Tuesday Report - December 7, 1999

In 1960 retired Exxon geologist, Lewis Weeks, made the trade of his life with an Australian steel and minerals company, Broken Hill Proprietary (BHP). Weeks was able to trade on his vast knowledge and geological experience, wherein BHP okayed an agreement to pay a 2.5% royalty on everything Weeks found for BHP.

Because Weeks was a geologist and not a lawyer, he called an attorney friend who had worked with him at Exxon. Paul Temple, consequently, drafted a three-page royalty agreement between Weeks and BHP. Weeks "bartered" for Temple's services, agreeing to give him 20% of any deal. Weeks then went to work. He subsequently advised BHP to drill in the stormy Bass Strait, between Melbourne and Tasmania. With the first well drilled BHP found the largest oil-field in the Southern Hemisphere!

Both Weeks and Temple have profited handsomely from their barter agreement...the income on that royalty has amassed $40 million a year for thirty-five consecutive years!

South Americans Bartering Foodstuffs On The Internet

Latin America's first "virtual market" for the buying, selling and bartering of agricultural products is now available in Argentina via the Internet (www.agrositio.com).

Sistemas Electronics SA (SES) has pumped an initial $4.5 million into the project. Income will be earned from fees paid by interested companies signing up to offer their goods, as well as from commissions for deals done on the network.

Buyers on SES's new merchandise page are able to barter through an interactive system. Company head Mario Eijo says producers can take part in virtual auctions by making offers on products and presenting their own merchandise.

This Internet page is the first of its kind in the region, and expansion is expected very soon in Mexico, Brazil, and Uruguay.

Would American Express' entry into the commercial barter business be beneficial to the industry?

Bob Bagga, Chief Operating Officer at Ubarter.com: "I feel that they, along with other companies getting into our business, will only add credibility to our industry...as 'rising tides lift all boats.' They will bring brand, technology and, of course, the almighty dollars."

Robin Maini, Executive Director of the International Reciprocal Trade Association: "I think the entry of AMEX into the barter business will lend even more credibility to the industry as a whole. However, it is obvious that this will change the way barter companies do business...in order to stay competitive. It also means independent exchanges will yet have another reason to merge or consolidate, in order to compete with a large mega-corporation.

"I don't believe that any one company can 'take over' the industry. However, it could be a struggle for the smaller operations if they do not align themselves with other trading partners quickly.

"If AMEX does decide to enter into the barter arena without intentions of partnering up with barter companies, the only thing barter companies can do is band together and hopefully slow down AMEX's market penetration process. It is foolish to think that we as an industry would be able to keep them out."

(What's your opinion? Send along to: bmeyer@barternews.com)

National Retail Federation Launches Global Online Exchange For Retail Industry

E-commerce vendor www.i2i.com has announced a partnership with the National Retail Federation to launch a global online exchange for the retail industry.

Set for a mid-January start date, the exchange will offer retail companies a new way to buy, sell and trade retail goods, store fixtures, and warehouse equipment across borders.

NRF president Tracy Mullin says users will be able to "buy and liquidate excess inventory with a fewclicks of the mouse."

Music Becomes "Currency" for EMI's Barter Deals

The EMI Group, based in London, is the world's third-largest music company, with artists including Garth Brooks and the Beastie Boys. They recently bartered for equity in musicmakers.com and Liquid Audio, and have twenty other similar barter agreements under negotiation.

Basically the internet companies offer their shares in exchange for the right to license EMI's music...so EMI is using its music (content) as currency in the internet world.

Here And There...