Top Image




 
Google
Web www.barternews.com

This Section Contains Commentary From Bob Meyer Which Has Appeared In Various Issues Of The Tuesday Barter Report.

 

From the desk of Bob Meyer....  2006
 
December 19, 2006 IMS Flying High!
December 12, 2006 Barter Industry Appearances At Major Events A Positive Move
December 05, 2006 "We Are Not Swappers!!" (Krista Vardabash, IRTA Executive Director)
November 28, 2006 IMS Does It Again...Acquiring Steve Webster's Alliance Barter
November 21, 2006 IRTA Sends Formal Invitation To NATE For Unified 2007 Conference
November 14, 2006 Former Trade Exchange Owner Ray Bastarache Scores Again...Turning $50,000 Into $5.2 Million
November 07, 2006 400,000 Europeans Prefer Barter
October 31, 2006 Dale & Vardabash To Address Global Barter Conference In Singapore
October 24, 2006 Idea + $27 = Nobel Peace Prize!
October 17, 2006 Barter Plays Role In Google's Goal To Ultimately Broker Ads Everywhere!
October 10, 2006 ITEX Prepays Entire BXI Acquisition Debt
October 03, 2006 The Barter Company Celebrates 10th Anniversary
September 26, 2006 Kyoto Treaty Suggests Barter As Way To Stem Pollution
September 19, 2006 Commercial Barter Industry Looks To Emulate Visa Card Model
September 12, 2006 UC Celebrates Tenth Anniversary
September 05, 2006 Hewlett-Packard Creates "Tycoon Currency" To Stretch Its IT Resources
August 29, 2006 Travelocity and Points.com To Offer Program For Purchasing Travel Services Using Frequent Flyer Miles
August 22, 2006 Report Confirms New Media Order Emerging
August 15, 2006 If You Can't Get Blood Out Of A Turnip, Take The Turnips!
August 08, 2006 Red Paper-Clip Barterer Lands Book Deal
August 01, 2006 Google Radio Kicked Off
July 25, 2006 China's Ambitious Thinking Involves Barter On Highest Level
July 18, 2006 Gift Cards Have Become Big Business For Restaurants
July 11, 2006 Facebook Structures Barter Deal With Interpublic Group To Drive Ad Revenue In Win-Win Arrangement
July 4, 2006 Cornerstones To Success Remain Constant
June 27, 2006 Growth Of World Trade & Countertrade Continues Upward
June 20, 2006 Bartering Gift Certificates--A $55 Billion-A-Year Industry--Is Expected To Grow Dramatically
June 13, 2006 Trade Dollars Are Derivatives And Enable Small Business Owners To Manage Risks More Effectively
June 6, 2006 Size Does Matter In The Barter Business
May 30, 2006 Is Barter Industry Ready For The Coming Technology Tsunami?
May 23, 2006 The World's Largest Private Currency Continues To Soar!
May 16, 2006 Algorithms Will Be Positive Assist for Barter World
May 9, 2006 "You can observe a lot just by watching."
May 2, 2006 Burgeoning Multi-Billion-Dollar Bartering in Film & TV
April 25, 2006 Value Subjective, Not Objective... That's Why Barter's So Exciting
April 18, 2006 A Talented Guy Has Left The Barter Industry
April 11, 2006 Industry Hasn't Embraced Enormous Opportunities Available
March 21, 2006 The Changing Corporate Barter Marketplace
March 14, 2006 It Would Be Interesting To Know
March 7, 2006 These Are Exciting Times
February 28, 2006 Business People Love Barter - It's a Proven Tool
February 21, 2006 Accreditation & Training Going Strong
February 14, 2006 Google Uses SmartBarter Technology
February 7, 2006 Checking Out A Trader
From the desk of... 2014
From the desk of... 2013 From the desk of... 2012
From the desk of... 2011 From the desk of... 2010
From the desk of... 2009 From the desk of... 2008
From the desk of... 2007 From the desk of... 2006

From the desk of Bob Meyer...12/19/06

IMS Flying High!

International Monetary Systems had record revenue and trade transactions for November. Trade volume totaled more than $11 million in sales. (IMS only reports one side of the barter transactions. Most barter companies report both sides.) That $11 million figure was an increase of 80%, compared to $6,100,000 for the same period last year.

Gross revenue billed was nearly $1.2 million, versus $696,000 for November of last year...a 72% increase. And 195 new clients were enrolled in the IMS barter network last month, the second highest total in the company's history.

For more information on IMS: www.internationalmonetary.com.

The New York Times Article On Trade Exchanges Inaccurate

On Sunday, December 10, an article titled, "Taxing Virtual Economies" discussed taxing online video games in which players work, play and increasingly earn real money...income that some argue should be taxed.

In the article one paragraph jumped out at us...as reprinted below:

Taxing virtual economies actually has a precedent. In the ‘70s, the IRS cracked down on so-called barter clubs, an estimated $200 million economy in which club members earned "trade dollars" in a virtual currency, either by selling goods or performing services. In 1980, the IRS ruled that such transactions could be taxed, even though no actual money was involved. The clubs quickly dried up.

The IRS ruling for barter transactions did not occur in 1980. It was in 1982 that the Tax Equity & Fiscal Responsibility Act (TEFRA) was enacted. Furthermore, the commercial barter industry worked with the IRS in the formation of this Act to provide a legitimacy to the industry.

Under TEFRA trade exchanges (commercial barter clubs) were considered third party record keepers...the same as banks, credit card companies, and stock brokers. And they provide 1099s to the government on their clients' transactions. 

Additionally, the notation that "the clubs quickly dried up" is incorrect as well. The industry is alive and well, with hundreds of trade exchanges in the U.S., and an additional 400 or so exchanges operating world wide.

National Venture Capital Association Says Immigration Major Source Of Vitality

A new study from the National Venture Capital Association titled, "American Made: The Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness," points out some little known facts about the vitality that immigrant entrepreneurs bring to our shores.

According to the report, over the past 15 years, immigrants have started 25% of U.S. public companies that were venture-backed. These businesses employ 220,000 local people, and have a current market capitalization that exceeds $500 billion. Further evidence indicates that foreign professionals in certain fields, such as computer science and biotechnology, create jobs and wealth. And, thus, are important contributions to our economy.

Intel Corporation's Venture-Capital Arm Reaches $1 Billion In 2006

The Santa Clara (CA) chip-maker has long been among the most active venture-capital investors, and has crossed the billion dollar threshold for annual investments for the third time in 2006. (In 1999 the firm's VC division invested $1.2 billion, and in 2000 $1.3 billion.)

About 56% of the dollars Intel Capital invested this year went to companies based outside of the United States. Recent investments in Vietnam, China, and Germany reflect the company's continued focus on firms that are experiencing rapid growth in technology adoption in other countries.

Top


From the desk of Bob Meyer...12/12/06

Barter Industry Appearances At Major Events A Positive Move

In November Bartercard representatives attended the 12th Annual Worldwide Leadership Conference at the Doha Marriott Hotel in Qatar. An estimated 60,000 participants listened to some of the world's greatest speakers--Stephen Covey, Jack Welch, Ken Blanchard, and Mark Sanborn.

Earlier in the month IRTA Executive Director Krista Vardabash and President Lois Dale, along with Dr. Lee Oi Kum, Executive Chairman of BarterXchange Singapore, spoke at the Global Entrepolis Singapore (GEX) 2006 Conference.

Such efforts over time will pay big dividends in an industry that needs to actively seek out all exposure possible. Since perception is reality, the only way to change today's perception is through education and action.

The power of using a trade dollar currency to facilitate that most profitable incremental business can then be more readily understood. In short, it's time for a more ambitious vision to move forward. If our industry continues to walk on the same path, conducting "business as usual" we can only expect the same results.

Rubbing elbows and dialoguing with those outside our usual sphere is an excellent first step. The mover in the universe is thought...what we imagine we can become.

Google Testing Radio Ad Sales

After the completion of a lengthy integration of dMarc Broadcasting, Google is now testing software that will help make advertising on radio more efficient and cost-effective. The move is seen as a way to take Google's successful online-ad formula into the realm of traditional media.

The new system lets companies upload their radio spots to Google and indicate how much they plan to spend, where the ads will run, the stations they will play on and at what time.

Google's ambitious efforts to take over advertising in all areas of mainstream media could take many years to fully implement, because they will be up against the Madison Avenue establishment. (They've already experienced several failures at penetrating the print market.)

Gift Cards Stay Popular Despite Breakage

The National Retail Federation expects shoppers to buy close to $25 billion in gift cards this holiday season. They're one of the most popular gifts in America...yet there are concerns.

In August, the federal Office of the Comptroller of the Currency told banks that they should disclose their terms and conditions in a way that both giver and getter could clearly understand. (Almost all bank cards levy purchase fees of a few dollars, and charge other fees if the recipient doesn't use them up within six to 12 months. Gift cards from retailers are better but not perfect.)

And Research firm TowerGroup figures that nearly $8 billion of gift-card money will ultimately end up unused this year. That's a considerable amount of breakage.

Top


From the desk of Bob Meyer...12/05/06

"We Are Not Swappers!!"
(Krista Vardabash, IRTA Executive Director)

A November article in The Wall Street Journal about online sites promoting the art of barter followed their usual pattern of reporting examples and opinions on both sides of a question.

Most of the article focused on various online sites that offer direct, one-to-one trading opportunities for members. Krista Vardabash was called and the article alluded to her conversation with the author:

"Not everyone is convinced online bartering, at least pure direct-trading sites, will work. Krista Vardabash, executive director of the International Reciprocal Trade Association, says Web sites that count on direct trading are impractical. ‘It's for the same reason that old-fashioned barter didn't work,' she says. ‘Eventually some of them are going to find out that they have to introduce a trade credit.'"

In a follow-up conversation with Vardabash, she told me that the reporter contacted IRTA to inquire about online trading, and wanted statistics regarding swapping sites. Vardabash says she explained to the reporter that swap sites are a different model than commercial trade exchanges.

She then provided the reporter a brief tutorial on what commercial exchanges do and how they operate. She explained that a trading unit is necessary to make more swaps happen, because of the restrictive nature of direct trading...which is what most swapping sites facilitate.

Vardabash said it was good to be quoted in the WSJ, but thinks the idea of having commercial trade exchanges lumped together with swapping sites is an indication that more education is needed. She indicated that perhaps the word barter is doing the commercial barter industry more harm than good...concluding vigorously that we are not swappers!!

Readers, what are your thoughts?

Billionaire Encourages Young People To Government Service

Samuel Heyman has amassed a fortune in real estate, building materials and chemicals. And today the 67-year-old American investor also owns a part of one of the world's most storied financial markets, the London Stock Exchange.

Educated at Yale and a graduate of Harvard Law School, Heyman started his career in the Justice Department as a trial lawyer during the administration of John F. Kennedy, earning $2,500 a year. Five years later, the early death of his father in 1968 brought him back to his family's real estate business in Connecticut.

He still encourages young people to go into government service, noting in a 2002 interview with The Wall Street Journal that 30% of his fellow 1963 Harvard Law graduates went on to work for the government, but only about 3% of 2001 graduates did.

(He has donated $45 million to found the Partnership for Public Service, a nonprofit agency that aims to motivate graduates to consider jobs in the federal government.)

Think Tank Changes Name To Peterson Institute

Peter Peterson is a former U.S. Secretary of Commerce and the senior chairman of Blackstone Group, a private investment banking firm he co-founded in 1985. He is an outspoken advocate of reducing the U.S. budget deficit and has authored two books on the subject. Peterson has also been chairman of the Institute for International Economics since its founding in 1981.

The Institute, a prominent voice in policy debates over globalization and free trade, is changing its name to the Peter G. Peterson Institute for International Economics--or the Peterson Institute, for short--in honor of the think tank's founding chairman.

China Becoming R&D Center For Pharmaceutical Companies

Major drug manufacturers around the world are eyeing China as the answer to sophisticated laboratory services. And they see China as an emerging competitor to India...long the most-popular destination for outsourcing chemistry research and drug development.

Estimates to develop and market a new drug often run as high as $1.2 billion. Much of that cost goes for the slow process of sifting through thousands of compounds, in hopes of finding one that works against the disease being targeted.

In the U.S., the overall cost of a chemist to do drug development work is around $250,000 a year. In China, chemists with similar educational backgrounds may be hired for as little as $25,000 a year.

Top


From the desk of Bob Meyer...11/28/06

IMS Does It Again...Acquiring Steve Webster's Alliance Barter

International Monetary Systems (OTCBB:INLM), continues its "PacMan-like" focus of acquiring the nation's top trade exchanges. Their latest coup being Alliance Barter, one of the best operated exchanges in the country with an especially strong trade dollar. The Rochester NY-based Alliance serves clients in Buffalo and Syracuse, with a Canadian office in Toronto.

Don Mardak, CEO of IMS, says this merger will open the door for expansion into Canada, in addition to bringing a wealth of new products and services into the IMS Barter network.

Steve Webster, the founder and owner of Alliance Barter, is a long-time respected leader in the commercial barter industry and a member of the IRTA Barter Hall of Fame. He is the only person who has been president of both industry trade associations, IRTA and NATE.

This is Steve Webster's 29th year in the barter business. An excellent cover story on Alliance Barter was published in BarterNews, to view the article click on www.barternews.com/pdf/34-37Alliance.pdf.

For more information on IMS: www.internationalmonetary.com.

Silicon Valley Hospitals To Barter Patient Data

If you had some health challenges and had to be hospitalized several times you know the antiquated methods for acquiring a patient's health data, i.e. filling out numerous forms, over and over, with the same information, even when the patient's stay is in the same hospital.

The exchange of data in Silicon Valley is going to change that scenario. Three area hospitals (L. Packard Children's Hospital, El Camino Hospital in Mountain View; and Stanford Hospital/Clinics) along with the Smart Health initiative will undertake the creation of a unified electronic patient record that will be available to doctors and patients anywhere, anytime.

By exchanging such information, lower costs for local health care providers will be realized, and it will facilitate improving the quality of care for everyone.

IRTA Releases Universal Currency (UC) Report

Trading among IRTA-member trade exchanges, which use a trade credit called "Universal Currency," was brisk in October, according to a report from UC trade broker Jen Ashworth.

The top three traders for the month were Advantis International, IMS Barter, and Florida Barter. The newest member to the UC system is Greenapple Barter, located in Pittsburgh (PA).

Also noted was San Antonio-based Alamo Barter, which sold over $25,000 worth of toys, tools and showroom merchandise in October, and another $27,000 the first 15 days of November.

China's Tourism Sector Takes Off

China's National Tourism Administration says the industry is booming. A lot of it has to do with China's per-capita income, which surpassed $1,700 last year and has stimulated domestic tourism.

Economists have maintained that once incomes get past $1,000, people have money to spend on things besides necessities.

Meanwhile, an influx of foreign visitors is expected...in addition to the 2008 Olympic Games, Shanghai will hold the World Expo in 2010, while Guangzhou will host the 16th Asian Games that same year.

Economist Reveals How Home Values Affect Economy, GDP

Jan Hatzius, chief U.S. economist at Goldman Sachs in New York, says that modern mortgage finance has magnified the effect of home values on spending.

According to Hatzius, when people take cash out of their homes through home-equity loans and refinancings, which they were doing at an annualized rate of $558 billion in the first quarter of 2006, they tend to spend about 50-cents of every dollar outside home improvement.

If house prices merely stabilize, people's diminished ability to use their houses like automated-teller machines would subtract about 0.75 percentage point from annualized GDP growth in 2007.

Top


From the desk of Bob Meyer...11/21/06

IRTA Sends Formal Invitation To NATE For Unified 2007 Conference

The commercial barter industry has had two parallel trade associations for the past twenty-two years. Much has changed within the industry over the years. Not only have many of the players (exchange owners) changed,  but the agendas of decades ago are no longer applicable.

Given the aforementioned, along with some new challenges the industry's two associations are facing, the International Reciprocal Trade Association (IRTA) Board of Directors sent a formal proposal to the National Association of Trade Exchanges (NATE) Board of Directors on October 16, 2006, suggesting that the two organizations stage a unified annual conference.

IRTA's Executive Director recently sent the following statement to BarterNews:

"The IRTA felt that in the current environment of exchange consolidation in the U.S. and with fictitious associations claiming to represent the industry (i.e. NABA), it was critical to join forces.

"The strongest and most reputable exchanges have supported either IRTA or NATE over the last 25+ years. These are the exchanges that should continue to lead and leverage the strengths of each other.

"We understand that the NATE board will be considering this proposal at their next board meeting, and we hope to report soon that there will indeed be a joint conference for both owners and brokers in 2007."

IMS Pushing Ahead As 3rd Quarter Report Indicates

International Monetary Systems (OTCBB:INLM) has filed its third quarter report, for the period ending September 30, 2006. Noted in the report was its recent acquisition of National Trade Association, as well as other investments in the company's infrastructure and the continued commitment to internal growth.

Gross revenues increased to $1,687,573, compared to $1,674,125 for the third quarter of 2005. Total expenses were $1,803,266 versus $1,559,723. The company's year-to-date consolidated gross revenue for the nine-months ending September 30 totaled $5,240,400, compared to $4,413,101 for the same period in 2005, an increase of 19%.

Total expenses for the nine months ending September 30 were $5,241,215, compared to $4,091,555 for the same period last year, an increase of 28%.

Year-to-date loss for the first nine months of 2006 was $192,369, compared to a profit of $120,656 for 2005. Assets grew 96% during that period from $7,937,986 at the end of 2005, to $15,168,231 at the end of September 2006.

IMS Barter is a national trade exchange with more than 15,000 customers, representing 22,000 cardholders in 40 U.S. markets. For additional information on IMS: http://www.internationalmonetary.com

MBA Program Designed For Sustainable Business Studies

The Bainbridge Graduate Institute (BGI) in Seattle (WA), a privately run institution, is specifically designed to prepare students to build enterprises that are not only financially viable, but socially responsible and environmentally sustainable.

Founder Gifford Pinchott III, has helped launch over 700 businesses. He devotes one-third of his time to facilitating groups addressing environmental issues. For more information see http://www.bgiedu.org.

