August 6, 2001, 12:00 AM

Dot-com deaths eased in July, says Webmergers

The death of Internet companies slowed in July to 32, its lowest level since September, reports

The death of Internet companies slowed in July to its lowest level since last September, reports, 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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