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In The Press 

Barter Meets the New Economy
By Allen Plummer
Small Business Computing, November 2000

. . . Another site, BarterItOnline.com, caters to businesses trying to make the leap into e-commerce. The site offers an equity trading feature where companies can trade stock options for for services and goods, and its Barter Talent area allows new-economy professionals--such as site designers, programmers, and business plan developers--to offer their services in return for products and services they may need. In addition, BarterItOnline offers a program where companies can use their barter dollars as employee rewards, bonuses, and incentives.
  . . . Even the barter sites don't market themselves as the perfect solution for every need. A key thing to remember is, don't barter what you can sell for cash. "Bartering can be great for businesses," says BarterItOnline.com's Richard Cravatts, "but it should be used as a way of avoiding losses, downtime, and excess inventories. Think of it as an enhancement to doing business, not a substitute for the old way." Don't go over board: You may find yourself bartering items that would create a higher profit in cash.

Man Does Not Live by Barter Alone
By Eric Young
The Industry Standard, November 13, 2000

. . . Despite these challenges, a number of companies are competing with Bigvine to build barter exchanges on the Internet. Firms like BarterItOnline, BarterNet, BarterTrust and Ubarter have set up online barter marketplaces aimed at small companies that are looking to exchange products and services instead of paying cash for them. Even more players are expected on the scene. BarterCard, a company based in Australia that operates barter exchanges in nine countries, plans to launch operations in the United States next year.

Like Bigvine, these companies have their own currency that customers trade within their exchange as payment. A typical online transaction works this way: A dentist will become a member of a barter exchange and buy a CD player from an electronics store that also participates in the exchange. The electronics store, with the barter currency it earned for the CD player, can now pay for some signage from a local sign company that is a member in the exchange. Internet exchanges make their money by taking a fee, typically around 5 percent, that is charged to the credit cards of both the buyer and the seller.

It's curious that barter should get so much attention from Internet startups. There are many shortcomings to barter exchanges, and they're magnified when you consider how convenient it is to use money. Historically, cash economies have flourished – and barter economies haven't – because cash provides one medium of exchange that is uniformly accepted, says Robert Laurent, an economics professor at the Illinois Institute of Technology and a former economist at the Federal Reserve Bank of Chicago. Bartering can be problematic because it requires you to find someone willing to trade a good or service when and where you want it. Such matchmaking can be difficult and time consuming. "Without money, you'll have a hell of a time running a complex society," Laurent says.

The proposed benefit of moving a barter exchange to the Internet is that the Web provides barterers with access to hundreds or thousands of other barterers who they would not have been exposed to. The Internet is great for linking parties that don't know each other. Consider, for instance, the success of auctions via eBay (EBAY) . For online barter exchanges to succeed, they have to attract a wide range of participants who will constantly use the service – just as eBay attracts millions to its auctions. Otherwise a barter exchange is going to have trouble pairing up traders.