Cashless Vending To Take Off

Some $1.46 trillion in consumer spending, on transactions valued at less than $5, occurred last year. Now new cashless technology on vending machines, which will accept credit and debit cards (taking MasterCard's PayPass cards which are waved in front of a reader) is underway.

Coca-Cola and MasterCard International plan to equip 1,000 vending machines in the Philadelphia area. It is the biggest roll-out of its kind in the $40 billion U.S. vending industry.

Top


From the desk of Bob Meyer...12/05/06

"We Are Not Swappers!!"
(Krista Vardabash, IRTA Executive Director)

A November article in The Wall Street Journal about online sites promoting the art of barter followed their usual pattern of reporting examples and opinions on both sides of a question.

Most of the article focused on various online sites that offer direct, one-to-one trading opportunities for members. Krista Vardabash was called and the article alluded to her conversation with the author:

"Not everyone is convinced online bartering, at least pure direct-trading sites, will work. Krista Vardabash, executive director of the International Reciprocal Trade Association, says Web sites that count on direct trading are impractical. ‘It's for the same reason that old-fashioned barter didn't work,' she says. ‘Eventually some of them are going to find out that they have to introduce a trade credit.'"

In a follow-up conversation with Vardabash, she told me that the reporter contacted IRTA to inquire about online trading, and wanted statistics regarding swapping sites. Vardabash says she explained to the reporter that swap sites are a different model than commercial trade exchanges.

She then provided the reporter a brief tutorial on what commercial exchanges do and how they operate. She explained that a trading unit is necessary to make more swaps happen, because of the restrictive nature of direct trading...which is what most swapping sites facilitate.

Vardabash said it was good to be quoted in the WSJ, but thinks the idea of having commercial trade exchanges lumped together with swapping sites is an indication that more education is needed. She indicated that perhaps the word barter is doing the commercial barter industry more harm than good...concluding vigorously that we are not swappers!!

Readers, what are your thoughts?

Billionaire Encourages Young People To Government Service

Samuel Heyman has amassed a fortune in real estate, building materials and chemicals. And today the 67-year-old American investor also owns a part of one of the world's most storied financial markets, the London Stock Exchange.

Educated at Yale and a graduate of Harvard Law School, Heyman started his career in the Justice Department as a trial lawyer during the administration of John F. Kennedy, earning $2,500 a year. Five years later, the early death of his father in 1968 brought him back to his family's real estate business in Connecticut.

He still encourages young people to go into government service, noting in a 2002 interview with The Wall Street Journal that 30% of his fellow 1963 Harvard Law graduates went on to work for the government, but only about 3% of 2001 graduates did.

(He has donated $45 million to found the Partnership for Public Service, a nonprofit agency that aims to motivate graduates to consider jobs in the federal government.)

Think Tank Changes Name To Peterson Institute

Peter Peterson is a former U.S. Secretary of Commerce and the senior chairman of Blackstone Group, a private investment banking firm he co-founded in 1985. He is an outspoken advocate of reducing the U.S. budget deficit and has authored two books on the subject. Peterson has also been chairman of the Institute for International Economics since its founding in 1981.

The Institute, a prominent voice in policy debates over globalization and free trade, is changing its name to the Peter G. Peterson Institute for International Economics--or the Peterson Institute, for short--in honor of the think tank's founding chairman.

China Becoming R&D Center For Pharmaceutical Companies

Major drug manufacturers around the world are eyeing China as the answer to sophisticated laboratory services. And they see China as an emerging competitor to India...long the most-popular destination for outsourcing chemistry research and drug development.

Estimates to develop and market a new drug often run as high as $1.2 billion. Much of that cost goes for the slow process of sifting through thousands of compounds, in hopes of finding one that works against the disease being targeted.

In the U.S., the overall cost of a chemist to do drug development work is around $250,000 a year. In China, chemists with similar educational backgrounds may be hired for as little as $25,000 a year.

Top


From the desk of Bob Meyer...11/28/06

IMS Does It Again...Acquiring Steve Webster's Alliance Barter

International Monetary Systems (OTCBB:INLM), continues its "PacMan-like" focus of acquiring the nation's top trade exchanges. Their latest coup being Alliance Barter, one of the best operated exchanges in the country with an especially strong trade dollar. The Rochester NY-based Alliance serves clients in Buffalo and Syracuse, with a Canadian office in Toronto.

Don Mardak, CEO of IMS, says this merger will open the door for expansion into Canada, in addition to bringing a wealth of new products and services into the IMS Barter network.

Steve Webster, the founder and owner of Alliance Barter, is a long-time respected leader in the commercial barter industry and a member of the IRTA Barter Hall of Fame. He is the only person who has been president of both industry trade associations, IRTA and NATE.

This is Steve Webster's 29th year in the barter business. An excellent cover story on Alliance Barter was published in BarterNews, to view the article click on www.barternews.com/pdf/34-37Alliance.pdf.

For more information on IMS: www.internationalmonetary.com.

Silicon Valley Hospitals To Barter Patient Data

If you had some health challenges and had to be hospitalized several times you know the antiquated methods for acquiring a patient's health data, i.e. filling out numerous forms, over and over, with the same information, even when the patient's stay is in the same hospital.

The exchange of data in Silicon Valley is going to change that scenario. Three area hospitals (L. Packard Children's Hospital, El Camino Hospital in Mountain View; and Stanford Hospital/Clinics) along with the Smart Health initiative will undertake the creation of a unified electronic patient record that will be available to doctors and patients anywhere, anytime.

By exchanging such information, lower costs for local health care providers will be realized, and it will facilitate improving the quality of care for everyone.

IRTA Releases Universal Currency (UC) Report

Trading among IRTA-member trade exchanges, which use a trade credit called "Universal Currency," was brisk in October, according to a report from UC trade broker Jen Ashworth.

The top three traders for the month were Advantis International, IMS Barter, and Florida Barter. The newest member to the UC system is Greenapple Barter, located in Pittsburgh (PA).

Also noted was San Antonio-based Alamo Barter, which sold over $25,000 worth of toys, tools and showroom merchandise in October, and another $27,000 the first 15 days of November.

China's Tourism Sector Takes Off

China's National Tourism Administration says the industry is booming. A lot of it has to do with China's per-capita income, which surpassed $1,700 last year and has stimulated domestic tourism.

Economists have maintained that once incomes get past $1,000, people have money to spend on things besides necessities.

Meanwhile, an influx of foreign visitors is expected...in addition to the 2008 Olympic Games, Shanghai will hold the World Expo in 2010, while Guangzhou will host the 16th Asian Games that same year.

Economist Reveals How Home Values Affect Economy, GDP

Jan Hatzius, chief U.S. economist at Goldman Sachs in New York, says that modern mortgage finance has magnified the effect of home values on spending.

According to Hatzius, when people take cash out of their homes through home-equity loans and refinancings, which they were doing at an annualized rate of $558 billion in the first quarter of 2006, they tend to spend about 50-cents of every dollar outside home improvement.

If house prices merely stabilize, people's diminished ability to use their houses like automated-teller machines would subtract about 0.75 percentage point from annualized GDP growth in 2007.

Top


From the desk of Bob Meyer...11/21/06

IRTA Sends Formal Invitation To NATE For Unified 2007 Conference

The commercial barter industry has had two parallel trade associations for the past twenty-two years. Much has changed within the industry over the years. Not only have many of the players (exchange owners) changed,  but the agendas of decades ago are no longer applicable.

Given the aforementioned, along with some new challenges the industry's two associations are facing, the International Reciprocal Trade Association (IRTA) Board of Directors sent a formal proposal to the National Association of Trade Exchanges (NATE) Board of Directors on October 16, 2006, suggesting that the two organizations stage a unified annual conference.

IRTA's Executive Director recently sent the following statement to BarterNews:

"The IRTA felt that in the current environment of exchange consolidation in the U.S. and with fictitious associations claiming to represent the industry (i.e. NABA), it was critical to join forces.

"The strongest and most reputable exchanges have supported either IRTA or NATE over the last 25+ years. These are the exchanges that should continue to lead and leverage the strengths of each other.

"We understand that the NATE board will be considering this proposal at their next board meeting, and we hope to report soon that there will indeed be a joint conference for both owners and brokers in 2007."

IMS Pushing Ahead As 3rd Quarter Report Indicates

International Monetary Systems (OTCBB:INLM) has filed its third quarter report, for the period ending September 30, 2006. Noted in the report was its recent acquisition of National Trade Association, as well as other investments in the company's infrastructure and the continued commitment to internal growth.

Gross revenues increased to $1,687,573, compared to $1,674,125 for the third quarter of 2005. Total expenses were $1,803,266 versus $1,559,723. The company's year-to-date consolidated gross revenue for the nine-months ending September 30 totaled $5,240,400, compared to $4,413,101 for the same period in 2005, an increase of 19%.

Total expenses for the nine months ending September 30 were $5,241,215, compared to $4,091,555 for the same period last year, an increase of 28%.

Year-to-date loss for the first nine months of 2006 was $192,369, compared to a profit of $120,656 for 2005. Assets grew 96% during that period from $7,937,986 at the end of 2005, to $15,168,231 at the end of September 2006.

IMS Barter is a national trade exchange with more than 15,000 customers, representing 22,000 cardholders in 40 U.S. markets. For additional information on IMS: http://www.internationalmonetary.com

MBA Program Designed For Sustainable Business Studies

The Bainbridge Graduate Institute (BGI) in Seattle (WA), a privately run institution, is specifically designed to prepare students to build enterprises that are not only financially viable, but socially responsible and environmentally sustainable.

Founder Gifford Pinchott III, has helped launch over 700 businesses. He devotes one-third of his time to facilitating groups addressing environmental issues. For more information see http://www.bgiedu.org.

Cashless Vending To Take Off

Some $1.46 trillion in consumer spending, on transactions valued at less than $5, occurred last year. Now new cashless technology on vending machines, which will accept credit and debit cards (taking MasterCard's PayPass cards which are waved in front of a reader) is underway.

Coca-Cola and MasterCard International plan to equip 1,000 vending machines in the Philadelphia area. It is the biggest roll-out of its kind in the $40 billion U.S. vending industry.

Top


From the desk of Bob Meyer...11/14/06

Former Trade Exchange Owner Ray Bastarache Scores Again...Turning $50,000 Into $5.2 Million

Our cover story of BarterNews Issue #20, published in 1989, was about Ray Bastarache, the young, ambitious, and extremely focused 28-year-old founder of BarterNetwork Inc. (BNI).

My visit to Milford (CT), where I spent three days with Bastarache, was a most noteworthy one. For the first time, I became aware of how the second generation of exchange owners...the younger ones...were different than their predecessors.

It was Bastarache who first suggested that his generation would be the ones to truly tap the potential and riches of the commercial barter industry.

And it was a decade later that Bastarache did so, selling his company to the first of the dot-com venture capital firms--BarterTrust.com. (The sale was announced at the IRTA convention in Vancouver, Canada, and reported on in Issue #51.)

In that sale Bastarache, unlike his peers, again showed wisdom beyond his years, when he chose to take all cash, rather than the promise of a greater return in stock and options. (Which in retrospect was the right move, as BarterTrust ultimately filed bankruptcy.)

Never satisfied, he was involved in other business ventures while running BNI. Among his most profitable moves was the purchase of a large Milford downtown office building in 1992. He picked it up from the FDIC in a foreclosure sale, for $50,100.00.

I vividly remember our phone conversation after the deal was completed, when he ecstatically explained that he had negotiated to lease some of the spaces in the underground parking garage back to the city, which would cover most of the amortization of the building's loan he had just finalized. Quite an accomplishment for a young man in his thirties!

Bastarache quickly took action, making necessary improvements and turning the vacant shell into commercial offices. He then moved BNI into the building and leased out the remaining space. Much of the improvements were done on trade.

Last week Bastarache, who now lives in Massachusetts, sold the Harbor Towers Building at 1 New Haven Avenue for $5,225,000...100 times the amount he paid for it.

Active International Appoints Thomas Ruderman

Forty-eight-year-old Thomas W. Ruderman has been appointed chief human resources officer of Active International, a corporate barter and global marketing company.

Ruderman's experience is impressive. His 20 years of human resources experience include more than 15 years with General Electric Company and most recently as senior vice president of HR with Citigroup's credit card business. Prior to that he was vice president of HR for CIGNA Health Services.

Author/Speaker Uses & Promotes Barter (ITEX) On His Web Site

In his new book, "MORE Business Lessons For Entrepreneurs: Volume 2," Mark Csordos continues to deal with the mental and emotional aspects of starting and running a business. The book is a sequel to "Business Lessons For Entrepreneurs: 35 Things I Learned Before The Age Of Thirty."

In his most recent book, Csordos has a chapter on the use of barter. On his web site, www.markcsordos.com, he actively promotes his use of ITEX and sells his books and other programs on trade.

The Internet Pales In Comparison To The Innernet

What is the most complex network yet developed? If you guessed the world wide web, guess again.

The human brain, with its electrochemical matrix of over one hundred billion neurons, makes the internet look like a fancy spider's web. Within the brain, each neuron is linked to about 50,000 other neurons...making a total of one hundred trillion connections.

The Future Is Bright For Boomers Becoming Entrepreneurs

According to the Ewing Marion Kauffman Foundation, adults ages 55 to 64 have been the group most likely to start a new business in the past decade. Older entrepreneurs often tap their 401(k) or home equity for working capital, but, surprisingly, banks are interested in later-life entrepreneurs.

Why? They have networks and experience, and their kids are out of the house. Indeed, strong networks are what separate thriving retiree entrepreneurs from all the rest. In short, boomers who learned how to win friends and influence people have a bright future.

Some Manufacturing Leaving China For Less-Expensive Locations

The lowest-end production is starting to migrate away from China to areas that can offer even less-expensive conditions than China. Southeast Asian nations such as Malaysia and Indonesia, as well as Vietnam, have become the new hot spot for manufacturing.

In a way, China has become a victim of its own success. Japan, South Korea and Taiwan, a group that has collectively been a bigger investor in China than either the U.S. or the European Union, decreased total investment 6.5% in 2005...but in the first half of 2006 plunged 31%.

Home Builders Actions Showed Good Insight

As the housing market recedes, the recent reports on builders who used options when buying land, to reduce their exposure to the growing uncertainties of the real estate market, reflected their wisdom.

According to a report by Credit Suisse, builders have reduced their exposure by using more options on land, so they can walk away from deals. The report says that at the end of last year, 46% of such options contracts were utilized in 2005, 42% in 2004 and 12% in earlier years.

Top


From the desk of Bob Meyer...11/07/06

400,000 Europeans Prefer Barter

According to a study by the European Security Transport Association (ESTA), most Europeans (62%) feel paper money is still king and favor its use over that of electronic payments.

And 64% of those surveyed believed that moves to reduce the use of cash in society would damage commercial and national life in their country. Yet an estimated 400,000 Europeans said they preferred barter rather than using conventional payment methods.

Industry Veteran Fred Hammer Acquires Another ITEX Brokerage

For three decades Fred Hammer has been providing his services to clients through various exchanges. Originally an independent owner, he moved his company into the ITEX organization in 1986 and has been operating out of his Carmichael (CA) office.

Hammer's latest feat is the purchase of the other ITEX brokerage in Sacramento (Direct Business Exchange with over 700 clients) from Kristen Feuz. Hammer will operate both offices during November, with a focus on the annual Christmas Trade Show & Auction, and subsequently will consolidate operations into larger space at 3400 Cottage Way, Suite 101A, in Sacramento.

Bartercard Sells Australian Headquarters

Looking to repay all long term debt, Bartercard has sold, and will leaseback, its Australian headquarters. The sales price for the building was A$13,500,000. After paying off the long term debt, the balance will be used to finance further expansion in the UK and the UAE, and for working capital.

The company reported the building had a "net book value" of A$3,519,221, so the sale represents a "substantial" profit, and saves approximately A$1 million per year in capital loan repayments.

Baywatch Is Back On A Straight Barter Basis

The Baywatch TV show, all 109 hours, will be available to TV stations in the fall of 2007 under a 3-year term on a straight barter basis...advertising time in exchange for programming.

Litton Entertainment and Freemantle Media North America will be providing broadcasters the programming on both analog and digital tiers.

Regardless Of Your Beginnings, Huge Success Is Possible

Reinforcing the fact that one's attitude and tenacity can get you to the top, is the story of Shirene Lopez. A day after her 14th birthday she started working at a Fountain Valley (CA) Del Taco restaurant, mopping floors and cleaning tables.

Now the 42-year-old executive has been named president of the fast-food chain. Del Taco, founded in 1964, operates or franchises more than 470 restaurants in 13 states.

Bull Market Sees U.S. Ultra-Wealthy Households Increasing

The number of U.S. households valued at $10 million or higher more than doubled from 1995 to 2004, to 530,000, according to the Federal Reserve. Money managers exclaim, "$10 million isn't what it used to be!"

Much of the wealth is a result of a four-year bull market with stock indexes setting records. Of course not all stocks are created equal...case in point is the $100,000 a share price for billionaire Warren Buffett's Berkshire Hathaway.

That stock is up 5,555 times since May 10, 1965, the day Buffett took control of the former textile company and the stock was selling for $18 a share. (By contrast, the Dow Jones Industrials Average is up about 13 times since that date.)

Buffet, Berkshire's chairman, has long opposed a stock split on the theory that the high price tends to discourage buying by short-term traders.

Mexico Still Suffers From "The Bite"

Mexican officials have estimated that as much as 9% of Mexico's gross domestic product is siphoned off annually to corruption. In 2005 that would have amounted to $69 billion, or more than the nation spends on education and defense combined.

One out of every 5 businesses in Mexico admits to making "extra-official" payments to win public contracts, speed government paperwork or skirt regulations, according to a 2005 report by the Center for Economic Studies of the Private Sector in Mexico City.

The average Mexican's most frequent brush with the system is la mordida, or "the bite." Those are small bribes...tips and other extracurricular handouts that public servants and others squeeze out of the citizenry to perform routine functions.

Pre-School Embraces ‘Red Paper Clip' Barter Strategy

Moreton Hall Pre-school in Bury St. Edmunds, England, is following the barter idea of the 26-year-old Canadian Kyle MacDonald of Montreal which was introduced to the world when he started with One Red Paper Clip and over a series of 15 barter moves acquired a house.

