third Internet Summit Looks At Implications Of Funding Drought

The Third Annual Internet Summit, a conference hosted by the Industry Standard, was held the first week of August at the tony Four Seasons Aviara, in Carlsbad, California. Here's a summary of the messages at the summit.

According to Mary Meeker, the Morgan Stanley analyst who became famous for charting the rise of the Internet economy, some $727 billion in wealth has been lost by the plunging market value of some 362 internet companies between December 1999 and mid-July. But she indicated that the biggest problem the U.S. suddenly now faces is that of not being willing to continue to take risks.

Meeker estimated that only 24% of the companies that went public in 1999 and 2000 are trading above their offering price, compared with a 53% average historically.

She says the chance to get rich by going public has receded with the stock market's downturn—suggesting that there will be about 20 technology IPOs this year, and possibly 30 to 50 next year—compared with 318 in 1999. Meeker warned that it might take another six to 18 months for the technology sector to work through the excesses created.

John Doerr, the VC known for extolling the wealth created by the Internet, says we're running into an innovation shortfall and contends that Congress should put up $2 billion a year in scholarships to turn out 100,000 more trained technologists a year. Doerr also believes U.S. residency should be granted to graduating foreign-born engineers, "Let's staple a green card to their diplomas."


Recent Events Show Progress In China

The Shanghai government is lifting restrictions on property purchases by foreigners and will conduct future land sales through an open bidding process. The new rules will allow foreign individuals to purchase a class of property that until now had been off limits to them.

Shanghai's new rules are part of a wider effort in China to spur the domestic property market, which as been slowly digesting massive oversupply resulting from a building boom in the early 1990s. The move reflects a government effort to wean the country off the export-oriented growth it has relied on for two decades.

By encouraging people to buy homes, the government hopes to boost spending on consumer goods—televisions, refrigerators, air conditioners, etc.—a pillar of the U.S. economy for decades.

Secondly, China has moved a small step closer to letting foreigners participate fully in the country's domestic stock market, as an approval has been given that marks the first time a partly foreign-owned entity will be allowed to trade shares in China's A share market.

Heretofore, Class A shares had been reserved for local investors only. But now, China International Capital Corp.—a joint venture of U.S. investment bank Morgan Stanley and China Construction Bank—will be allowed into this market. According to Q.C. Hua, vice president at J.P. Morgan in Shanghai, "This is a big, big development."



Here And There. . .

  • The Wall Street Journal reports that this year was the worst in a decade for magazine publishing...two business magazines, Fast Company and Inc. have seen ad pages drop 47% and 44% from the year earlier. (Both relied on technology and financial advertising which dried up in the first half of the year.)
  • What's the value of a client? Ameritrade says its $500, as they paid $154 million for 316,000 National Discount Brokers' clients, in the recent acquisition of the online brokerage unit of NDB.
  • Egypt, in trying to promote exports to improve its balance of trade and ease pressure on the pound, is trading $10 million of animal feed, fruit, and rice to France in exchange for wheat.
  • Telephone marketing, sales generated through telephone calling, jumped to $611.7 billion in 2000, according to a study by the Direct Marketing Association. Sales in 1995 were $367 billion, and are expected to jump to $939.6 billion in 2005.

    Sales generated through the telephone outpace any other marketing method. Last year newspapers generated $239 billion, magazines $91.3 billion, and television $117.6 billion.

  • Fashionmall.com operates a variety of vertical shopping and content portals in the fashion, beauty, and lifestyle space. Recent 2nd quarter earnings showed barter revenue of $309,000, representing 36% of total revenue compared to $120,000 representing 10% of revenue in Q2 2000.

  • Germany's 70-year-old law against discounts is being abolished, so shoppers will be able to use coupons and haggle over extras--like a stereo system or leather upholstery in a new car.

    Under the old law, retailers were prevented from offering promotional offers such as "buy two, get one free" or discounts of more than 3% outside of traditional summer and winter sales.

    There is fear in some quarters that uncontrolled competition will shut out small businesses. The winner in the coming change will be the consumer.

    Barter companies will find smaller stores wanting to fight back not only with more service, but with another weapon against the larger companies—offering their clients a barter opportunity.

  • Americans have invested $22 billion in emerging-markets mutual funds. In the last 10 years, through 2000, the average total return on emerging-market funds tracked by Morningstar Inc. amounted to just 2% a year.

    That compares with a 17.4% average annual return on the blue-chip U.S. Standard & Poor's 500 index in the same period.

  • Shipments of loaded shipping containers headed to Asia fell 6% in June, the second monthly decline...the last time shipments declined for two straight months was in 1993. Sluggishness in Asian economies and the strong U.S. dollar contributed to the trade slump.

 

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