The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
August 21, 2001
Will Venture Capitalists Take Barter Industry To The Next Level
In Monday's (August 20th) Orange County Register, the second largest newspaper in Southern California, a full page was devoted to our headline's question. Companies mentioned in the article included BarterNet, AllBusiness, Tradaq, and Ubarter.com.
Noted, and quoted per Bob Meyer, publisher of BarterNews, was the fact that expansion, by the venture-backed barter companies, hasn't occurred as fast as anticipated, but the potential and expectations are still in place.
Two members of Orange County based TradeAmericanCard were interviewed, and both expressed a view that large networked trade exchanges would be superior, i.e. able to offer them more opportunities to trade.
Mike Ames, founder of TradeAmericanCard, stated, "It's too hard to stay as a stand-alone exchange in any industry. If you hook up with the mother ship, you're able to strike big deals."
TradeAmericanCard, one of the BarterNet optionees, thinks BarterNet's acquisition plans (to acquire up to 30 independent trade exchanges) will come together sooner or later. "We're not in a big hurry. If it takes an extra year, that's OK with me. Let's do it right," Ames exclaimed.
BarterNet's COO, Jim Rossner explained, "We have acquired the first exchange in San Francisco, and we're close to acquiring two more. However," he added, "it's going slower than anyone imagined. The drop in the NASDAQ has affected our ability to raise money."
from AllBusiness, Tradaq, and Ubarter apparently were
not contacted, as they received no mention in the article.
Delta Continues To Reap Dividends From Barter Deal
Delta Airlines is planning to sell another 10 million shares of Priceline.com "as soon as practicable" according to a notice with the Securities and Exchange Commission.
Delta, the nation's third-largest carrier, holds 23.2 million shares or 10% of the name-your-own-price online retailer before the planned sale.
shares were acquired through warrants Delta received when
they agreed to be the first major carrier to sell some
of their excess inventory (airline tickets) through Priceline.
Delta previously sold Priceline stock in two different
transactions which totaled approximately $270 million!
Ad Slump Bodes Well For Barter Industry
According to Jack Myers, a consultant who follows the economics of media trends, today's ad slump will continue until 2003. That's because it takes about 18 months to two years after advertisers cut their ad spending for them to increase their budgets again.
Media spending (which will total $196.7 billion in the U.S.) is expected to be down overall about 4% this year, but some sectors, like magazines, are reeling and down significantly more.
In addition the choices for advertising continues to grow. For example, it's expected that by 2005 the average household may have 180 television channels to choose from.
Another factor today is the increasing clout that ad agencies possess. Last month Interpublic Group, the world's largest advertising holding company, indicated they would pool more than $40 billion in global ad-buying power in a bold bid to get better pricing for their clients.
"The U.S. consumer isn't acting as if there is a dramatic downturn at hand."
in July opened up their pocketbooks and bought more of
virtually everything except autos, according to the Commerce
Department. The economic resiliency of consumers has surprised
many financial experts, especially as businesses have
been cutting their spending to the bone. (Consumer spending
accounts for two-thirds of the gross domestic product.)
Here And There. . .
We welcome your comments, questions, and observations.
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