The staff, children, and parents aim to follow a similar strategy to help raise £70,000 to pay off their school debt. The barter idea was the brainchild of the pre-school committee fund-raiser Liz Fordham. Within 3 days the paper clip had become champagne.

Top


From the desk of Bob Meyer...10/31/06

Dale & Vardabash To Address Global Barter Conference In Singapore

Lois Dale, managing director of IMS (OTCBB:INLM), will speak at the first Asian barter conference being held October 31 and November 1, as part of the Global Entrepolis Show in Singapore.

Krista Vardabash, executive director of the International Reciprocal Trade Association (IRTA), will also address the conference. The Global Entrepolis program is expected to attract more than 15,000 attendees. As a special feature of the event, Lois Dale was interviewed by CNBC on October 30.

Don Mardak, CEO of IMS, declared, "It is very exciting to see the global reach of barter, as the Asian leaders of the Global Entrepolis Show have decided to make this dynamic business tool an integral part of their program. I am certain that Lois and Krista will do a wonderful job representing the North American barter industry."

Cargill Enters Renewable Natural-Gas Industry To Earn Fuel-Trading Warrants

The Minneapolis farm-commodity processing giant's move into the fledging renewable natural-gas industry is expected to give a big boost to the business of turning livestock manure into methane gas.

Cargill's move in this direction will consist of recruiting farmers whose livestock operations are big enough to generate a reliable supply of manure for conversion into methane, which is then sold to natural-gas utilities.

Cargill isn't investing in any specific company that provides the conversion, but will earn fuel trading warrants for business it brings to the companies that operate a "digester" (a facility that can cost $1 million to build and uses micro-organisms to convert manure).

BixXchange Is Flying High

BizXchange, a Seattle-based trade exchange, was recognized by the Puget Sound Business Journal as one of Washington's "100 Fastest Growing Private Companies for 2006." Businesses are given the award, and ranked, based on net operating revenue growth for the previous three years.

BizXchange was formed in January 2002, and has since facilitated nearly $100 million in barter transactions among its over 1,100 members. They have offices in Seattle and Oakland (CA).

Barter Consultants' Busman Appeared On NBC Nightly News

Lee Anne Busman, exchange co-owner of Barter Consultants in Atlanta, happily reported that she was interviewed by NBC Nightly News. The segment was aired on Saturday, October 28.

Wilkerson Owns Trade Exchange & Two Professional Basketball Teams

Charles Wilkerson, who tried to buy Barter Systems Inc. in the mid ‘80s (with the intent of moving the company to Denver from its Memphis headquarters), is the owner of Barter Americas trade exchange.

He's also the owner of two American Basketball Association (ABA) teams. The ABA is like a "minor-league" system for the National Basketball Association (NBA).

Wilkerson owns the Arkansas Aeros and the Arkansas River Catz. Reportedly, at a recent ABA owners meeting, Wilkerson had the owners on the edge of their seats with his many stories about barter.

Frequent-Flyer Miles For Charity

Lufthansa frequent-flyer members can donate miles through the Miles and More program to HelpAlliance, Living Lakes, and SOS Children's Villages. Donations ranging from 10,000 to 40,000 miles will enable schooling for Indian children, help conserve wetlands in Brazil and support Asian orphans' lodging, medical care and schooling.

IRTA's Universal Currency Offers 45-Page Holiday Publication

Jen Ashworth, UC's enthusiastic trade broker, recently provided all UC member trade exchanges with a comprehensive, 4-color, PDF file full of a wide array of products and services available to them for their holiday business inventory.

For additional information contact: jen@irta.com.

Top


From the desk of Bob Meyer...10/24/06

Idea + $27 = Nobel Peace Prize!

In 1976 Muhammad Yunus, when taking a trip to the village of Jobra in Bangladesh during the devastating famine of that year, met a woman who was struggling to make ends meet as a weaver of bamboo stools.

She needed to borrow money to buy materials; but having no assets the conventional banks shunned her. Her only option was to turn to local money-lenders whose extortionate rates of interest consumed nearly all her profits.

Yunus, then a professor of rural economics at Chittagong University, reached into his own pocket and gave the woman and several of her neighbors loans totaling $27. When they surprised him and paid back the loans, he started traveling from village to village offering more tiny loans. And in the process, cutting out the greedy middlemen.

That led to his founding of the Grameen Bank (Grameen means "village" in Bengali), and the rest is history. The bank has now loaned $5.72 billion to 6.6 million Bangladeshi, 97% of whom were women, and today provides services in more than 70,000 villages.

This year Muhammad Yunus received the Nobel Peace Prize, a long-overdue stamp of international recognition for his accomplishment of the seemingly impossible. He enabled millions of people to become productive, self-reliant citizens by extending them a little credit, so they could fight their way out of poverty and climb the economic ladder with dignity.

Yunus popularized the term "microfinance," and there are now several web sites that enable individuals to give or lend small amounts of money to others who post their funding needs. One is www.donorschoose.org, where public-school teachers can post wish-lists for supplies and resources their budgets won't cover; later kids often send pictures and thank-you notes to the donors.

Globalgiving.com works similarly but funds small charitable projects around the world, and kiva.org connects users with loan-seeking entrepreneurs outside the United States. At prosper.com, those with money to lend can view requests from U.S. residents with Social Security numbers. (The sites all have layers of safeguards, such as verifying hardship tales and checking terrorist databases.)

Barter Funded $50 Million In Scientific Research

In Canada, the Federal Department of Fisheries and Oceans (DFO) had been paying for scientific research with fish. The department offered fisherman extra quotas of snow crab and other species, in exchange for scientific surveys and stock assessments.

But then a New Brunswick crabber went to court, arguing that the fisheries minister had no right to take quota from his fleet to pay for scientific research. A federal court of appeal backed him up, ruling that that the scheme was illegal because the minister was paying with assets that didn't belong to him...in effect misappropriating resources.

The DFO is now conducting a review to see how much of its science will be affected ,and how many programs it may have to pay for out of its budget. It was estimated that about $50 million worth of scientific research was acquired through the barter project.

IMS Kicks Off Its Holiday Expos With Major Success In Chicago

International Monetary Systems (OTCBB:INLM) used the newly acquired Illinois Trade Association's Annual Trade & Holiday Gift Show at Harper College in Palatine as a launch pad for the company's upcoming series of eleven Barter Expos.

All-time interest along with a record attendance carried the day at the October 21 holiday show in Palatine. IMS expects large client turnouts will also take place in the scheduled cities of Milwaukee (WI), Modesto (CA), Columbus (OH), Reno (NV), San Jose (CA), Hartford (CT), Denver (CO), Chattanooga (TN), Santa Rosa (CA), and Las Vegas (NV).

For further details, contact the office nearest you for dates and directions.

Suze Orman Advises Barter As Means For Business Women To Find Greater Wealth

Famed financial advisor Suze Orman, writing in the November issue of PINK, says business women should learn more about barter, because it's one of the twelve ways women can find financial liberation. Orman suggested it's an excellent means for obtaining travel, dining, giving gifts and conducting business without using cash.

TTi CORRECTION

In last week's issue we reported that TeleTrade International (www.eValues.net) was the only barter site certified to be 99% hacker safe...due to an independent, daily certification program. That report was incorrect, as we later learned. Other online barter sites that have third party certified verification include: http://www.worldtradebanc.com, http://www.bartercenterinternational.com and http://www.dobarter.com.

China's Reserves Top $1 Trillion

China's holdings of foreign currencies and securities now top $1 trillion...a sum greater than the annual economic output of all but nine countries. Roughly 70% of the Chinese reserves are believed to be in U.S. dollar assets and 20% in euros. Another 10% are in other currencies, including the Japanese yen and Korean won, according to economist Brad Setser at Roubini Global Economics. 

Another indication of the worldwide respect China is getting is the recent initial public offering of Industrial & Commercial bank of China, Ltd. the world's biggest IPO which starts trading October 27. It attracted $350 billion of demand from global investors and $80 billion from domestic investors for the $21.9 billion deal! (China Merchants Bank Ltd. had $100 billion of demand for its $2.4 billion deal last month.)

Top


From the desk of Bob Meyer...10/17/06

Barter Plays Role In Google's Goal To Ultimately Broker Ads Everywhere!

Boil it all down and the $1.65 billion Google acquisition of internet video-sharing site YouTube.com is this: "I'll trade you part of my company for your company."

Google's market cap of $132 billion means that the transaction represents 1.3% of Google's value, and they obtain the Internet's 14th most visited web site. When coupled with Google's status of #3 most visited site, it will yield even more traffic, ad opportunities and revenue.

(Because YouTube shows more than 100 million video clips per day, it will significantly broaden Google's ad-brokering activities beyond simple text ads to larger amounts of video advertising online.)

YouTube, a 19-month-old San Bruno (CA) firm, not only hits "pay dirt," but will have the financial backing of Google to continue developing features and sharpening its focus on the future.

Google pulled off the all-stock transaction, (using what they had, to get what they wanted), so as to make it tax-free for YouTube shareholders. Additionally, the barter acquisition was cheaper for Google than had they paid cash from their roughly $10 billion hoard.

Moreover, consider that from the time the deal was rumored on the street until it became "real," Google's market value went up over $3 billion. So the endeavor, from one perspective, was "paid for" by Wall Street!

It's one more step in Google's ultimate aim: To not only broker ads on the Internet but also in radio, print media and television.

Editor's note: Another huge winner in this bartered agreement is Sequoia Capital. They put up $11.5 million for a 30% stake in YouTube. They now hold $495 million in Google stock...a return of more than 4,200% in one year!

IMS Record Enrollment Announced

International Monetary Systems (OTCBB:INLM) has reported 443 new clients were enrolled in the IMS Barter network in their third quarter, far exceeding any previous quarterly total. With the recent procurement of the Illinois Trade Association's sales staff, the company's fourth quarter numbers are anticipated to be even greater.

What Are The Five Most Dangerous Words In Business?

According to Warren Buffett, the 76-year-old chairman of Berkshire Hathaway, the five most dangerous words are, "Everybody else is doing it!" He contends that to avoid business scandals one must resist temptation, despite peer pressure or even industry practice. Buffett's mantra might be summed up as: Don't follow the herd.

Technology's Effect On Securities Trading

The 214-year-old New York Stock Exchange (NYSE) is about to undergo a dramatic change with the introduction of electronic-trading. When the changes are complete, the target date is December, brokerages acting on investors' behalf will be able to buy and sell shares of NYSE-listed stocks electronically.

Today the typical order sent to the NYSE takes an average of nine seconds for execution, under the new system it will take less than a second to execute. And the bundle size for buying and selling shares will increase from the present 1,099, to 1,000,000.

So to illustrate the difference in trading speed, it would be like getting a pizza delivered...instead of the usual 30 minutes or so, you'd have it in three minutes!

Top


From the desk of Bob Meyer...10/10/06

The successes of larger barter companies are evident in the following stories... 

ITEX Prepays Entire BXI Acquisition Debt

Nearly 3 years prior to maturity, ITEX has wiped the incurred debt of $2,300,000 from their books. CEO Steven White was pleased to make the announcement that the last payment was voluntarily made on October 4, 2006.

The debt was retired with funds generated from cash flow which validates the success of the BXI acquisition. According to White, the principal discount and interest savings from early payment on the loans saved ITEX approximately $240,000 over the life of the promissory notes and term loan. ITEX presently has no long-term debt.

White added, "Through July of 2008, we will continue to pay BXI shareholders a 5% earn out on revenue over $3,000,000 per quarter, not to exceed $37,500 per quarter."

For more information on ITEX Corporation, the largest trade exchange in the U.S. with 22,000 member businesses, visit: www.itex.com.

BBX Net Profits Soar 323%!

Business Barter Exchange (BBX) of New South Wales, Australia, reported a net profit after tax of $1.08 million, an increase of $825,000 or 323% over the previous year. The exponential growth in trading activity included a significant increase in the number of real estate transactions within the exchange's membership, which totals 4,535.

Gross revenue was $10.06 million, up over 21% of last year's figures. Trading volume was $146 million, a 61% increase compared to last year's trading volume of $90 million.

IMS Picks Up Another $2.1 Million In Funding

International Monetary Systems (OTCBB:INLM) announced it has received another $2.1 million in debt and convertible-debt financing from a private investor. (IMS recently acquired Jack Schacht's Illinois Trade Association and National Trade Association. IMS now has 15,000 members in 39 U.S. locations.

Additional funding details (Form 8-K) can be accessed at: http://www.sec.gov.

Hedge Fund Business A Tough Grind

Last week we noted that 125 hedge funds control 80% of the $1.23 trillion of the industry's assets. Since January 2005, more than 1,000 funds have shut down while 2,600 new hedge funds have been launched, according to Hedge Fund Research Inc. of Chicago.

Top


From the desk of Bob Meyer...10/3/06

The Barter Company Celebrates 10th Anniversary

The Barter Company trade exchange is celebrating its 10th year in business with the announcement of an expansion into Destin, Florida.

TBC founder Ric Zampatti, in addition to providing exchange services to 2,000 businesses in the Atlanta area, also has an established billboard company. TBC is hosting its annual golf outing on October 16 at the Brookfield Country Club in Roswell, and a holiday trade show on November 4 at the Cobb Galleria Centre.

For more information see:www.thebartercompany.com.

$9 Trillion In Unregistered Land

The second annual Clinton Global Initiative held in NYC last week saw heads of state, celebrities and the super-rich, gathering to raise funds to help solve the world's problems.

The buzz at this year's meeting centered on a topic heretofore all but ignored...registering poor people's property so they could borrow against it to build businesses, etc. Many citizens of developing countries (estimated to be 85%) don't formally have title to their land, which is a key source of urban poverty.

Unregistered land in developing countries has an estimated total of over $9 trillion. It's wealth locked-up, which keeps people in poverty instead of being an asset that can lift them up.

Saying that "land ownership is the cornerstone of economic stability in any region," Craig DeRoy, the president of First American Corp., a seller of title-insurance and credit information, committed $1 million in cash and in-kind services to develop a "template" to give the poor in developing countries a way to establish land titles.

Hedge Fund Industry Controlled By A Few Firms

There are nearly 7,000 hedge funds, but 80% of the $1.2 trillion in the industry's assets are controlled by 125 firms, according to Hedge Fund Research Inc. of Chicago.

ITEX Brokers Association Considered Vital By Management

The ITEX Corp. (OTCBB:ITEX) with 22,000 members is the largest trade exchange in the United States. Just a week after the completion of the International Reciprocal Trade Association's annual convention at the TradeWinds Resort in St. Petersburg (FL), the IBA (ITEX Brokers Association) hosted the first of three annual "Regional Conferences" at the same venue.

The three-day event was attended by ITEX licensees and franchisees, as well as four representatives from the corporate office. Continuous meetings and workshops were conducted to bring new information and programs to the attention of the brokers, and to promote a spirit of mutual cooperation.

Chairman and CEO Steven White believes these conferences are vital for keeping everyone in the ITEX organization well-informed and connected.

The next "Regional Conference" will be held in Salt Lake City, and the final event will take place in Dallas.

For more information: www.itex.com.

World Economic Forum Downgrades United States

Serial budget deficits in the U.S. make the country's economy less competitive, according to a study by the World Economic Forum, an institute in Switzerland.

A rise in public debt means an increasing portion of government spending will go toward debt service, and less money is available for infrastructure spending (schools and other investments that could boost productivity). Heavy goverment borrowing tends to drive up the cost of money, i.e. businesses borrowing costs.

The research institute downgraded the U.S. because of other long-term potential costs such as health care and pensions. The U.S., which fell to sixth place, has been replaced at the top by Switzerland. Finland remains second, Sweden rose to third. India ranks 43rd out of the 125 countries in the survey, China ranks 54th, Russia 62nd and Brazil 66th.

New Online Business Search For Nighthawks & Travelers Alike

A new web site, http://www.ilate.com, is the only web site of its kind in which users can search local businesses that are open much later or much earlier than their competitors. Businesses are searchable by category, and by their days and hours of operation.

The web site lists businesses that provide the "necessities" of life, such as pharmacies, supermarkets, walk-in clinics, libraries, internet cafés, grocery stores, restaurants, pet shops, book stores, computer shops, hardware stores, department stores, car rentals and post offices.

BizXchange Honored

On September 21 the East Bay Business Times put on a banquet honoring BizXchange in Oakland (CA) as one of the "FAST 50," the 50 fastest growing privately held companies in the East Bay. (BizXchange was #25.)

And for the second year in a row, BizXchange in Seattle was selected as one of Puget Sound Business Journal's 100 Fastest-Growing Private Companies in Washington State.

For more information see: www.bizx.com.

"Dr. Phil" Diet-Pill Maker Provides Barter Option To Settle Suit

Buyers of diet products endorsed by TV psychologist Dr. Phil McGraw will be eligible for some cash refunds in addition to an exchange option (to receive Nurtrilite multivitamins), under terms of a $10.5-million lawsuit settlement alleging that the products didn't work as advertised.

The Shape Up products, which are no longer distributed or sold, included shakes, bars and multi-vitamins, made by CSA Nutraceuticals of Irving, Texas.

Internet Advertising Growth Explosive

Internet advertising spending in the U.S. jumped 37% in the first half of this year, compared with the same six months of 2005. Advertisers spent $7.9 billion to push products and services, the Internet Advertising Bureau reported.

Search engines account for the largest ad format on the Web, at about 40% of total revenue. The top two U.S. search service providers are Google and Yahoo.

Top


From the desk of Bob Meyer...09/26/06

Kyoto Treaty Suggests Barter As Way To Stem Pollution

The Kyoto Treaty came into being in February 2005. It is seen as a way for many of the world's nations to stem the increase of CO2 emissions, protect the world's ecosystems, and upgrade energy efficiency in a variety of areas.

The key to the Treaty is based on tradable permits, issued globally, to emit a total fixed amount of CO2. A country cannot emit more CO2 than it has permits for, or it faces a stiff penalty. Permits can be bought and sold or traded.

Business Barter Exchange (BBX) Announces Record Membership & Net Profits

Trade volume in BBX trade dollar currency passed $100 million for the first time in the company's history, totaling $146 million for the year and up 61% over last year.

