The number of internet companies going under is increasing, with 55
shutdowns last month, up from 44 in March, according to the latest
figures from research company Webmergers.com. By comparison, only
one substantial dot.com went under in April 2000, the e-tailer
Violet.com.
Webmergers' research tracks only shutdowns and bankruptcies of
"substantial" internet companies that have received significant
funding from venture capitalists, angel investors or other formal
sources.
Other statistics from Webmergers show that at least 435 internet
companies have folded since January 2000 and nearly half of all
shutdowns in the past 16 months have taken place in the past four
months.
Although e-commerce-related companies still account for nearly
half of all shutdowns to date, the internet shakeout is beginning
to infect new sectors such as internet consulting and internet
access. April saw the demise of nine internet professional services
firms and seven providers of dial-up access and other
access-related services. April also saw, for the first time, a
handful of shutdowns in the application service provider (ASP)
sector.
Merger and acquisition activity has also declined. Buyers spent
almost $2.6 billion to acquire 115 internet companies in April,
compared with about 143 acquisitions for about $5 billion in
March.
