The death of Internet companies slowed in July to its lowest level since last September, reports Webmergers.com, which tracks M&A activity among dot-com companies. Webmergers said dot-com closures and bankruptcies worldwide totaled 32 in July, compared with 58 in June. Webmergers says it’s likely a few more July closings will surface.
July's shutdowns bring the total number of dot-com casualties for 2001 to
367. The same seven-month period in 2000 saw 56 shutdowns.
B2C companies declined sharply as a percentage of total shutdowns in 2001, Webmergers reports. In the first seven months of this year, B2C companies comprised 48% of shutdowns vs. 73% in all of last year.
“The dramatic decline in shutdowns in July is consistent with our
observation last month that Internet rationalization has reached a plateau
and may have run most of its course,” Webmergers said. “More specifically, our data suggests that the tail-end of the business-to-consumer shakeout is
overlapping with the early to middle stages of the shakeout in such
business-to-business sectors as infrastructure and professional
services.”
Webmergers estimates there are 7,000 to 10,000 “substantial” Internet companies - those that have received some sort of formal funding from venture capitalists, angel investors or other investors. By Webmergers’ numbers, the dot com death toll represents 6-8% of the total.
“The grim reaper's move away from consumer-oriented properties is
particularly pronounced for B2C e-tailers,” Webmergers said. “In the first seven months of this year, only 26% of all shutdowns involved consumer-oriented
e-commerce companies as compared with last year when they tallied 43%
of all shutdowns.”
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