The company announced a record net profit after tax of $639,819 for the year ended June 2006...an increase of $385,090 and up 151% over the previous year.

Active membership numbers passed 4,500 for the first time as well, reaching 4,535 or up 5.5%.

Whitmer Suggests Another Focus

Scott Whitmer is the founder of Florida Barter, one of the larger independent trade exchanges, located in Orlando (FL). A proven veteran in the industry, he runs a very successful exchange. He's also a past president of IRTA, and has held many other board positions. So his recent musing at the IRTA convention are noteworthy. 

According to Whitmer, our industry focuses almost exclusively on the owner of a business that is a member of one's exchange. He suggests if you'd like to see more trading activity from this member, it would be a good idea to expand your vision and consider the owner's spouse and kids.

Family members often play a major role in the spending of the trade dollars. Get to know them, learn more about their tastes and desires, and you will get more business from this member, Whitmer asserts.

For more information on what Florida Barter has to offer see: www.FloridaBarter.com.

Flippers Having Trouble

HomeSmartReports.com, a San Juan Capistrano (CA) company, tracks housing data and home flipping activity in 147 metropolitan areas.

The firm considers a house flipped if it is sold within nine months of being purchased. Tracking those transactions, they found that 17.1% of all homes flipped in the second quarter were money losers for the sellers, losing a median of $38,975.

Top


From the desk of Bob Meyer...09/19/06

Commercial Barter Industry Looks To Emulate Visa Card Model

The seed has been planted and the commercial barter industry, struggling to find its place in the world of commerce, will undergo a transformation in the coming years that promises to catapult it into an incredibly important position in the business world.

In 1968, a 38-year-old assistant banker in Seattle named Dee Hock revolutionized the way the banking community interacted with the Visa credit card model, where banks would cooperate with one another to process Visa cards anywhere at any time.

Today the Visa International network is the largest business enterprise globally, with annual sales volume of $4 trillion. There are 22,000 financial institutions operating in over 200 countries, serving one billion customers.

The world's gross domestic product now approximates $49 trillion. Therefore, a conservative figure of the unused time and unsold products would number in the trillions.

By emulating the Visa model, the commercial barter industry can create a new enterprise whereby millions of business owners could monetize their unsold time/products. The incredible wealth created could provide the needed capitalization to build business communities around the globe, provide needed jobs and other opportunities, as well as moving millions out of poverty.

See the first article following this column for more information on how this historic possibility for the commercial barter industry has come about…

Martin Pushes Client Enrollments To New Highs

Barbara Martin, national sales manager for International Monetary Systems (OTCBB:INLM), is leading the company's sales efforts to new heights. The company's outside sales force signed up 118 new clients in July, second at that time to the 121 that IMS Barter enrolled in January.

The August number for new member enrollments totaled 190, shattering all previous records and validating the company's commitment to organic growth through new client sales.

Marketing Professor Says Direct Trading Is Huge

According to Dr. Rich Rexeisen, a marketing professor at the University of St. Thomas Business School in Minneapolis, bartering is a bonanza for consumers. Bartering locally through internet contacts is exciting, he asserted, because it makes people begin to think about "what really does value mean."

Online Retailer Offers Barter Link

A wide selection of newborn infant and toddler baby clothes can be found at TheRetroBaby.com. They have added a link that says, "Wanna Barter, Baby?" By clicking the link, one can review what items and services are eligible for trade.

Can You Guess The Largest U.S. Seller Of Single-Family Homes?

It's the Housing and Urban Development (HUD) Agency. HUD, along with the U.S. Department of Agriculture and the Veterans Administration, take possession of foreclosed homes and return them to the market. Properties are sold "as is" and at or below appraised value.

The agencies, especially HUD, make them easy to buy with generous loan terms and low up-front costs. HUD sold 57,930 homes during the last 12 months with an average selling price of about $79,000.

Top


From the desk of Bob Meyer...09/12/06

UC Celebrates Tenth Anniversary

A decade ago, at IRTA's 17th Annual Convention, held at the Mont Gabriel Resort near Montreal, Canada, the membership unanimously voted to adopt a proposed Universal Currency (UC) to enable inter-exchange trading.

The objective was for barter company members of the International Reciprocal Trade Association to look to each other as cooperative partners in servicing their clients...ultimately providing a wider array of goods and services.

The excitement and anticipation for the UC effort at that time was summed up by Toronto resident Peter Tucker, who was born in Barbados and educated in London: "This is the most unusual group of entrepreneurs in the world. I've been in international management and in various other organizations, yet this group is the absolute best in the sharing of information."

Jennifer Ashworth, the top-notch UC broker, reports some exciting happenings are taking place at IRTA headquarters in Rochester (NY). Jen says she will be sharing details with the barter world in the near future.

Russia's Gazprom Barter Deal Part Of Strategy To Enter East Asia Markets And Eventually USA

In the real world barter deals of significant size are conducted and often reported as business transactions, overlooking the barter component.

One such example is Gazprom, Russia's monopoly state-controlled gas giant, which doesn't have its own liquefied natural gas (LNG) capacities yet. As a result, they enter into agreements with companies having the necessary technology, wherein they exchange pipeline gas for the corresponding amount of LNG, minus liquefying and transportation costs.

The bartered LNG is then supplied to consumers, with the goal of securing a foothold in that market...even if it involves certain losses. (Their first endeavor was with Mitsubishi Corp., in their attempt to move into the Asian-Pacific LNG market.)

BizXchange Awarded Seattle Mayor's Small-Business Award

Chris Haddawy, Sr. VP of Business Development, announced that BizXchange of Seattle has been chosen as one of ten small businesses in this entrepreneurial city to receive special recognition for their accomplishments.

The Mayor's Small-Business Award looks at a company's marketing, management, employee relations as well as community involvement, before selecting them as one of the outstanding ten small businesses in Seattle (WA).

For information on BizXchange: http://www.bizX.com.

Advertising Veteran Porcarelli Joins Active International

Jim Porcarelli has joined Active International as executive vice president of corporate development. He will be a member of the newly-formed Corporate Development Department, which is responsible for implementing some of the larger strategic initiatives across all facets of Active's business.

He has nearly 25 years of advertising experience: With MediaCom, he served as chief marketing officer and director of client services. He also created an industry-first marketing strategy for Kraft Foods, and he led an international team at the former DMB&B.

Jim Packer Will Handle Barter Sales For MGM

Metro-Goldwyn-Mayer is taking back the sales function of its 4,000-title movie library and 10,000 television titles from Sony Pictures Television. The company has decided the best way to maximize its intellectual-property rights is to do it themselves.

Jim Packer, a veteran of Disney's Buena Vista domestic-television-distribution unit, was named president of the restructured distribution group and will be responsible for U.S. barter sales and syndication.

Top


From the desk of Bob Meyer...09/05/06

Hewlett-Packard Creates "Tycoon Currency" To Stretch Its IT Resources

One of the most respected high-tech companies in the world has created their own currency to stretch company assets for innovation. The new Hewlett-Packard Tycoon currency will be allocated and based on actual use and need.

It's a virtualized, market-based system for managing and delegating computer resources. Tycoon pulls a company's IT (information technology) services into an abstract utility layer, and users can barter or bid for it within their own companies or among others.

It works like this: Within a company, employees are given a certain number of tokens per year to spend on computing resources. The more urgent a user deems the need, the more tokens he can bid for use of the equipment. Users who provide resources can, in turn, spend their earnings (tokens) for using resources later on.

Hewlett-Packard has been testing Tycoon since November 2004 at its Singapore offices and in several European locations. This summer a pilot project took place with a Scandinavian company. Engineers will use Tycoon to bid on access to high-powered computers needed for simulations.

H-P says marketing a commercial Tycoon won't happen anytime soon because the technology represents a major shift in business processes. But in the future it's expected to provide businesses that otherwise couldn't afford high-powered computing, to be able to access leading-edge technology through Tycoon.

Joe Uva Featured Keynote Speaker In Chicago

Joe Uva, president & CEO of OMD Worldwide and president of Omnicom Media, will be the keynote speaker at the Broadcast Advertising Club of Chicago and the Chicago Interactive Marketing Association's day-long program on September 21. The event will focus on the convergence of the broadcast and interactive platforms.

As president of Turner Entertainment Group Sales & Marketing, Uva developed integrated marketing programs and oversaw its barter and trade operations.

For more information on the event: http://www.chicagoima.org.

Travel Web-sites Growth Soaring

The online travel boom continues as the number of travel web sites has grown by 25% in the past twelve months. Over half of those global sites are located in the United States.

Here are the top five countries that host travel web sites, according to research by Internet Security Systems:

1. USA            (60.4%)
2. Germany        (12.9%)
3. Great Britain   (5.0%)
4. Austria         (4.2%)
5. Canada          (2.9%)
6. Other          (14.5%)

California, Twenty Other States Have Laws On Scrip Expiration

Regarding the inquiry on expiration dates for various types of scrip, electronic gift card and paper gift certificates, the state of California banned expiration dates for said items back in January, 1997. (See Tuesday Report dated March 14, 2000.)

Six years later, in 2003, new consumer protections were added in AB 2473. That bill required any company issuing a gift certificate to honor that certificate even if the firm filed for bankruptcy.

California passed another law specifically prohibiting expiration dates or service fees on gift cards sold after January 1, 2004. The only exception were cards that hadn't been used in more than 2 years and with a value of less than five dollars.

(For further information on such matters one should consult with an attorney for the most recent and specific details on such expirations in your state.)

Top


From the desk of Bob Meyer...08/29/06

Travelocity and Points.com To Offer Program For Purchasing Travel Services Using Frequent Flyer Miles

Thanks to Peter Tucker, CEO of CTEX.com, for sending us the disclosure from Travelocity. We did not publish his missive herein, because it was a much longer story than our parameters for the Tuesday Report. (We will be sending out a separate mailing, so you can read his entire comments, to our e-mail list shortly.)

Most noteworthy about this announcement is the fact that millions of people (from a myriad loyalty programs worldwide) will now have a way to directly spend their frequent flyer miles on travel services.

The new program "Book with Points," will allow loyalty program members access to Travelocity's online booking engine. They will use points or miles to book and purchase the travel reward, exactly as if they were purchasing their travel with cash, rather than loyalty points and miles.

Book with Points will be available both on the Points.com consumer portal and as a stand-alone, branded product for individual loyalty program operators. It's expected to be operational in the fourth quarter of 2006.

Rob MacLean, Points International's CEO, summed it up nicely: "While millions of flights, hotel nights and other rewards are provided every year, there continues to be demand for even more access and availability. Our agreement with Travelocity is uniquely positioned to help loyalty programs finally follow through on the ‘any award, any time' travel promise, and to do so using our two companies' world-leading technologies."

This effort creates a huge multi-billion-dollar open trade exchange system, further reinforcing the promise and staggering possibilities when melding many diverse partners into one giant network.

Incredible Success Story

The first company in India to be listed on the Nasdaq stock exchange, back in 1999, was Infosys. The company, with 58,000 employees today, was launched with $250 in 1981 by six young guys from India.

Chairman N.R. Narayana Murthy, 60, stepped down last week after 25 years at the helm of the company he co-founded and helped grow. Annual revenues today are more than $2 billion, and the market capitalization is $21 billion.

Infosys' biggest challenge came in 1995 when Murthy and his team decided they couldn't accept the tough conditions demanded by General Electric. They walked away from the U.S. firm's business at a time when it made up 25% of Infosys's revenue and 8% of its profit.

BBX Reports Barter Company "First"

Business Barter Exchange (BBX) of Hornsby, NSW, Australia, has listed its second company on a stock exchange...the BBX Property Investment Fund. The Newcastle Stock Exchange listing was initiated August 25, 2006, with a funding of over $4 million in both cash and BBX trade dollars. BBX hopes to transfer the fund to the Australian Stock Exchange later this year for a full main-board listing.

Top


From the desk of Bob Meyer..08/22/06

Report Confirms New Media Order Emerging

PQ Media of Stamford (CT) predicts that marketers will remain enamored with placing products wherever they can...in movies, TV and radio, on web sites, in video games and lyrics, newspaper and magazine articles, and even in the plots of novels.

Product placement is an example of a phenomenon known as "ad creep," loosely defined as popular culture becoming increasingly commercialized.

Spending on paid placements worldwide will reach $3.1 billion in 2006. In 2005 it was $2.2 billion, and by 2010 product placements are expected to reach $7.6 billion annually.

There are two types of product placements: (a) paid ones, where marketers spend money to weave their wares into the plots, scripts and content of entertainment, and (b) bartered placements which occur when a company's product is provided in exchange for being mentioned or used.

Former SEC Chairman, Wharton Professor Bartering Services

WisdomTree Investments of New York is among a new crop of money-management firms specializing in exchange traded funds. (WisdomTree has $400 million under management.) Recently the company added high-profile supporter, former SEC chairman Arthur Levitt as a senior adviser, providing him a stake in the company in exchange for his role...which is yet to be formally defined.

The company's marketing materials also feature the endorsement of Jeremy Siegel, the well-known professor from Wharton School of the University of Pennsylvania. He received a stake in the firm, as well, for his backing.

TradeAmericanCard Gave Early Assist To Money Mailer

Decades ago when Garden Grove-based marketing company Money Mailer was just getting started, they regularly used the services of TradeAmericanCard. The Orange County-based trade exchange, through their numerous members, provided them with a variety business needs useful to a startup company.

Today, the firm is owned by Atlanta-based private equity firm Roark Capital, and they're continuing to build a powerful marketing organization with the recent acquisition of DX Marketing, a provider of market research, customer prospecting, data mapping and digital printing services.

Money Mailer mails 175 million envelopes to 21 million households on behalf of more than 30,000 local, regional, and national advertisers. Valpak Direct Marketing Systems, a unit of Atlanta-based Cox Enterprises, is the other national mailer which distributes coupons to homes.

For more information one of the nation's oldest (35-years old) trade exchanges see: http://www.tradeamericancard.com.

Top


From the desk of Bob Meyer...08/15/2006

If You Can't Get Blood Out Of A Turnip, Take The Turnips!

Finland's President Tarja Halonen has approved a draft agreement with Russia to convert $30 million loan into barter. Russia will provide $30 million worth of goods and services to pay off its Soviet-era debt over the next two years.

Once the agreement is signed, at a ceremony in Moscow this week, the sides will then draw up a list of merchandise to be supplied. Finland is particularly interested in receiving research and training equipment from Russia.

This will be the fourth, and final, debt conversion agreement between Russia and Finland, as Russian authorities have pledged to seek an early settlement of Soviet-era debts.

Entrepreneur Software Whiz Embraces Barter To Fund Start-up

Andy Astor, the co-founder of EnterpriseDB (EDB), having little capital for his startup software company, used equity incentives and innovative management techniques to get his company off the ground.

The firm has made some impressive inroads into a market controlled by Oracle, IBM and Microsoft, by using an open source solution as its platform (PostgreSQL). From its start, the two key goals for EDB were to focus on improving its platform and build a world-class customer support system.

Recently Sony dumped Oracle and is using EDB for its online gaming properties, such as Everquest, which are data intensive. Astor's company showed it has the capability to handle huge amounts of interactions in real time, at all hours...plus Sony estimates its cost savings are 80%!

EnterpriseDB envisions an enormous future as they are looking at an enterprise database market of about $13 billion. While he used a form of barter to get off the ground, Astor recently snagged $16.5 million in venture capital funding. Astor said he was not looking for money, "but the investors came to us, and we got a terrific valuation."

With the capital, the firm is in the process of building-out an enterprise sales organization. Selling complex software is certainly a high-touch process, requiring a strong experienced team. Needless to say their future looks bright.

IMS Barter Has Option For Lois Dale's New York Commerce Group

Don Mardak, CEO of IMS Barter (OTCBB:INLM), announced that his company has acquired an option to purchase the assets of New York Commerce Group, NYCG. During the option period the companies will operate under a revenue-sharing arrangement.

NYCG, formerly known as Barter Advantage, was founded by Lois Dale. Known as the "First Lady of Barter," she is one of the industry's respected leaders and the current president of the International Reciprocal Trade Association (IRTA).

A 700 client strong organization, NYCG has key relationships with numerous New York-based media companies, ticket brokers and corporate barter firms, which will provide IMS Barter members a host of new and exciting travel destinations.

For more information see http://www.internationalmonetary.com.

Kudo's For Michael Mercier's Metro Trade Association

The Detroit News recently had an extensive piece about some of Metro Trade Association's satisfied exchange members:

Restaurant owner Gary Sussman noted that he's received more than $500,000 in cleaning services, appliances, and renovation work on his Sweet Lorraine's Cafe and Bar in Southfield (MI) over the 15 years he's been a member of MTA.

Cloverleaf Pizza's general manager Carol Corrie says it was a line of credit from MTA that enabled them to come back after a five-alarm fire destroyed their establishment. The Eastpointe eatery closed for a year, because it was not totally covered by insurance.

Al Buffenn, owner of Top Value Car and Truck Service in Southfield, joined the exchange three years ago and has decreased his business cash outlays by $20,000 through barter purchases.

In the article, Charles Owens, state director of the National Federation of Independent Business, was quoted as saying, "The pro's of bartering are obvious, I can't see any negative in it. I think it's rather clever, it sounds like another entrepreneurial approach to solving a problem."

"What most people don't understand, is it provides the same as cash flow," pointed out Mike Mercier, president and founder of the Troy-based Metro Trade Association. Always a viable way of doing business, bartering is especially helpful when companies are cutting back and scrimping to get by.

For more information go to http://www.metrotrading.com.

The Shunkwiler's Barter Authority Web Site Unique

In Norfolk (VA), the husband and wife team -- Vic and Terry Shunkwiler -- have put together an informative and encompassing web site for their trade exchange, The Barter Authority. It sports a terrific hotel and restaurant section, and an online 75-page color directory complete with members' logos. Visiting their site, one feels impelled to take Vic's friendly suggestion: "Let's Trade!"

For more information check out http://www.thebarterauthority.com.

Top


From the desk of Bob Meyer..08/08/2006

Red Paper-Clip Barterer Lands Book Deal

Last week we reported that 26-year-old Kyle MacDonald of Montreal signed a movie option deal with DreamWorks. As an aspiring writer, his most recent success might be considered more relevant...he has signed a book deal with publishing powerhouse Random House.

