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December 6, 2005

Written by Bob Meyer, Editor of BarterNews

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More Feedback On “Technology’s Effect On Future Of Barter Industry” Article

First, from IRTA’s Executive Director Krista Vardabash:

For sure, technology is making possible many things. As the book, The World Is Flat by Thomas L. Friedman (Farrar, Straus & Giroux), suggests, there are many incredible changes taking place worldwide.

For the barter industry, the world is flat and quickly getting flatter! And it’s a double-edged sword. With increased collaboration power and affordable robust technology converging, some remarkable possibilities are on the horizon...but so are the incidences of rogue operations. It’s the nature of the beast.

In many fields, rogue operators are non-starters, or are eliminated before much harm is done. For instance, matching software is harmless—yet powerful, absolutely. But the worst thing that can happen is a bad swap.

Reputable systems will make quick work of getting the bad swapper out. However, in the field of credit-clearing, rogue operators typically are discovered after big damage is done.

The commercial barter industry faced this 26 years ago and gained their niche only after a long fought, expensive lobbying effort.

I’m excited and also concerned that the cashless trading industry, which commercial barter has pioneered in such a significant way, may be on the verge of a quantum leap...but also may be destined to repeat history at the same time. An investigation, such as occurred decades ago when we were much younger and less developed, could irreparably set our collective vision back.

For those of you who were around back then, imagine what it would have been like if the International Reciprocal Trade Association (IRTA) had not been formed and the IRS was successful thus in their “John Doe endeavor” to extinguish the use of commercial barter through the trade exchange model.

My concern today stems from the proliferation of barter software (for exchange networks) being marketed to commercial and non-commercial exchange networks. There is an incredible naiveté about the responsibilities involved in maintaining a solid exchange network and how to identify a system that is aiming only to expand the distribution of its own trade credit.

The technology part is easy.

Making sure that operators are honorable, ethical, knowledgeable and responsible to the public is another matter. In my position as Executive Director of IRTA, I have been exposed to many agendas.

It seems like many people or groups still have an agenda driven by the desire to be the first, the biggest, the most...in short, to claim responsibility (take the credit) for the quantum leap anticipated. This makes no sense to me. Not only is it selfish, it’s silly. Didn’t we all chuckle when Al Gore reportedly claimed to have discovered the Internet?

Sure, there is talk about being collaborative and working together, yet I still see a lot of guarded secrets, hidden agendas and blue-sky thinking, but not enough doing or doing it together.

I feel IRTA’s job at this time is to continually upgrade membership requirements (quality and management standards), educate the public, and work to steward the collaboration needed to nurture an expansive, responsible and UNIFIED cashless trading world. No small feat.

Regarding last week’s comments by Thomas Greco about Matchbin (formally known as Barter Farm) I am unaware of their agreement with eBay and I’m uncertain that I understand what Greco means about eBay lacking localization.

Perhaps he means in conjunction with Matchbin, eBay can potentially replace all the local “swap sheets” that circulate in communities all over the world. Super...then add a non-cash trade credit...a UC perhaps...and now we’re cooking.

Regarding the founders of Matchbin, Jon Firmage and Josh Higgenbothem, I liked their enthusiasm and direction when I met them at the IRTA Conference in 2003. They don’t issue a trade credit, but their web site is looking great and the matching capabilities are cool...and their focus on local, but global is right on. Other entrants similar to Matchbin are equally impressive, e.g. Swapz.com and SwapAce.com.

I still strive for the Visa vision for the cashless trading world. And I truly believe that this quantum leap will come from within what we know of as the commercial barter industry. I hope it will start to emerge soon, and be led by gracious, ethical, benevolent leaders who will see beyond their own “fiefdom” aspirations or personal glory pursuits.

I wish to thank Tom Greco for sharing his thoughts and insights. This kind of communication is precisely what our industry needs more of.

Krista Vardabash
krista@irta.com


Barter Industry Should Embrace Open Cyber Trading Systems

From Peter Tucker, President CTEX Group

The writing is on the wall, regarding threats to the commercial barter industry from cash or new cash-equivalent online systems. Because, essentially these live 24/7 online systems are producing technology that empowers the buyer to clinch “deals” (smartshopper.com) that might otherwise be a market open to a barter pitch. 

These systems can monitor specific products by location, price, you name it...and then notify the buyer so that a transaction can be completed at the very last minute. Thus it enables the seller to practice a form of yield management. 

This is particularly true with intangible services such as hotel accommodations, which is the focus of our group. Online technology allows rooms to be sold as commodities, prices rising and falling with market demand. Try getting a room in New York City next week on barter. It’s almost impossible to find for cash, in fact Intercontinental Hotels do not have a single room available mid-week.

The technology itself enables the sharing of small transaction fees between aggregators (Mobissimo.com, Kayak.com, Sidestep.com, etc.) and travel companies, and is offset by enormous volume when there are open markets.

