Weston, Mass., March 21 (dbusiness.com) -- According to Richard Cravatts, online auctioning may be the most-talked-about business phenomenon recently, but bartering for goods is at least as profitable.

Cravatts has launched a start-up service for businesses to trade for goods called BarterItOnline.com. Using this service, businesses can exchange goods and services without spending cash.

While the company is in its earliest stages . . . the Web site is online and has seasoned employees committed to the venture.

"With the promise of the Internet...the potential for business is enormous," said Cravatts, who is currently seeking a round of venture capital financing. Cravatts says the market for bartering services offline is currently $16 billion annually.

And there is room in the market for more than one electronic bartering company, said Cravatts, referring to BarterTrust.com, a well-stocked business-to-business bartering exchange backed by Draper Fisher Jurvetson and Deutsche Banc Alex. Brown, among others.

Cravatts, as publisher of Publications Management Company, makes playbills for local theatre companies. He has also helped launch several Boston magazines, such as Greater Boston Restaurant & Wine Review. He was publications director at Harvard University's Kennedy School of Government, and a director of public relations at Harvard's School of Public Health in the 1970s.

The company has enlisted Ira Jackson as Board Chairman. Jackson has been an executive vice president of BankBoston for 12 years, and before that was Commissioner of Revenue for the State of Massachusetts. He was also an Associate Dean of Harvard's Kennedy School of Government.

The company also has a chief financial officer, Web designer and a director of barter rewards program.

Bartering is an ancient system of trading; however, only select businesses participate nowadays--an estimated 400,000 in the United States, said Cravatts. In fact, while some bartering exchanges exist locally, such as New England Trade in Malden, other companies, like the weekly news magazine The Boston Phoenix, employ their own directors in-house to barter for goods with clients.

Media and advertising companies have always traditionally been interested in bartering, said Cravatts.

BarterItOnline.com will centralize bartering through an electronic commerce model. Members won't have to directly trade with one another in order to participate, said Cravatts.

The way it works is that businesses registered on BarterItOnline.com would exchange their goods and services in lieu of cash. For example, a magazine might give away advertising space in exchange for items such as office furniture, art supplies or some other needed item that BarterItOnline.com can supply through its network.

Each time the magazine barters for an item, it gives up free advertising space, which is debited by BarterItOnline.com by assigning an electronic cash value.

If Cravatts attracts an investor to his idea, he will build out an electronic commerce site using a more robust application than the Microsoft Office software he is currently using, he said.

Cravatts said he charges a total of eight percent, half in cash, half in goods, the value of each exchange made through his Web site.

A target market for selling his bartering services, said Cravatts, are Internet start-up companies short on cash, but with a need for Web designers, staff, or other technological services.

In addition to BarterTrust.com, his company will likely compete with other established local bartering exchanges, such as New England Trade in Malden.

According to Gary Oshry, NE Trade's president, electronic commerce-based bartering exchanges present a challenge to his business, but can never duplicate one-on-one services provided by live brokers, of which he employs three.