MacDonald and his girlfriend Dominique Dupuis have recently moved into their new, 1920's two story house in Kipling, Saskatchewan.

Google Placing Ads On XM's Radio Channels

Following up last week's news on Google's going after radio spots (via the dMarc media network they purchased), the Web search company and XM Satellite Radio are working together wherein XM will gain access to Google's roster of advertisers without incurring the full cost of running an ad-placement business. XM runs advertising on about 100 of its non-music channels.

More Bartered Radio Time Coming To UK Radio Stations

UBC is the largest independent airtime sales point to media agencies in the UK. And UBC Media has just signed a 3-year deal with Sky News Radio, which currently provides scripts, audio and bulletins, for radio stations in the UK.

The link-up will result in a rapid expansion of the Sky News Radio service, delivering a weekly reach to UBC's network of 5.5 million adults via barter syndication.

Top


 

From the desk of Bob Meyer...08/01/2006

Google Radio Kicked Off

In this column, on February 14, we reported on Google's January acquisition of dMarc Broadcasting, as well as dMarc's Smart Barter system which enables radio stations to barter their unsold time to acquire new equipment.

At the time of dMarc's acquisition, Google noted that once it was able to integrate dMarc's technology into its AdWords sales platform, current advertisers could purchase radio spots.

(The dMarc system automates the buying, placing, and tracking of radio ads, the challenge for Google is to make radio ads as uniquely relevant as its web-based ads.)

Google's attempt to start exploring non-web based radio advertising has begun in Detroit. With millions listening to the radio this may signal a new age for Google as they eye continued expansion into different forms of media.

If Google's relevancy approach revolutionizes the way radio airtime is sold for advertising purposes, more advertisers could come back to traditional radio (terrestrial-based radio) to find newly-relevant customers coming their way.

Wallach Receives Commercial Barter Industry "Hall Of Fame" Recognition

Twenty-five year barter industry veteran, David Wallach, will receive the International Reciprocal Trade Association's Hall of Fame Award. His leadership role in the development of the commercial barter industry will be acknowledged at the IRTA Annual Convention to be held September 14 - 17 in St. Petersburg Beach, Florida.

BBX Sells Master Franchise For India

Rakesh Bhatnar and Manish Dutta, owners of a trade exchange in India known as Net 4 Barter, will be major shareholders of a new company...BBX India. (Ownership: Bhatnar 40%, Dutta 40%, BBX International 20%).

Net 4 Barter, with approximately 2,500 members, will become known as BBX Corporate on September 16, 2006, holding the master franchise to operate the BBX Trade Exchange in India. Parent company BBX Holdings Limited is located in Hornsby, NSW, Australia.

A Barter First For Airline Industry In India

Jet Airways and Air Deccan have agreed to fly each other's passengers when flights are canceled. The barter arrangement, in effect immediately, is the first of its kind for the airline industry in India. The airlines also agreed to code share, i.e. carry passengers to destinations not touched by the other.

Red Paper Clip House Trade Set For Movie

The film rights of the real-life story of Kyle MacDonald's barter odyssey has been sold to Hollywood's DreamWorks studio. No details on a production schedule were given, according to The Hollywood Reporter.

MBA's Preferences Have Changed

Newly graduated holders of master's degrees in business from the top universities in the nation now want to join Google and McKinsey & Co., a change from a decade ago when Microsoft, General Electric, and Procter & Gamble were the top choices for employment.

Our Exciting, Evolving World

For all its wonders the Internet is still in the early stages of development, and the future promises some remarkable innovations. A San Francisco company, GeoVector Corp., features "location aware" services, such as the ability to aim smart binoculars at racing yachts and get the name of the boat and its current statistics. The company sees the world itself as a gigantic database and almost everything out there has some kind of geolocated reference.

Will it soon be second nature for you and me to pick up any kind of mobile device and point it at something and get information from the real world...just like it's second nature to hop on your PC and pick up the mouse?

Top


From the desk of Bob Meyer...07/25/2006

China's Ambitious Thinking Involves Barter On Highest Level

China, the world's largest oil consumer after the United States, sees increasingly expensive oil threatening the cash flow of Chinese oil importers, and they're taking action.

The Yangpu Barter Exchange, formally registered in the Yangpu Economic Development Zone, is setting up an electronic trading system which will use trade credits (instead of cash) to access various goods and services...but with an objective of acquiring oil.

Recruiting members is now under way, which will include the governments of oil-producing nations. So far the exchange has 20 registered members, half of which are based outside of China.

Lei Zhende, general manager of the exchange which is located in the southern island province of Hainan, explained, "The focus is on putting together trades of infrastructure for oil. Some oil-producing countries, especially those in Africa, badly need to build up their infrastructure and engineering sector, but they lack the funds to do so.

"Meanwhile, oil-consuming countries like China are struggling with sky-high oil prices, yet they have a strong service sector with a large pool of engineers with technical know-how. Our barter exchange will enable the two sides to efficiently communicate to each other what they need, and then reach deals."

The Yangpu Barter Exchange plans to build a port complex to house a storage facility, the offices of the exchange, and other complementary facilities with a total investment of 11 billion yuan (approximately $1.375 billion).

Other Barter Deals For World's Oil Resources

The Korea National Oil Corporation has also put together an oil barter transaction. This one is with Nigeria, under which Korean conglomerate Daewoo will build a shipyard and railway link in Nigeria.

Additionally, the Oil and National Gas Corporation of India has teamed up with steel group Mittal to offer a range of services to Kazakhstan in return for oil rights.

Tapping Into Chinese Mainland Market Through BusyTrade

With some 600,000 registered users, Hong Kong based BusyTrade.com is one avenue to explore for trade leads, such as tapping into the Chinese mainland market as well as other Asian countries. Of particular interest is the site's virtual money system, called busy dollars, which enable manufacturers and traders to do business online with minimal costs. (One US dollar = 80 busy dollars.)

New Phenomenon Emerging In Our Fluctuating World

One of the biggest stories of this new century is the rise of China and the opening of India. We're now seeing an emerging Asian Union with China at the core as the production platform, and the peripheral nations in East Asia supplying both the capital and know-how.

This economic "Union" is about the size of the European Union (EU), but without the bureaucracy and all of the stultifying regulations...and its growth is much faster than Europe's.

So in short, and as author Thomas L. Friedman points out in his exceptional book, The World Is Flat: A Brief History of the 21st Century,

due to great achievements in technology which have enabled inter-connectiveness on many levels, the global economic playing field is being leveled in ways that we haven't begun to fully appreciate.

Another Advertising Venue...

PassoutMarketing.com, a company from Australia, provides marketers with an opportunity to advertise on the hand of a bar patron by stamping...thus actually "branding" a consumer with an ink stamp.

It allows for easy tracking of patrons that would normally be done in another manner, i.e. another stamp shape or color, or a wristband.

It also allows the person to show off the ad venue or product they were stamped with further than the night of the event, assuming they don't wash it off.

Ads On Air Sickness Bags...

US Airways is now placing ads on something that was heretofore unmentionable! Passengers will have new, commercialized sickness bags in their seat pockets come September. The ads are the latest initiative the company is using to achieve a bigger profit. Will the first advertiser be Dramamine?

Touma Reports On BBX Property Fund

The BBX Property fund, to be listed on the Australian Newcastle Stock Exchange and underwritten by Martin Place Securities, closes July 28. Managing Director Michael Touma of Hornsby (NSW) reports "our target was to raise a minimum of $500,000 in cash, and so far we have raised $2 million. Funding will consist of 33% barter currency, 33% cash, and 33% in debt funding."

The fund was established to offer tax effective investment opportunities for new and existing BBX members in both cash and trade dollars.

Ah, The Beauty Of The Web!

It is now possible to make reservations at 170,000 restaurants nationwide at RestaurantRow.com.


From the desk of Bob Meyer...07/18/2006

Gift Cards Have Become Big Business For Restaurants

The National Restaurant Association says that restaurants are the top category of gift cards/certificates that consumers want to receive. And restaurants love them as well, because spending by gift card recipients is typically 20% to 50% higher than a restaurant's average check.

Gift cards are also a great advertising vehicle because they're so easy to carry. Restaurant owners who focus their time and effort on a custom card design (it should be consistent with other marketing materials) will find they're an excellent way to get increased consumer attention.

As the marketplace expands for gift cards of every industry imaginable, we will continue to see a growing market for the exchanging (bartering) of gift cards. An example: www.swapagift.com.

China's Richest Entrepreneurs Are Traders

If China is to flourish, its best hope lies with a group of entrepreneurs which barely existed a decade ago. According to Andy Xie, chief economist for Morgan Stanley in Asia, the rise of the entrepreneurs comes as capital flows not only to state behemoths, but to new enterprises. "There is a gold rush in China because Chinese entrepreneurs can get capital and use other people's money," Xie reported.

Managing director at Goldman Sachs Group, Fred Hu, says private entrepreneurs are a transforming force in China. Both Xie and Hu said the entrepreneurs have wild dreams and you can't always figure out where and how they make money, except that they are expert traders, buying and selling goods and companies.

"The Next Spielberg" Includes Barter In Huge TV & Film Package

J.J. Abrams, the co-creator and producer of the movie Lost, as well as the director of Paramount's sequel Mission: Impossible 3, has signed a huge deal with both Warner Brothers Television and Paramount Pictures (which thinks Abrams is the next Spielberg)...that will see him earning millions annually.

Included in the agreement is a barter-type arrangement wherein he will receive an additional 35% "success compensation" (what's known in the industry as the back-end) for the revenue from DVD sales, internet downloads and syndication sales.

Frequent Flier Miles Now Revenue Generators, Not Loyalty Programs

According to Randy Petersen, Editor of Inside Flyer, frequent flier programs have changed their course. Promoting customer loyalty has taken a back seat as airlines have turned to generating revenue by selling miles to partners. And it's doubtful the airlines will ever change from their present direction.

Why? Because the programs have turned into huge revenue producers on their own, becoming an annual $4-billion industry. Today, according to Petersen, there are 430 million members with 14.2 trillion miles in circulation. (An average of 33,035 per program member.)

Every single frequent flier program in North America is profitable, Peterson contends. "It's the best thing that ever happened to airlines. There's no doubt that without those programs, maybe two or three airlines wouldn't be around today."

CBS SportsLine Bartering With Maxim

CBS SportsLine and CBS Corp. have entered into a barter agreement with Maxim.com where they will mixing sports and sex to lure more male viewers to their two web sites. (Maxim is a top-selling men's lifestyle magazine.)

SportsLine will provide Maxim.com with sports headlines and real-time scores, with links that bring users to the sports site for the full stories. In return, Maxim.com will supply SportsLine's "SPIN" section with humor and entertainment content that caters to young male viewers which includes a heavy dose of scantily-clad women.


From the desk of Bob Meyer...07/11/06

Facebook Structures Barter Deal With Interpublic Group To Drive Ad Revenue In Win-Win Arrangement

How much is friendship worth? That's an open-ended question, certainly. However, to the likes of social networking sites like MySpace and Facebook, the figures these days are truly staggering.

And for Facebook, according to some analysts, the company is approaching a possible $2 billion valuation, after capitalizing the numbers on their recent transaction with the Interpublic Group an ad agency, marketing and public relations firm.

Facebook, which focuses on the college crowd (with 8 million registered members listing their favorite bands, books and hobbies, on the site), has just traded one-half of 1% of its equity stake to the Interpublic Group for a commitment by IPG to place $10 million in advertising on its web site.

The Facebook barter agreement, in essence, says, "Generate $10 million in ad revenue for us and we'll provide you with equity in our company." Plus the link up with IPG should further Facebook's development of an ad model.

The partnership is also a brilliant move for IPG, for not only do they obtain an equity position in a hot social networking site (the second most popular and one of the top ten most trafficked sites on the Net), but they will receive preferential access to prime ad space on Facebook. And, IPG also acquired the exclusive access to Facebook's user data for research purposes.

Mark Zuckerberg, the former Harvard college student who started Facebook in February 2004, is grinning from ear to ear. According to Business Week, he reportedly turned down an offer of $750 million for Facebook prior to this arrangement.

Agassi & Graf Trading On Brilliant Careers & Fame

Tennis stars Andre Agassi and Steffi Graf have both been world-renowned professional tennis players. Graf retired in 1999 after winning 22 major singles titles. And Agassi, who is one of only five men to have won all four Grand Slam events, is retiring after the U.S. Open later this summer.

The married couple have launched Agassi Graf Development LLC, a real-estate development company focused on luxury home and resort projects. Their first venture is Tamarack Resort, a mountain vacation area about 90 miles north of Boise, Idaho; Bayview Financial, a Miami-based real-estate investment, development and mortgage-finance company is the equal equity partner.

Agassi pointed out that in addition to attaching their names to the venture they will also be pouring themselves into the effort...working on the 225-room condo-hotel at Tamarack's village with a spa and golf course and at least 35 houses with ski in/ski out access.

Costs for the project are forecast at $400 million. As equal equity partners, and after making a small financial investment, the value of trading on their fame, reputations, contacts, and involvement is considerable.

Shades Of Joseph Jamail....

The law firm of Sterns Weaver Miller Weissler Alhadeff & Sitterson of Miami are receiving $247 million for the effort they put forth in a class-action suit in which gas-station owners accused Exxon of over-charging them for gasoline. The full fee award was one of the highest legal ever in a class-action suit. The firm had been working on the case for 15 years, taking it all the way to the Supreme Court! (Total settlement was $1.08 billion.)

The Miami law firm essentially employed the same strategy which Joseph Jamail's Texas law firm used back in the late 1980s when he traded on his firm's time and expertise to represent Pennzoil in its court battle with Texaco.

Given Pennzoil's financial condition at the time, Jamail got the case because he chose to barter his abilities for a percentage of the award if he prevailed, versus collecting an hourly fee for his firm's services. His confidence and the size of the eventual victory, $3 billion, saw Jamail earning an estimated $420 million for his firm's trading efforts.

Bingo! Big Red Paperclip Reaches Goal...Barters For House

On April 25 we reported about Montrealer Kyle MacDonald's efforts to trade a big red paperclip into a house. We editorialized that the reason barter's so exciting is because value is subjective not objective. Proof of such a belief is the successful conclusion of MacDonald's incredible venture.

Last Wednesday the Canadian got a call from Bert Roach in Kipling, Saskatchewan, a small town located 90 minutes outside of Regina. MacDonald was offered a two-story, 1920s farmhouse that he and his girlfriend have accepted. The town council is planning a major party to welcome its newest citizen.

MacDonald was nearly speechless when offered the property. "I just couldn't believe it," he said. "People keep asking me how much is the house worth?" MacDonald says that's so not the point. "I'll never sell the house, this is all about relative value," he stressed. "What's more important to a man dying of thirst in the desert, $1 million or a glass of water?"

MacDonald, whose long journey which began July 12, 2005, now has one last goal, to convince Rocker Alice Cooper (who was one of the legs in the barter progression) to play a free concert at his planned massive house-warming party this coming Labor Day.

Multi Media Distributor Straddles TV, Internet

Bulk TV & Internet, www.bulktv.com, offers a la carte programming as well as comprehensive packages for apartments, condominiums, mobile home communities, hotels, assisted living facilities, correctional facilities, hospitals and student housing.

They are a nationally licensed wholesale distributor for both DirecTV and Dish Network satellite, and a nationally licensed distributor for Guest-Tek, one of the largest providers of high speed Internet covering more than 450,000 units in the U.S. and Canada.

Top


From the desk of Bob Meyer...07/04/2006

Cornerstones To Success Remain Constant

On this Independence Day, the 4th of July, it is worthwhile to think back for a moment and try to imagine what it must have been like 230 years ago in a sparsely--populated land with the incredible challenges and obstacles our forefathers faced.

I'm sure there was trepidation on their part when they made those momentous decisions and then took the necessary action to seek independence, thus carving out their place in history. What stands out was their positive beliefs in the outcome, accompanied by tenacity and intestinal fortitude...which are still the cornerstones to success in any great endeavor.

IMS Barter Revenues Jump Up...Debt Reduced $800,000

International Monetary Systems (OTCBB:INLM) announced May revenue totaled $625,000, an increase of 39% over May of 2005. The company also reported that it has paid off $800,000 in bank credit--lines and other notes, as well as repurchased shares from previous trade exchange owners, to reduce its liability on these obligations.

CFO Danny Weibling reported that assets have increased to $11.4 million. IMS Barter (previously known as Continental Trade Exchange) serves 10,000 customers in 37 U.S. markets.

Chris Haddawy Of Oakland's BizXchange Gets Ink

An excellent write-up on BizXchange's Oakland office was posted on www.InsideBayArea.com. The article quoted Chris Haddawy, who directs the Oakland operation, and several local merchants who extolled the virtues of working through a trade exchange versus direct bartering.

Wine On Barter

The world is awash in tasty, inexpensive wines from all over the globe. Given the oversupply, and depending upon local laws, it's fair to estimate the amount of wine available for trading will be greater than ever.

In California last year's grape crop was huge, up 35%. Couple such a record crop with the influx of foreign wines and two things are guaranteed--a great deal of wine will be sold inexpensively, and smart wineries will be putting on their barter hats.

Global Advertising Outlook

According to PricewaterhouseCoopers' annual forecast, Global advertising spending will increase at a 6.2% compounded annual growth rate to $521 billion in 2010 from $385 billion in 2005. The Internet will remain the fastest--growing ad medium, with online ad spending growing at an annual rate of 18.1%, reaching $52 billion in 2010.(Online spending last year was $12.5 billion.)

U.S. Net Debt Growing

Americans held overseas stocks, bonds, factories and other assets totaling $10.01 trillion, as of the end of last year. Foreigners held $12.70 trillion in American assets, the difference equals $2.69 trillion which is the net U.S. debt, up 14% from the end of the previous year's $2.36 trillion.

Another "If only" Story...

We mentioned several issues ago that Yahoo! passed-up the opportunity to acquire Google for $3 billion. (Google's market cap now approximates $114 billion.)

