Study: Dot-coma easing as closures slow
Aug 3, 2001
Only 32 Internet companies folded in July, representing the best month for dot-coms since September, according to research firm Webmergers.com.
The San Francisco-based company that tracks mergers, shutdowns and bankruptcies in the Internet sector reported 30% fewer shutdowns and bankruptcies last month than in June.
The Webmergers data coincides with other recent reports suggesting that Internet company layoffs seem to have plateaued. The reports, considered on the whole, lead to the conclusion that the dot-com bubble has been fully deflated. Surviving online companies could be poised for a comeback.
"The weakest have been shaken out," Webmergers.com president Tim Miller said. "The remaining could flourish now that some competition has been winnowed out."
The most significant closure in July was online grocer Webvan Group. Online radio concern eYada has the distinction of being the lone content play to fold in July.
"It seems so many other high-cost content companies have already merged or have been taken out," Miller said.
The remaining content sites have been migrating to a pay model, whereas before they were supported by online advertising. "The jury is still out on that strategy," Miller said.
According to Webmergers, there are 7,000-10,000 "substantial" Internet companies, meaning they have received formal investment money. Webmergers calculates that 6%-8% substantial Internet companies have already shut down. At least 592 have shuttered since January 2000.
"Every tech cycle has had a boom and bust period, and there's no reason the Internet should have been different," Miller said. "Usually, the bust is followed by a return to rational growth."
Other information from the latest Webmergers.com report:
oSince January 2000, February 2001 was the worst month for dot-coms, with 60 folding.
oBuyers spent almost $3 billion to acquire 99 Internet companies last month, below June's $6 billion but on par with May and April.
oIn the first seven months of this year, 367 Internet companies closed, compared with 225 all of last year.
&summary=Article%20about%20Study: Dot-coma easing as closures slowThe San Francisco-based company that tracks mergers, shutdowns and bankruptcies in the Internet sector reported 30% fewer shutdowns and bankruptcies last month than in June.
The Webmergers data coincides with other recent reports suggesting that Internet company layoffs seem to have plateaued. The reports, considered on the whole, lead to the conclusion that the dot-com bubble has been fully deflated. Surviving online companies could be poised for a comeback.
"The weakest have been shaken out," Webmergers.com president Tim Miller said. "The remaining could flourish now that some competition has been winnowed out."
The most significant closure in July was online grocer Webvan Group. Online radio concern eYada has the distinction of being the lone content play to fold in July.
"It seems so many other high-cost content companies have already merged or have been taken out," Miller said.
The remaining content sites have been migrating to a pay model, whereas before they were supported by online advertising. "The jury is still out on that strategy," Miller said.
According to Webmergers, there are 7,000-10,000 "substantial" Internet companies, meaning they have received formal investment money. Webmergers calculates that 6%-8% substantial Internet companies have already shut down. At least 592 have shuttered since January 2000.
"Every tech cycle has had a boom and bust period, and there's no reason the Internet should have been different," Miller said. "Usually, the bust is followed by a return to rational growth."
Other information from the latest Webmergers.com report:
oSince January 2000, February 2001 was the worst month for dot-coms, with 60 folding.
oBuyers spent almost $3 billion to acquire 99 Internet companies last month, below June's $6 billion but on par with May and April.
oIn the first seven months of this year, 367 Internet companies closed, compared with 225 all of last year.
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