The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
October 10, 2000
Coming In November...BarterNews' Special "Internet Issue"
The largest issue ever published in BarterNews' 21-year history will be published in November; it will focus on new technology that promises to transform the barter industry.
Plus, this special issue will tell the story of how a major multi-national bank has lapped the commercial barter industry by creating their own trade credits to be used for international commerce as well as b2b internet sales.
To get your company's advertising message into this special "Internet Issue" click through "Advertising" at www.barternews.com. Closing for artwork is October 20th.
Major Movie Studios Guarantee Distribution Through Barter Deal
Twentieth Century Fox, SKG, and Universal Studios Home Video have entered into a barter deal with Kozmo.com, acquiring non-cash equity minority stakes in the New York-based internet delivery service (approximately 1.4% interest in Kozmo...valued at $10 million).
In exchange for stakes in Kozmo, the movie houses are providing Kozmo with videos and DVDs at lower prices. Both sides benefit, Kozmo guaranteeing themselves a supply of videos and DVDs, and the studios enhance the distribution of their product.
Mattel Barters Its Liability
Bartering their way out of a terrible business deal is essentially what Mattel did when they moved the Learning Company. That unit, which Mattel paid $3.5 billion for only 16 months ago, was losing $1 million a day...a real drag on Mattel's stock price.
So the final barter deal, which really says "take this liability off our hands," is labeled as an "earn-out," i.e. a promise to pay a percentage of earnings in the Learning Company back to Mattel in the future. It is estimated to garner but $300 million, overall, for Mattel.
Bottomline: Mattel's snafu will top the 1997 Quaker Oats sale of Snapple, which was a $1.7 billion purchase that was then re-sold for $300 million three years later.
Did Abandonment of "Barter Offer" Contribute To New Entity's Demise?
Last week Priceline.com entrepreneurial founder Jay Walker announced he was shutting down Priceline WebHouse Club, his name-your-own price grocery and gasoline sales operations, because the company has run out of money. (That company is separate from Priceline.com.)
The main problem: Consumer-products companies weren't willing to give Walker the discounts he needed to make the site work, so he ended up subsidizing all the products the shoppers bought.
Priceline has a similar business model to WebHouse Club, but had much better success in getting off the ground because the airlines agreed to offer discounts when Priceline used a barter offer--trading warrants in Priceline to the airlines--so as to gain their discounting cooperation. Maybe the barter offer should have been extended to the consumer-products companies.
Here And There. . .
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