Now it's been reported in Wired magazine that Google could have acquired MySpace for $290 million, about half of what Rupert Murdoch, media mogul of News Corp., eventually paid. News Corp. has been doubling MySpace advertising revenue every quarter and expects to reap $200 million in revenue this year on its MySpace acquisition.

Top


From the desk of Bob Meyer...06/27/06

Growth Of World Trade & Countertrade Continues Upward

When you consider the incredible number of people (6 billion and growing) on the earth today...all desiring a better life for themselves and their family...it's quite easy to be optimistic about economic growth.

According to the World Trade Organization world exports of merchandise and commercial services topped $11 trillion in 2004 (most recent statistics available), and world imports totaled a bit more at $11.5 trillion.

Officials at the GATT organization (General Agreement On Tariffs & Trade) report that countertrade accounts for around 5% of the world trade figures. The British Department of Trade & Industry has suggested the figure is 15%, while numerous scholars believe it to be closer to 30%.

Countertrade takes various forms, which include the following:

Barter - the exchange of goods/services directly for other goods/services without the use of money as means of purchase or payment.

Switch trading - the practice in which one corporation sells to another its obligation to make a purchase in a given country.

Counter purchase - the sales of goods and services to a country by a corporation that promises to make a future purchase of a specific product from the country.

Buyback - the export of industrial equipment in return for products produced by that equipment.

Offset - a counteraction agreement that a corporation will make a hard-currency purchase of an unspecified product from the nation in the future.

(We invite you to check out our Countertrade Section for many excellent articles on this sophisticated form of business.)

ITEX Buys Back Stock

On June 23, 2006, ITEX Corporation (OTCBB:ITEX) repurchased 500,000 shares of common stock from a stockholder for $0.55 cents per share, or $275,000. The shares were immediately canceled reducing the overall common stock share count to 17,906,132 on a fully diluted basis.

(ITEX processes more than $250 million a year in cashless transactions through 22,000 member businesses managed by 95 franchisees and licensees.)

IMS Commits To Organic Growth

International Monetary Systems (OTCBB:INLM) reported that all issues requiring a vote at the company's annual shareholder meeting in June  were overwhelmingly approved by an affirmative vote of 99%. IMS's vision and plan for the future includes a commitment to organic growth through the hiring of outside salespeople and the enrolling of new clients.

Small Business Owners Pay The Old Fashioned Way...Checks & Cash

The credit card industry is beginning to focus on business customers, as the consumer market is already saturated with plastic. Up to now smaller firms have been a difficult market to penetrate because many vendors (who deal with those firms) still don't accept plastic forms of payment.

Morgan Stanley estimates that just 35% of small-business owners have a company credit card. Of those, only about one-third of business related spending is made with that card.

The barter industry estimates that approximately 1% of small-business owners, in a given community, are members of a trade exchange and use a barter credit card.

Our Changing World

Immigrant workers in the U.S. and other Western countries have become a vital economic development tool for the (poor) countries they came from. Last year about $170 billion of remittances world-wide were sent to developing countries by overseas workers.

That is about twice the level of foreign aid that went to these countries, according to the World Bank. Although an additional $80 billion was sent from overseas workers, it did not go through formal channels.

Top


From the desk of Bob Meyer...06/20/06

Bartering Gift Certificates--A $55 Billion-A-Year Industry--Is Expected To Grow Dramatically

The possibilities for barter deals in many areas of the economy continues to escalate. One example is the gift card and gift certificate arena.

Of U.S. shoppers, 74% buy at least one gift card or gift certificate annually...their yearly usage has been growing 11% to 15% since 1993. In effect, few things are more popular, especially during the holidays, than a gift certificateCunless it's from a store you don't like.

Enter the secondary gift card/certificate market. We recently talked with Mary Jane and Michael Kelly, who launched www.swapagift.com in 2003 to provide a way to redeem or trade gift cards in an open market. Today they have 20,000 users.

Their site offers the consumer an inexpensive, effective means of bartering unwanted cards for other ones they would prefer. The site makes use of a proprietary matching mechanism that automatically identifies matching gift cards, facilitating the barter process.

Ms. Kelly shared how some people use the site:

1) Contractors obtain their supplies by acquiring Home Depot and Lowe's gift cards.

2) A broken engagement saw a man stuck with an engagement ring putting his Zale's gift card on the site.

3) A woman who owns a kennel and dog rescue service buys the PetSmart gift cards.

4) Sales people who are awarded gift cards can exchange them for  desired cards, or cash out at 70 cents on the dollarCthe price at which Swapagift will purchase cards.

The largest single deal ever made on the site? It was a $10,000 Best Buy gift card won in a cigarette sweepstakes. With a balance of $6,500 on the card, after several purchases, the owner cashed in the card.

As this huge $55 billion industry will continues to grow, we can expect the inter-trading of gift certificates/cards to expand dramatically.

Here & There. . .

International Monetary Systems (OTCBB:INLM) as officially changed the name of its operating subsidiary, heretofore known as Continental Trade Exchange, to IMS Barter. CEO Don Mardak says the change was made to avoid confusion, and to further the company's uniformity and branding efforts.

Further information on IMS can be obtained at their web site: www.internationalmonetary.com.

Small Business Television Network (SBTV) is using barter transactions and synergistic marketing to reach the small business market in a cost effective manner. The company has barter ad agreements with Fortune Small Business and Victoria magazine, and is negotiating deals with both Inc. and Entrepreneur.

They are also working on content deals with non-publishing advertisers such as Cisco Systems, where they would run a piece on SBTV about them. Cisco can then use the segment on its web site, which will further publicize the network.

Here's a great "If Only" story:

In 2001, Yahoo boss Terry Semel met with Google's two young founders, Larry Page and Sergei Brin, for dinner and talk turned to a possible deal between the two Internet companies.

Semel, the former movie mogul, said he was intrigued by the possibility, even though the founders confessed they didn't have much of a plan about how their company would make money.

The pair said their company, which was just getting off the ground, was worth $1 billionCbut added they didn't want to sell. Semel checked in with them a week or so later. They told him Google still wasn't for sale, and that the price had jumped to $3 billion.

Semel replied, "You still have the same business you had two weeks ago, right? Which adds up to nothing." From Semel's perspective, Yahoo couldn't and didn't buy the company.

Since that encounter, Google has gone public and become the darling of the investment community. Its current market valuation is around $115 billion, and its market cap is approximately $44 billion.

Top


From the desk of Bob Meyer...06/13/06

A fluctuating, increasingly inter-dependent world-wide economy has seen the financial marketplace devise instruments to provide protection against unforeseen financial changes in the economy.

Sophisticated investors use these various instruments, known as derivatives, to hedge risk. Those who don't understand derivatives often claim that they are merely speculative instruments and akin to gambling.

Such thinking is misguided. Derivatives, in their many forms, serve an important purpose. Rather than adding risk, they offer protection against rising interest rates and fuel prices, declining bond values, or swings in the price of commodities such as corn.

The annual trading value of derivatives is six times that of the stock equity markets worldwide, with a face value of $335 trillion, up from $94 trillion in 2000.

Trade Dollars Are Derivatives And Enable Small Business Owners To Manage Risks More Effectively

Trade dollars are derivatives because they represent a future contract. They provide the ability to purchase future products or services, based on their cash equivalent value. (One trade dollar equals one cash dollar.)

Few members of a trade exchange would identify their trading efforts as buying and selling "futures," but when moving unsold inventory or excess capacity through the barter marketplace, they're essentially buying future options on goods and services.

In other words they have the right, but not the obligation, to make a purchase in the future. Best of all, the trade dollar has no specific time frame for its use before facing expiration. Unlike other options, they're good until used.

When one acquires valuable "trade dollar futures," it offers a form of financial protection and insurance against the uncertainties in the marketplace. And it can be accomplished at the lower "variable cost" of doing business.

In today's world, almost without exception, the small business owner is undercapitalized. So it makes perfect sense to embrace the barter arena, as well as the traditional cash market, to provide added financial insurance for one's business.

Our Changing World

General Electric (GE), one of the world's most valuable companies with a market cap of $354 billion, recently filed a 24,000-page tax return. Because the IRS requires it of companies with assets of over $50 million, it was done electronically.

The cost to GE for developing the means to file electronically approximated $1 million, according to GE's senior tax counsel John Samuels. 

Top


 

From the desk of Bob Meyer...06/06/06

Size Does Matter In The Barter Business

News from Milwaukee-based Continental Trade Exchange (CTE) reported that sales rep Tom Schlindwein announced he could bring 85 Pizza Hut restaurants into the exchange if someone could line up 1,600 oil-change gift certificates.

Trade broker James Nooyen immediately called his client Fast Track, and confirmed they could provide the certificates. Thus, a $133,000 trade was consummated in less than three weeks.

Another client, a travel group located in Connecticut, was able to acquire 10 rooms plus meals in Jamaica with the capable assistance of Nancy Herrmann in the CTE/IMS travel department. The transaction was valued at $30,866.

Transactions of this nature become commonplace as a barter company's inventory expands through its membership growth. Availability of such products/services is necessary for the trading optimization of their clients. As noted in a previous Tuesday Report, collective efforts within the barter industry will enhance these efforts immensely.

Barter Your Timeshare For That Needed Work

Are you the owner of a timeshare? If so, the next time you are negotiating for home repairs and services here's good question to ask, "Would you be interested in staying at ABC timeshare-resort in return for some or all of your bill?"

Your timeshare offer--providing vacation accommodations--makes for an excellent barter tool. One recent trade we learned about was an owner who exchanged a two-week booking in Hawaii for $5,400 of needed dental work. Both parties were happy with the trade.

Out-of-pocket costs for the owner's two weeks included the maintenance fee's of $800 ($400 each week), the RCI exchange fees of $149 per week, and a $49 charge for the RCI guest certificate--a total of $1,147.

Timeshares can be acquired for cash or barter very inexpensively on the resale market. Hence, the annual outlay for this trading tool is basically the cost of maintenance fees and taxes.

Bartering For Hotel Rooms Takes On Added Significance

Last year was another record year of profits for the lodging industry, according to Bjorn Hanson, of PricewaterhouseCoopers. Hanson, a principal in the firm's hospitality-and-leisure practice, reports that in 2006 the average hotel room-rate will have the largest yearly increase ever, climbing $5.78 to $96.69.

Although increased travel creates stronger demand, this year only 75,000 new hotel rooms will be added to U.S. inventory...43% fewer than the 132,000 new rooms added in 2000.

Not only are fewer rooms being built, but hotels are being converted into condominiums (a phenomenon that's sweeping Chicago, New York, San Francisco and Los Angeles) which takes inventory off the market...thus the continuing escalation of room rates can be anticipated.

As prices rise, travel on trade will become more desirable and in greater demand.

Airlines Working Smarter--Not Good News For FFM Holders

Major U.S. airlines are recovering from five years of brutal loses by increasingly being unwilling to fly half-empty aircraft (to stay competitive on a given route), just for the sake of feeding their nationwide networks.

Last year said airlines filled an average 77.6% of their seats on domestic and foreign flights...the highest levels since 1946. It's predicted that the percentage will rise to around 85% this summer, potentially the highest ever recorded.

Therefore many more planes will be flying completely full, and frequent flyer mile holders wishing to book a flight will have a tougher time getting aboard.

Top


From the desk of Bob Meyer...05/30/06

The following letter was received from Peter Tucker, President of CTEX in Toronto, Canada. His response to my comments (on how algorithms will be a positive assist for the barter world) in this section of the May 16 issue, asks the question:

"Is Barter Industry Ready For The Coming Technology Tsunami?"

Bob,

In the recent Tuesday Report article on www.Swaptree.com, I found it interesting that they've developed technology with sophisticated algorithms to pull off direct trades between more than two parties.

It's all done for free (cashless) with no rules and regulations or protective manipulations by barter companies. Not everything is available yet, but the implication is that it will be some day.

And maybe a financial giant might just want to have their credit card banner ad front-and-centre to help visitors complete their transactions (taking it to the next level of growth).

So as we see this progress, what does this say about the future of the commercial barter model? Does the barter industry have a breakwater to protect it from the tsunami-like effects of Internet technology flooding its market?

Or will the industry be washed away virtually overnight when these technologies hit the beach? Travel online went from zero to $100 billion annually in a handful of years. 

Meanwhile the barter industry has some breathing room, as this new software has yet to overcome the pricing issues between items of differing value. But given that they've nailed the trading of products down to UPC bar codes--used on just about everything we buy--I would assume any other pricing challenges will be solved.

Perhaps the one thing the barter industry has still, is it's collective database of a million clients. Yet we still have not come up with a formula to combine and multiply. Will we do that? 

Peter Tucker, President
CTEX Group
http://www.ctex.com

Dear Peter,

I agree, the industry's collective database is impressive. It's been an extraordinary achievement, given their under-capitalization. As you know, these individuals are extremely entrepreneurial, and getting them to collectively agree on something is like the proverbial "herding of cats."

At this time I see no evidence of any serious collective thinking toward your suggested strategy of combining and multiplying. As you've read the article "Suplizio Addresses Biggest Challenge Facing Barter Industry" (found on the bottom of our home page), you know that Paul Suplizio has advocated such a collective effort.

Years ago, some within the industry suggested a move in this direction would parallel MasterCard's network through which card transactions are processed. MasterCard is owned by thousands of financial institutions, and yet these same banks continue to compete with one another in the marketplace. Such a model could be adopted by the commercial barter industry.

(Last week, on May 25, an Initial Public Offering by MasterCard raised $2.4 billion--for 46% of the company's equity--reinforced the power of a joint network ownership.)

We're also seeing movement by major stock-and-bond exchanges toward consolidation, to secure their futures beyond national boundaries. The Nasdaq Stock Market is desiring to merge with the London Stock Exchange. The NYSE Group wants to acquire Euronext, which runs exchanges in Amsterdam, Brussels, Lisbon, and Paris.

(Trading on global financial-markets has risen 20% a year for 10 years. Last year investors bought and sold $51 trillion worth of stocks, and made bets on short-term interest rates with more than 800 million futures contracts.)

The consensus among a growing number of financial experts is rather direct--serve your constituencies, which in the financial sector means going global, or become irrelevant.

The commercial barter industry's potential is staggering, as the growth of entrepreneurs around the world continues to multiply. Having access to another form of capital--the trade dollar--can be of enormous benefit, as so many of us in the industry have observed first hand.

But I have yet to see any movement toward building an infrastructure, as suggested by Suplizio or similar to the MasterCard model.

My observations lead me to the conclusion that a handful of large barter companies fervently believe they will one day prevail in the marketplace, thereby controlling the vast majority of the multi-lateral trading activity.

And, of course, the application service providers (which have grown substantially in the last six years by providing accounting and other services to the smaller trade exchanges) also see themselves as playing a significant role in the future, wherein they become the network of choice.

But, in reply to your question about the barter industry combining and multiplying together...I just don't see any evidence of it. 

Bob Meyer
BarterNews

Touma Completes First Step of BBX Global Barter Alliance

Australian based BBX Holdings has announced the sale of a master franchise covering the north and south islands of New Zealand for approximately $2 million. Managing Director Michael Touma says it's the all-important first step in BBX's goal of building a global barter trading alliance. For more information see: www.ebbx.com.

Top


From the desk of Bob Meyer...05/23/06

The World's Largest Private Currency Continues To Soar!

Airline frequent flier miles (FFM) are without doubt the largest private currency in the world. Here's a quick update on the ever-evolving currency and some of their future challenges ahead.

(For a look at other type of private currencies see our Secondary Capital Section, www.barternews.com/secondary_capital.htm.)

It was in May 1981, 25 years ago, that American Airlines introduced the first frequent flier program--a program designed to build loyalty among its passengers. No one envisioned what would eventually result from such a marketing idea.

Today more than 130 airlines issue FFM and 120 million travelers worldwide have accumulated 14.2 trillion frequent flier miles, according to editor and publisher of Inside Flyer magazine Randy Peterson. That's enough FFM for 568,000,000 flights.

According to the U.K.s Business Guardian publication, a frequent flier mile has a value between 1-cent and 6-cents each. At 3-cents each, the 14.2 trillion miles have a value of $420 billion!

Frequent flier miles are major sources of revenue for the airlines. In the U.S., carriers annually sell about $2 billion FFM to other businesses to use as customer rewards. Thus, people who rarely fly have the ability to earn miles when using credit cards, taking out a mortgage, eating in restaurants, or buying flowers.

Interestingly--disconcerting if you really think about it--the sale of FFM is the most-profitable part of many airlines. Yet the actual cost of fulfilling these "free" tickets is minimal...less than $15 on average, according to an article the April Harvard Business Review titled "Your Loyalty Program is Betraying You."

Joseph C. Nunes, associate professor of marketing at the University of Southern California's Marshall School of Business and co-author of the Harvard Business Review piece, says in the short term the frequent flier mile programs are in good shape.

Longer term, however, could be a different story as credit cards and/or mortgage companies may one day wake up and say, "To heck with enticing customers with FFM. They're costing us too much and consumers aren't as attracted to them as they once were. We're going to compete on price instead." (That's what happened years ago to the Green-Stamps-for-products redemption program.)

Additionally, fulfillment could become a major problem as airline fleets are decreasing in size. The legacy carriers of the world--such as United or American--had a combined fleet that was 22% smaller at the end of 2005 than in mid-2001, according to industry trade group Air Transport Association.

While there is little chance of fulfilling on 586 million flights as long as the industry continues selling $2 billion of FFM annually, the following story shows United is taking a small step in the right direction.

"Choices" Air Currency Launched By United

In an effort to make FFM more attractive, United Air Lines has launched a separate new form of air currency it calls Choices miles. The new program offers complete transparency in that there is no waiting, no black-out dates, and no seat restrictions or other conditions attached.

Choices can only be earned by using a Chase United Mileage Plus credit card. Although the miles can be used for flights on United, or hotel and car rentals, they must be booked online at www.united.com.

The Choice miles can also be used, at a penny-per-mile, toward payment of a previously purchased flight made at www.united.com. It's only a matter of logging into the web site and transferring Choice miles against the billed airfare, i.e. the credit card balance is reduced when miles are credited against it.

