July 3, 2001, 12:00 AM

Death rate for dot-com retailers slows

The focus of dot-com shutdowns has shifted toward B2B Internet companies, says Webmergers.com

The number of Internet companies that closed in June held steady with May; at 53, June shutdowns matched May’s 54 shutdowns almost exactly, suggesting that the death rate for dot-coms may be reaching a plateau, according to Webmergers.com, a broker of Internet properties. Webmergers’ numbers also indicate that the wave of closures is moving away from b2c properties and towards those that address a b2b or general audience. While b2c companies made up 73% of all dot-coms closures last year, they accounted for only 49% of closures in the first six months of this year. Shutdowns are migrating from b2c e-commerce companies to business-oriented sectors such as Internet consulting firms, infrastructure creators and providers of Internet access. Closures of e-commerce properties, one category of b2c sites, declined from 54% of all shutdowns last year to 40% in the first six months of 2001.

The migration of shutdowns away from e-commerce is particularly evident among b2c e-retailers, noted Tim Miller, Webmergers president. In the first half of this year only 26% of all shutdowns involved b2c e-commerce companies. Consumer-oriented companies accounted for 65% of all e-commerce shutdowns of any kind. By contrast, for the full year last year, b2c-oriented e-commerce sites accounted for 43% of all shutdowns or 80% of all e-commerce site deaths. Most of these b2c properties were online retailers.

Though the failure rate of b2c e-commerce sites is slowing, the sustained numbers in dot-com fatalities overall in the past three months is in part a result of two overlapping waves of dot-com shakeout, says Miler. “The tail end of the B2C shakeout is overlapping with the early stages of the shakeout in more business-oriented companies,” says Miller.


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