This technology allows for “accessible/available” products and services to be available in database after database, but on a live, first come, first served basis.

For example, a company might have 100 SKU’s of product available, however the ubiquitous nature of the online technology has these products omnipresent on 200 different sites simultaneously!

Seemingly 20,000 units are available in cyberspace at a particular instant. That’s a mind-boggling 2000% factor, that’s leverage. In the blink of an eye these rooms can be sold before the hesitant buyer hits enter!

If the commercial barter industry embraced open cyber trading systems and volume based fee sharing, similar leverage factors of 2000% and greater could be achieved. That’s velocity.

(Editor’s note: The CTEX Group www.ctex.com has been working within the barter industry since 1992, providing various services to hoteliers.)


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Thai Countertrade Deal: Wings For Wings!

The Thai military, which last fought a war in 1987 against tiny neighbor Laos, wants to spend $6.6 billion on upgrades over the next nine years, according to their defense minister. 

The first stage of the three-part planes, ships and tanks spending plan would focus on repairing and replenishing weapons, improving civilian rescue operations, and economic development.

Defense Minister Thammarak Isarangura said barter is the country’s top priority for procurement. And he has full backing of Prime Minister Thaksin Shinawatra, who champions barter deals so they can reduce the country’s trade deficit. Their goal, trading Thailand’s abundant farm goods for costly hi-tech military products.

During trips to Stockholm and Moscow last year he floated the idea of trading Thai chicken for fighter jets either from Russia or Sweden, despite the air force’s preference for USA’s F-16s.

“They both have wings and they can both fly,” Thaksin says.

 

Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.


 Stanford University’s Barter Deal With Google Has Huge Pay Off!

Katherine Ku, director of Stanford University office of Technology Licensing reported that the university has made $336 million on the sale of its stock in Google Inc., the Internet search-engine giant created by two of the university’s graduate students.

Stanford received 1.8 million shares of Google in exchange for allowing Google to use key Internet search-technology developed by company founders Sergey Brin and Larry Page while they were graduate students at the university.

Stanford holds the patent on the technology, which the university licenses to Google under a multi-year deal.


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Next Big Wave In Housing Will Be Penturbia!

A retired real estate professor from the University of Washington, 84-year-old Jack Lessigner, says the next big wave in housing will be a move away from the classic suburbs and toward remote parts of the country. 

His research says the growth of the classic suburbs has actually been slowing since the 1970s, and it will only accelerate in the coming years.

Lessinger’s bottomline is that suburbs are too crowded and too expensive...a victim of their own success. As a result, many Americans will opt for a lifestyle that is calmer, less densely populated and cheaper. They’ll flock to a place Lessigner has termed “Penturbia,” urban developments in rural regions.

This rural living will be powered, in part, by the Internet, which lets many folks do business from just about anywhere.

“Suburbia has grown old,” the professor says. “It was a paradise in the 1940s and 1950s. It was everything we wanted. A wonderful innovation, but now suburbia has become too big, too unwieldy, too expensive.”

Lessigner says one of the most important parts of housing demand is fashion. Today’s major trend is toward open spaces. The octogenarian real estate professor has just authored his sixth book, Your County—Boom or Bust? The Rise of Penturbia & The Fall of Suburbia.


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William B. Tanner Dies

Back in the 1970s, one of the early corporate barter companies was the Memphis based William B. Tanner Company. It was headed by Bill Tanner, a most colorful personality who built a huge company which later sold to Media General. 

BarterNews, Issue #3, had an extensive article about Tanner. It described the way he traded promotions and jingles, his company created in-house, for a wide variety of media from radio stations around the country.

Bill Tanner died December 1, at Methodist University Hospital in Memphis at the age of 75.

Here & There...

  • TeleTrade International reports total annual combined transactional volume was $86,830,085 for the period through November 30, 2005. The greatest growth came at eValues.net where combined transaction volume totaled $53, 480,000, an increase of $13,400,000 over 2004 volume. For further information contact CEO Gary Lasater at gary@teletrade.net
     

  • ITEX Connecticut will hold their annual Holiday Show on December 11, from 11 a.m. to 4 p.m., at 707 on Main, in Monroe. For further details call (888) 294-6393.
     
  • Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up.
     
  • Last week we reported on the Dubai Hotel securing the Trump name in a non-cash deal. The country, a Persian Gulf monarchy with a $27-billion economy, continues to push forward making outside (non-oil) investments. Booming on the back of record oil prices this year, Dubai bought a stake in DaimlerChrysler, the world’s No. 5 automaker.DP World,

    Dubai’s port company, agreed to acquire Peninsular & Oriental Steam Navigation Co. for $5.7 billion, which will peg them as the world’s third-largest port operator, gaining container terminals from Europe and the U.S. to China. (Just a year ago they paid $1.15 billion for CSX Corp.’s container terminals in Asia and South America, as well.)
We welcome your comments, questions, and observations.
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