Example: A ticket is purchased using a Chase Mileage Plus credit card via United's web site for $299. When the bill comes you log on to united.com and transfer 20,000 of your Choice miles to apply against the $299, reducing your bill and ticket payment to $99. (Unlike a regular award ticket, you also earn FFM on the transaction.)

Best Wishes To Pili As He Moves On

A friend of the barter industry, Pompiliu Verzariu, has retired from his position as director of the Financial Services and Countertrade Division at the International Trade Administration.

A leading expert on countertrade and offset issues, Pili spoke at several International Reciprocal Trade Association (IRTA) functions. He authored numerous publications on countertrade, offsets and joint ventures, and provided BarterNews with several articles on his expertise.

Dr. Verzariu received his doctorate in physics in 1971 from the American University in Washington (DC). He conducted research on geophysical phenomena prior to joining the Department of Commerce in 1973, publishing 12 scientific papers while at the Applied Physics Laboratory of the Johns Hopkins University. He is now an adjunct fellow for the Center For Strategic and International Studies in Washington.

Top


From the desk of Bob Meyer...05/16/06

Algorithms Will Be Positive Assist For Barter World

The first time I heard of--and learned about--algorithms was back in 1992, when interviewing the bright mathematician and founder of a complex and revolutionary trading program called UltraTrade.

Algorithms are a procedure or formula for solving a problem. They are essential to the way computers process information, because a computer program is essentially an algorithm. It tells the computer what steps to perform and in what sequence, in order to carry out a specified task.

Issue #25 of BarterNews reported on the brilliant team of 41 visionaries at UltraTrade who were working on a ground-breaking way of thinking mathematically. One that would enable them to process huge volumes of information on a 20-dimensional level. (UltraTrade's ambitious efforts were comparable to that of a little leaguer trying to hit one out of Yankee Stadium against a major-league pitcher like the Big Unit.)

Their goal was to have the world's largest corporations utilize their revolutionary technology--to streamline their operations and increase profitability through barter--by searching for and finding ways to facilitate tens-of-thousands of simultaneous profitable trades.

The 53-year-old founder had a sudden heart attack and died in 1993, as did the UltraTrade dream...without ever having completed a trade.

New Person-To-Person Barter Sites Underway

Today, on a much more modest but realistic level, the use of algorithms (for conducting trades) is again being implemented in the marketplace. And, assuredly, we will see advancements in this direction. Someday we may even see a workable UltraTrade model.

An online barter startup called www.Swaptree.com is presently getting attention, because of their ability to put together direct trades between two to 4 parties. To facilitate the trades, which are limited to books, CDs, DVDs and video games, Swaptree requires the use of UPC bar codes of the titles.

Most noteworthy is the attainment of a cooperative effort with Amazon, eBay, and nine other sites...whose users are notified when the book or CD they're seeking is available on Swaptree. The company says no commissions will be charged for the arranged trades, as they anticipate obtaining revenue by selling ads.

Other Efforts. . .

Another online barter site, www.SwapThing.com, offers greater trading versatility than Swaptree in that users can use a combination of goods and services in their bartering efforts. Plus and when an imbalance occurs, cash can be used to even out the trade.

Several years ago we reported on Tom Langel's TradeTracker, a matching tool for three and four way exchanges. It's used to track real estate presentations and identify transactions for brokers (exchangors) specializing in 1031 exchanges.

TradeTracker was also used as a high-tech barter/auction system--matching product to product with different items or services on a multi-level platform. See www.tradeaway.com.

Top


From the desk of Bob Meyer...05/09/06

"You can observe a lot just by watching."

--Yogi Berra

Many times in an interview with a reporter I've been asked about the use of barter in the everyday world. As the above quote--by a former manager of mine--shows, you really can see barter's ubiquitousness by observing everyday happenings.

Last issue, for instance, we looked at the multi-billion bartering that takes place in the film and TV industry and how Starbucks is trading on their distribution. Also noted were two unique trading alliances: The Foxwood Indians Resort Casino in Connecticut with the MGM Mirage, and Bank of America's trade of its BankBoston operations in South America for a minority stake in Brazil's second-largest private bank.

Here Are Some Other Examples Which Reinforce Barter's Versatility

  • Trading Kidneys:
    In Toronto two couples were recently involved in a life-saving barter of kidneys. Such organ trading is admittedly rare, but in situations where families of those in need of transplants can trade organs with each other for healthy compatible organs are indeed life savers. These cases happen when patients, who are not tissue-compatible with their own willing donors, can exchange their donor's kidney for a kidney from another donor.
     
  • Bartering For Winemaking Education:
    Don Thiessen is the owner of Stacked Stone Cellars, a winery located in Paso Robles (CA), is a man of many talents. While in college he studied film-making, then went to culinary school, became a licensed guide for fishing and hunting in Colorado, and later raised bees with his own label of honey.

    In 1976 he bought a 10-acre property in Paso Robles while vacationing from his home in Colorado. At the time he never envisioned planting grapes and making wine, he just loved the community. Being a "Renaissance man" (versed in many fields of knowledge), Thiessen found the subject of winemaking fascinating and moved forward with the help of barter.

    As the owner of Don Thiessen Construction, which builds commercial and high-end customer residential projects, he bartered a house addition in exchange for an education in winemaking. His winery now produces 14 wines in addition to the estate zinfandel...Stacked Stone Cellars presently produces 2,000 cases a year.
     
  • In-Kind Barter Promotes International Flair:
    Diva Bikinis, a young Tampa Bay (FL) company established in 2002, manufacturers and distributes luxurious high-quality micro bikinis globally. To create an international flair for this product the company features specific vacation spots throughout South America, the Caribbean, Eastern & Western Europe.

    Much of the expense for the firm's multi-faceted, creative marketing approach is covered through its astute "in-kind" barter transactions with airlines, limo companies, travel bureaus, tourist boards, unique boutique hotels and private retreats.

    In exchange, Diva Bikinis provides exclusive credits and referrals to its trading partners including photo documentation of the trip, credits in the "Diva on Tour" DVD, as well as on both its web site and international calendars.


    All parties stand to profit handsomely by leveraging their variable costs to acquire widespread international exposure for a minimal expense.

This Observation Has A Message...

The recent visit by China's President Hu Jintao was remarkable when noting the first stop on his U.S. visit. It wasn't to see President Bush, but rather to visit the world's richest and possibly most famous businessman--Microsoft's founder Bill Gates.

One wonders...is business more important than politics to the Chinese? Certainly, China is important to American corporations.

Ma Kai, head of China's National Development and Reform Commission, says U.S. investment in China has skyrocketed. In 1980 only 23 U.S. firms had operations in China, and their combined investment was $120 million. By 2005, there were 49,000 businesses with a combined investment totaling $51 billion.

Congratulations To Scott Stinnett

Scott Stinnett, VP of Sales for The Barter Company in Atlanta, has reached the landmark of signing up his 1,200th client. Stinnett, once a client when he owned a barbecue restaurant, knows the value of barter because he used it (while operating his restaurant) for billboard advertising, in addition to many other needs.

During the past eight years with www.thebartercompany.com he attributes his considerable success to the fact that he could share his own experiences with new prospects. "When I explain to them what I did as a member of a trade exchange, they can immediately see the ways they too can incorporate barter into their operation."

Jack Schacht's ITA Offers Spanish

Go to www.ita.com, and you can now view the online video in Spanish. In addition, Illinois Trade Association's off-line sales materials are available in Spanish.

Top


From the desk of Bob Meyer...05/02/06

Burgeoning Multi-Billion-Dollar Bartering In Film & TV Started Long Ago

Media research firm PQ Media did a study last year that showed 64% of products placed in movies and television shows are done on a bartered basis. The trading of "exposure" is a multi-billion-dollar way-of-doing business. (It accounted for $2.44 billion in 2005, and is expected to grow 15% a year through 2009.)

It started in the 1950s with the acclaimed movie, The African Queen, when actress Katharine Hepburn's character was paid by Gordon Gin to toss its liquor bottles overboard.

Then in a 1967 beverage plug, a young Dustin Hoffman sipped a can of Olympia beer as he floated in Mrs. Robinson's swimming pool in The Graduate.

The advertising technique really came of age in the early 1980s with the film ET. When M&M/Mars turned down director Steven Spielberg's request for permission to use its candy in the film, he turned to Reese's Pieces...owned by Mars' rival Hershey Foods. The brief scene in which the candy was used set off a sales boom for the Reese's candies.

Product placement has always been viewed as an alternative medium, but in the last few years it has become an established marketing tactic. By getting various products on trade, Hollywood saves a bundle of cash from its production budget. In return, products get immortalized on film.

With the average cost of making a movie now over $60 million, and marketing costs running another $20 million or more, studios are under intense pressure to shave expenses where they can. Bartering "product exposure" is a simple and productive way to offset costs.

Editor's note: The product placement with the most sizzle could well be Learjet...the company typically provides its planes to studios to cart around cast and crew in exchange for the plane appearing in the movie.

Starbucks Trading On Their Distribution

When you have 5,500 North American stores and a sizzling positive brand, there is no end to what can be accomplished. First it was the marketing juggernaut's move into music where the Starbucks buzz turned Ray Charles' Grammy award-winning "Genius Lives Company" into a runaway, 1.3 million CDs best-seller.

Now it's on to the movies...this recent move is indicative of the expansive thinking coming from their Seattle headquarters. What's their ultimate goal? Becoming an entertainment destination.

Starbucks is a producer of the film Akeelah and the Bee, a story of a young African American girl winning a spelling bee. Although they did not put a dime into the production, they astutely leveraged their enormous distribution system...trading on their unique retail environment which attracts repeat customers up to five times a week! In addition to receiving a share of the film's profits, they will sell the DVD in stores.

Looking ahead, the company has tapped the famed William Morris Agency to help them identify music, film, and book projects for future marketing and distribution consideration.

Top


From the desk of Bob Meyer...04/25/06

Value Subjective, Not Objective...That's Why Barter Is So Exciting!

By now millions of people have heard about the story of Kyle MacDonald, a 26-year-old fellow from Montreal (Canada) who had an internet connection and one big red paper clip. His story has been written up in virtually every North American major newspaper, as well as others around the world. Business Week and other prominent business publications have covered the news, too.

As the story goes, this young visionary dreamed of using the community power of the Internet to barter that paper clip for something better, and then trade again for something else, and so on until he had obtained a house. MacDonald is getting closer to his goal, as his trading has resulted in acquiring one year's free rent on a house in Phoenix.

The story began last July...and the trades have gone as follows:

  • Paper clip for a fish-shaped pen.

  • Fish-shaped pen for a clay doorknob with a funny face on it.

  • Clay doorknob for a camping stove.

  • Camping stove for a generator.

  • Generator for an "instant party."

  • Instant party for a snowmobile.

  • Snowmobile for an all-expenses-paid trip to Yahk, British Columbia.

  • Yahk trip for a panel van.

  • Van for a recording contract.

  • Recording contract for the year of free rent in Phoenix.

The latter trade was with Jody Gnant, www.jodygnant.com, who says

there is an amazing energy going on with this project. She admits the value of the rental property far exceeds that of the recording contract, but she says such calculations are of no concern to her.

But her actions say that such calculations are really only part of the equation. And her trade reinforces the fact that the true value of anything is what someone else will pay you for it. Most of us have experienced this fact--that the value placed on various goods and services depends on what it's worth to the person who wants it.

That's the real story here, and it's the magic of barter. It's also why there is enormous opportunities when one is bartering! People don't just live off ones and zeroes. They live with their dreams, aspirations, and what is important to them. The life experience Jody Gnant will derive from this barter effort will be with her for the rest of her life, and very well could be life-altering.

Needless to say, Kyle MacDonald's life has forever been changed. Hollywood has already called about making a movie of his story. Pretty heady stuff for a guy who was delivering pizzas and working other part-time jobs to make ends meet.

Trading takes place on many levels, as MacDonald's amazing accomplishment has shown the world. To follow Kyle MacDonald's venture check our http://oneredpaperclip.com.

This story reinforces what we've been preaching for decades...wealth is not limited to just what you have in your bank account.

Here's A Service For Direct Trading

If you're looking to trade personal property and believe that value is subjective not objective, you might want to check out Spud Barrett's www.barrettexchange.com. Barrett has an exchange auction board he's been conducting in the USA and Canada since 1978.

Top


From the desk of Bob Meyer...04/18/06

A Talented Guy Has Left The Barter Industry

Heard from Peter Tucker, President of the CTEX Group, www.ctex.com, that one of the more creative guys in the barter business, Todd Bol, is putting his talents to other uses now--as a cofounder of the Global Scholarship Alliance. GSA supplies nurses from the Philippines to fill the shortages in our country's hospitals.

When I last talked with Todd he was focused on assisting various American firms in the fulfillment of their offset commitments. Bol authored a very fine article in BarterNews issue #54 titled, "Countertrade Creates Symbiotic Relationship Between Sellers and Buyers." That material can be found in our Countertrade section, at the bottom of the page.

ICON Brings Online Expert Aboard

Corporate barter company ICON International of Stamford (CT) has added Jim Meskauskas to their corporate team as VP of Online Media.  Meskauskas, with a B.S. degree from UC Berkeley, writes regularly about the online advertising industry as a columnist for the ClickZ weekly "Online Spin" column for MediaPost and MSN's Agency Alliance.

He started in media planning for Nestle and Burger King inn the mid-1990s, and opened Mediasmith's New York office in 2000. His clients have also included Hormel, Amazon.com, Hotmail, Virgin Atlantic and TAP Pharmaceuticals.

Microsoft Barters Its Patents

Last year Microsoft spent $1 billion to license intellectual property yet collected just one-tenth of that amount, $100 million, in royalties on their patented technologies. To control those costs the company has begun licensing its patented hardware technology.

The firm is also using its patents to barter cross-licensing deals with Cisco, Siemens, and Toshiba to access technologies those vendors own and close the company intellectual property spending deficit.

Interesting Travel Statistics

While France now attracts more visitors than any other nation, and China may predictably overtake France in another 15 years, today's traffic at airports is another growing story.

Some 4 billion passengers passed through the world's airports last year, up 6% from 2004, according to industry body Airports Council International. That same year the world's top five busiest passenger airports were Atlanta, Chicago's O'Hare, London's Heathrow, Tokyo's Hanada and Los Angeles International.

Moving passengers is one thing...moving cargo is another. And among the world's top 10 container ports only one American city is listed--Los Angeles/Long Beach at #5. Singapore is #1, followed by Hong Kong, Shanghai, and Shenzhen (China).

Challenging Cruise Season Bodes Well For Bartering

Weak demands for Caribbean cruises/sailings are leading cruise companies to offer fire-sale discounts. Thus, trips on trade will be more readily available due to the changing conditions. (Check with your barter company for availabilities.)

The Caribbean not only is the most popular cruise destination but it's where most first-time cruisers tend to sail. However, memories of last year's brutal hurricane season along with concerns about cruise safety--due to some bizarre cruise-ship incidents recently--have spooked travelers.

Top 


From the desk of Bob Meyer...04/11/06

Wallach Says Commercial Barter Industry Hasn't Embraced Enormous Opportunity Available

Talked with Dave Wallach last week, and I'm happy to report he is feeling chipper and upbeat. Although he reminded me, "You know I'm supposed to be dead now!" (When diagnosed with lung cancer back in August the doctors were looking at 3 to 6 months.)

Wallach, the epitome of dedication and determination during his ValueCard ownership days is showing the same mettle today with his chemotherapy treatments.

He had just returned from the IRTA meeting in Amsterdam, as a director on the IRTA Global Board, and was as enthusiastic about the potential of the commercial barter industry today as he was back in the spring of 1998, when we spent two days together at his San Francisco office. At the time I was there to interview him for BarterNews magazine.

My nostalgic recollection of that visit in March, was the delightfully balmy weather that greeted me in one of the most spectacular and scenic cities in the world. As always, it was a pleasure talking with one of the industry's passionate pioneers. (Wallach had opened his doors in 1979, after four years of working for another bay area barter company.)

While Wallach admittedly started-out financially under-capitalized, he was always rich with vision and ambition. And when our interview turned to the barter business he became more animated as he energetically talked about a barter company's services being that of a business ecologist.

"Think about it," he pointed out, "we bring our members new customers to buy what's wasting away. And then, in turn, provide them with needed products and services--all a result of our efforts. And it's done through the use of our private currencies."

Wal noble service, after all it's no secret that nearly every business has extrant-family: Courier New"> Wallach believes before the industry can ever hope to reach the next level it must come to grips with this reality of needing to educate the business world. (P.S. He was preaching to the choir, as I agreed fully.)

Countertrade World Changing

I recently heard from an accomplished former Executive Vice President at United Technologies, he was the point man for the company's countertrade efforts back in the mid-to-late 1990s. A first-class guy, who, upon retirement, began a countertrade consultation service. For years he was on the go continually. Now, he reports, things are changing in the marketplace.

As a result, he hasn't done any offset/barter consulting for Corporate America in the past three years. When questioned about this, he responded that it was "due to lawyers who drive me crazy  with their holier than thou attitude."

He said he walked away from several potential contracts where he could have made considerable fees, plus been able to save the company many millions of dollars. Who loses? Not the lawyers who killed the deal...but rather the company stockholders, who never know such things occur.

U.S. Legislation Aims At Curbing Counterfeit Imports

A new bill, "Stop Counterfeiting In Manufactured Goods," was signed by President Bush on March 16. It will extend investigators current powers by giving them search and seizure rights over not just the products but the equipment used to manufacture and ship them. This closes the "import hole" that allowed counterfeiters to evade prosecution by separating the manufacture of products from the labeling process.

The law also makes it illegal to barter counterfeit goods, meaning that traffickers can no longer move counterfeit merchandise in return for any future service or goods.

The traffic of counterfeit goods is thought to be worth around $500 billion globally, affecting sectors as diverse as aerospace, automotive, electrical, pharmaceutical, and consumer goods.

Top


From the desk of Bob Meyer...03/21/06

The Changing Corporate Barter Marketplace

CVS/pharmacy with 5,400 stores in 37 states is the largest pharmacy retailer in America. They made headline news recently when it was announced that an informal inquiry by the Securities and Exchange Commission (SEC) was looking into how the company accounted for a barter transaction in 2000.

In short, CVS exchanged plush toys and received $42.5 million in trade credits. CVS also made a cash payment of $12.5 million to the barter company.

What comes into play here with the SEC, is the question of recognition, i.e. how the trade credits should have been valued on the company's books. This subject was addressed in November 1993, when the Financial Accounting Standards Board (FASB) published Issue No. 93-11, "Accounting for Barter Transactions Involving Barter Credits."

In 1994, we hired an expert CPA and former FASB board member to write a concise report for publication in BarterNews. We paid him a five-figure check for his critique on the new ruling. (The sum of his concise 8-page report is included in our FastStart II Corporate Barter Program.)

There are several factors that come into play when accounting for barter transactions involving corporate barter credits, too numerous to cover here.

But the point is that this information is available, and the CVS executives may have failed to do their homework before accepting $42.5 million in barter credits. In which case they would lack an understanding of how the barter credits should have been "booked" and subsequently used. The two executives responsible for those decisions have recently resigned.

FASB's ruling was one issue that brought change to the corporate barter industry...an industry that reached its zenith, in my opinion, back in the early 1990s.

I say that because in February of 1991 IRTA's Corporate Trade Council hosted the second annual spring meeting and conference on corporate barter. Over 100 members of the commercial barter community met at the New York Hilton. It was an impressive group of barter specialists, and an exciting time as the industry looked forward to unprecedented growth in the corporate sector.

Keynote speaker Moreton Binn's talk was titled, "Welcome to 1991--Year of the Miracle." Binn reviewed his experiences with the barter industry of the ‘80s and then emphasized the need for expansion overseas. Two years later FASB's ruling went into effect. And IRTA's Corporate Trade Council, established in 1990 and very active for several years, slowly lost momentum and is no longer in operation.

In addition to FASB's EITF 93-11 ruling, which altered the rules of corporate trade, other factors have affected the corporate barter arena. They include the Sarbanes-Oxley Act passed by Congress that tightened corporate governance procedures; the emergence of the Internet with the online liquidators and auctions, and a proliferation of outlet stores for manufacturers of all types to move excess merchandise. Plus there is the industry's fulfillment challenges and capabilities.

Caution Is Good Advice When Trading Outside Of Your Realm

When the Gemological Institute of America (GIA) recently fired four employees for violating the group's code of ethics, which prohibits contact between employees and clients and the exchange of gifts, it brought back memories of the early 1980s when bartering gemstones became quite popular as a trading currency.

Back then the trading was primarily done on a 1:1 basis, (often at the Zander Board meetings which were held in various cities) rather than through barter exchanges. It was a time to be very careful, as gemstone appraisals were handled in a rather unprofessional, even slipshod manner. The operative phrase was "buyer beware."

BarterNews published a series of articles in four consecutive issues, beginning with Issue #8. The author and gemstone expert was Paul Durand, who also had 30-years experience as an gemcutter. His contrarian thinking provided our readers with advice and knowledge on the little understood subject of gems. And hopefully saved some of our readers from making costly mistakes.

Top


From the desk of Bob Meyer...03/14/06

It Would Be Interesting To Know

Australia's Tourism Ministry plans to spend the equivalent of $135 million over the next 2-1/2 years promoting the fresh tag-line, "So Where the Bloody Hell Are You?" It is set to start airing in commercials this week on major U.S. television networks.

The old slogan, "See Australia in a Different Light," wasn't doing the trick so the Ministry spent $4.6 million to hire M&C Saatchi to conduct focus groups for six months. What the ad agency found is that people like Australia not so much for Australia but for the Australians who are friendly, genuine and unpretentious. Australia is a welcoming nation!

It would be interesting to determine how much of the considerable $135 million budget will be covered on a bartered basis. I ask that question because years ago, back in 1986, George Stergiou from Canberra had contacted me and indicated that he was interested in helping Australia's Tourism Ministry promote travel to their country.

At the time, he wanted to trade with a large media company in the U.S. where various travel accommodations in Australia would be exchanged for advertising. After many hours of phone calls and faxes, nothing ever materialized.

Later that same year Stergiou came to Los Angeles, and we had a chance to spend some time together. While here, he subsequently made a visit to M.J. (Mac) McConnell, one of our industry's top salesmen and the founder of Business Exchange (BX). Before Stergiou left town he was designated BX's "man in Australia," as reported in issue #12 of BarterNews on page 31.

The Biggest, Best & Brightest Barter

The latest example of the ubiquitousness of barter centers on Liberty Media Corporation. They firm wants to barter a portion of its 4% stake in Time Warner (valued at about $3.1 billion) for operating assets that may include the Atlanta Braves baseball team.

The Englewood (CO)-based Liberty Media is looking both to unwind its stakes in companies such as Time Warner, Sprint Nextel, and Motorola in a tax-efficient manner and to beef-up its roster of operating assets. The exchanging stock for an asset could facilitate a tax-efficient monetization for Liberty Media.

Google Embracing Barter To Settle Ad Lawsuit

A settlement by Google in response to the class-action lawsuit on behalf of all advertisers on its site, filed by Lane's Gifts & Collectibles, has been proposed. Google has agreed to pay up to $90 million, with much of the payment in the form of barter. Advertisers who may have been the victim of "click" fraud will receive credits toward ads on its system.

(The $90 million translates into less than 1% of Google's $11.2 billion revenue during the past four years.)

Traffic News Likes Barter, Too

Provider of real-time traffic information, Traffic.com has secured a multi-year contract renewal with Emmis Communications. Traffic will provide Emmis with content for their radio stations in New York City, Chicago, Los Angeles, Phoenix, St. Louis, Indianapolis, and Austin markets. In exchange it will receive advertising space in the Emmis radio network.

Clever Location For One's Message

Man's creativity never ceases to amaze. We've seen ads appearing on spaces as diverse as men's urinals, food trays in sports stadiums, and even dry-cleaner bags. Here's the latest...

Advertising is being placed around electrical outlets in the corners of the Indianapolis International Airport. Ninety two-foot stickers are found around these outlets in the airport's departure lounges and eating areas, emblazoned with the J.P. Morgan Chase name, logo and message.

The message reads, "This outlet works, now you can too." Also highlighted are either the e-mail address or a local phone number for Chase's commercial-banking unit, which targets businesses doing between $10 million and $500 million in annual revenue.

Top


From the desk of Bob Meyer...03/07/06

These are exciting times, consider that...

Historically, it used to take 1,000 years for civilization's standard-of-living to double. Yet in the last 80 years we've seen an unbelievable quadrupling in our standard-of-living! What's the reason for this stunning occurrence?

I believe it's shared ideas, innnovations and technology. Almost every region of the planet is simultaneously expanding, in addition there's a growing receptiveness to democratic capitalism.

Millions now cooperate and gladly provide goods and services to one another in an incredibly complex web of commercial transactions. Given today's technology explosion and growing global cooperativeness, the best is yet to come. A bridge is rapidly being built to take us from an industrial-based society to an informational-based one.

This means that future trade success (both in the cash and barter arenas) will depend on having both access to information and the ability to utilization that information.

As the commercial barter industry continues growing and working cooperatively together, we will see better and faster fulfillment capability...enabling advancement toward achieving the enormous potential for trading possibilities.

Hyping Global Barter Figures

However, we're not there yet. Which is why it's disconcerting to see the absurd numbers one barter company used recently when sending out a press release. It claimed that the combined global barter and community-currency systems are a $14 trillion market. Such a statement is simply ludicrous, as that figure is one-third (33%) of the world's gross domestic product!

Changes Coming For Bartercard USA

Bartercard International has sent a letter to all the Bartercard USA members, informing them of current changes within the company. The firm has taken certain legal steps necessary for reorganizing, and are actively seeking a new licensee to operate the Bartercard license for the United States.

Top


From the desk of Bob Meyer...02/28/06

This past week I've been communicating, via e-mail and phone, with a company that's located in a LDC (lesser developed country).

Experiencing, second-hand, the effort they must expend and routinely face to secure a simple purchase of a product, once again reinforces how fortunate those of us are who live and work in a more developed country. It's certainly something we generally take for granted.

Because of our considerable infrastructure, technological advancements, and grounding in capitalism we can accomplish so much more within the same time-frame.

I admire the tenacity of these entrepreneurs who must struggle continually. By doing so they are providing a valuable piece of the groundwork that will help their country move forward, from a business perspective, in the years ahead.

The Message In Disney's Experiences

The Walt Disney Co., an icon of mainstream America, is going against the grain of conventional business strategy this spring as it will stop distributing their 80-page catalog that has filled the mailboxes of tens of millions of households for the past decade. Instead it is embarking on a solely electronic initiative--pushing its products via the Internet.

The decision was made after the recent holiday season, wherein Disney spent $9 million to mail 15 million catalogs and then experienced a 45% drop in phone orders. At the same time customers responding to their online marketing efforts skyrocketed.

Disney won't stop using print materials altogether, but rather than producing and sending a weighty catalog they will save a pile of money by mailing out a postcard or invitation which will be used to drive traffic online.

How Barter Became An Integral Part Of The Olympic Games

The Olympic logo of five interlocking rings represents the union of the five continents and the meeting of athletes from around the world at the Olympic Games. In addition, by staging the games every two years (alternating between the winter events and the summer events) it offers the world an opportunity to observe man's many similarities and the hope for a more united world.

Today eleven major corporations, ranging from McDonald's and Coca-Cola to Chinese computer manufacturer Lenovo and Canadian insurer Manulife, are paying $80 million each to be top-tier Olympic sponsors from 2005 through 2008. A large part of the payment is through barter, i.e. payment in kind, because the Olympic Committee needs an enormous amount of goods and services to stage the 16-day global event.

These in-kind barter payments were first introduced in the 1984 Summer Games in Los Angeles, when Peter Ueberroth was the young and dynamic U.S. Olympic Executive Director. In the book he authored, Made in America, he chronicled the use of barter and how he traded the licensing rights to the Olympic logo for $116 million in needed goods and services.

Because of his trading savviness, the ‘84 Games turned a phenomenal profit of $222 million which was subsequently used to fund amateur athletes nationwide. But it was his barter strategy that forever changed how sponsors would handle the payments for licensing rights. And both parties benefitted...the Olympics get what they need and the sponsors appreciate the economics of in-kind payments.

Business People Love Barter--It's A Proven Business Tool

There are many reasons for loving the barter technique. But one that's seldom mentioned is the insurance it provides against unexpected downturns. In the financial arena, for example, the most common insurance derivative is a swap wherein two parties exchange portions of their risk as a hedge against failure.

A good illustration of this occurred when movie producer George Lucas bartered a 1% share of the profits in his yet to be released Star Wars for a 1% share in John Milius' surfing film, Big Wednesday. They bartered because it provided a safety net...neither producer was certain what his movie's future earnings would be.

Although Big Wednesday proved to be a big bust, Milius' small share of Star Wars netted him more than $300,000. Lucas, of course, made less money on the deal, but it could just as easily have gone the other way. And on many levels it does.

In the case of investment bankers the purpose of a typical swap between two client companies would be for added cash-flow security. It might involve a company exchanging 5% - 10% of its annual cash flow with that of a similar-sized company in another region of the world. Such an arrangement insulates each company from the financial volatility of its local market, interest rates, and currency.

Top


From the desk of Bob Meyer...02/21/06

Accreditation & Training Programs Going Strong

Back in 1989 the International Reciprocal Trade Association (IRTA) noted that people in the barter industry felt that with the growth of the industry, and the increasing sophistication of the business, there was a need for an accreditation program for barter professionals.

IRTA, under the direction of board member Steve Webster (www.alliancebarter.com), explored whether such a program should be developed and implemented. One that would identify and acknowledge those barter professionals who met the standards a quality accreditation program would establish.

Subsequently such a program was implemented. And I'm pleased to report interest in the program is still intact--as noted below in a subsequent article. Similarly, the National Association of Trade Exchanges (NATE) offers an accreditation program under the professionalism of Fran Crumpton.

Although these programs are for people now working within the barter industry, for newcomers entering the barter business a comprehensive training program is available from Tom McDowell (www.BarterTrainer.com).

Online Technology Available

And as reported February 7, Gary Lasater (www.evalues.net) offers online accounting and processing services for barter companies wishing to focus their energies on marketing and trade brokering.

What Are They Doing Now?

Paul Suplizio, IRTA's first Executive Director (16 years) and a member of the IRTA Hall of Fame, is busy these days in the venture capital arena. He and his partners arrange face-to-face meetings with the senior people of reputable private equity sources. Any firm of significant size in business 5 or more years--regardless of geography--which seeks capital for expansion, private placement of stock, sale of their company or ownership interest, or for capitalizing a new branch or department can contact Paul Suplizio or Allen Lewin at (703) 820-7707 or e-mail: wotc@cox.net.

Top


From the desk of Bob Meyer...02/14/06

I received a note from Michael Touma, Managing Director of BBX in Hornsby, Australia, regarding our story last week on the availability of automobile fuel in Australia.

Gooday Bob,

Just read your latest Tuesday Report, as always good reading. However, wanted to let you know that BBX has for the past 7 years offered fuel on full trade to select members.

BBX has currently over 100 Volume Plus petrol stations offering members petrol, diesel and other fuels on full trade.

I just wanted to set the record straight.

Michael Touma

Managing Director

BBX Head Office

Email: mt@ebbx.com

URL: www.ebbx.com

Editor's note: BBX Holdings Ltd. was founded in 1993, serving more than 4,500 customers representing 8,000 cardholders in Australia and New Zealand. BBX is the first and only publicly listed barter company on the Australian Stock Exchange.

Starbucks Strikes Winning Barter Deal...

Starbucks is going Hollywood and a barter deal promises to take their coffee to another level. Teaming with film studio Lions Gate, Starbucks will get product placement in an upcoming movie as well as an ownership position in the film. Although Starbucks won't be making any financial investment, they've agreed to barter their distribution clout by offering the film DVDs at the thousands of Starbuck locations across the country.

Google Uses SmartBarter Technology...

Following up on our article regarding Google's push to become a one-stop media ad-buying platform (January 31 issue): The FTC has OK'd Google's purchase of dMarc Broadcasting, which through their SmartBarter technology moves unsold radio station inventory after the logs are closed each day. Arbitron-rated stations can barter their unsold advertising time to painlessly acquire new equipment for the station from dMarc.

Through the SmartBarter program dMarc determines, based on the stations ratings, the number of daily spots needed to cover the purchase of equipment over a three-year period. DMarc also provides stations with a buyout option so they can declare the equipment as an asset and depreciate it.

Congratulations to Bartercard...

It was fifteen years ago this month that Wayne Sharpe, Andrew Federowsky, and Brian Hall came together and formed Bartercard in Queensland, Australia. What a remarkable journey it's been as they've ambitiously expanded around the globe signing up client after client. Today the 70,000 cardholders are reportedly trading products and services worth AUD$1.2 billion annually.

Bartercard has built an international infrastructure which promises to pay large dividends for the company as the global business community increasingly continues its barter interactions. Bartercard recently became a publicly-traded company on the London Stock Exchange (BRTN LN).

Bartercard has just finalized the sale of a license for Turkey, see Tuesday Report of 2/14/06 - Click here  

Top


From the desk of Bob Meyer...02/07/06

Last week I talked with one of the top exchange owners in the country. He told me he spent almost four hours going over the various sections of the BarterNews.com web site, reading articles and so on.

And conversely, another well-respected person in the industry candidly admitted to me that she had never visited the web site. Two examples, obviously, at extreme ends of the spectrum, but indicative of the world we live in today where so much is happening.

We hope everyone, everywhere will check in on a regular basis as we report on the news and happenings in the world of barter. As you can see by the story on the bartering of automobile fuel, below, exciting events are occurring in the world of barter!

Also, received this note via e-mail...

"I've been running into situations over my 25 years in the barter business that could have been easily avoided by having been forewarned about the people or organizations reneging on debt repayment, not fulfilling deals, etc.

"I'm not sure there is an organized element in either NATE or IRTA to share information regarding deadbeat accounts, vendors or even other exchanges (barter companies). And I do not expect your publication to be the clearinghouse for such information.

"To your knowledge, has anyone else expressed a similar interest in establishing some kind of roundtable (on line?) forum to discuss these types of problems?

"Would appreciate your comments."

Kind regards,
Steve Singer, Sr. VP
National Commerce Exchange
Jericho, NY 11753

Dear Steve:

I've had people within the industry suggest that BarterNews maintain such "a master list." Others have suggested that IRTA and NATE do so. I don't see any of these entities moving forward with such a service. Nor do I envision any online roundtable exchange taking place, because of our highly litigious society. What will continue, however, will be the sharing of information among peers...one of the many benefits of belonging to a national association.

Most exchanges and big traders will have their "Don't work with these traders!" list, so it really involves taking the time and making the effort to create your own master list.

Whether you're a trade exchange operator or an independent trader, if you haven't done business with someone it's prudent to check them out and ask for several referrals...then call the referrals! If the referrals are not entities you either know or trust, then seriously consider walking away.

Other options might include dealing with them by demanding upfront performance, or opening up an escrow account wherein the exchange takes place upon completion by both entities.

From my perspective, there are two reasons why unscrupulous business-people (whether using cash or barter) exist: Greed--which is a common human characteristic, and slothfulness--being too lazy to pick up the phone and make some calls to check them out.

Top


 

about us | about b meyer | from the desk of  | contact us | issues | back issues | consulting services | entrepreneurs package FastStart | order | banner ads | first time visitors | travel section | media section | trade exchange section | corporate barter section | countertrade section | secondary capital sectionreal estate section | trade exchange news 2006 | trade exchange news 2005 | community barter section | restaurant & entertainment section | USA barter companies | global barter companies | sponsors | tuesday report | 2014 Tuesday Reports | 2013 Tuesday Reports | 2012 Tuesday Reports | 2011 Tuesday Reports | 2010 Tuesday Reports | 2009 Tuesday Reports | 2008 Tuesday Reports | 2007 Tuesday Reports | 2006 Tuesday Reports | 2005 Tuesday Reports | 2004 Tuesday Reports | 2003 Tuesday Reports | 2002 Tuesday Reports | 2001 Tuesday Reports | 2000 Tuesday Reports | 1999 Tuesday Reports
Site Architecture & Hosting by XENET