At least 537 internet companies shut down or declared bankruptcy
in 2001, more than twice as many as in 2000 according to new
figures from Webmergers.com. M&A activity also declined. The
number of site deals was about half of those in 2000. In 2000,
there were 910 internet destinations acquired for about $90
billion, compared to 523 for $13.5 billion in 2001.
However, Webmergers.com's figures also show that the shutdown
rate is slowing dramatically. The fourth quarter of 2001 saw only
78 shutdowns compared to 135 in the same period last year.
December's "death rate" was less than half of that in December of
2000 and is the lowest since August 2000. Shutdowns peaked between
October 2000 and June 2001, an 11-month period that accounted for
nearly 75% of all shutdowns in the past two years.
More than two thirds of all shutdowns in the past two years
involved content or e-commerce properties, including entertainment
sites, on-line news providers, e-tailers and B2B marketplaces.
M&A activity began to recover towards the end of 2001. In
November, M&A activity was valued at $3.2 billion, up 60% from
the year low in September. In that month, 79 Internet properties
were acquired.
The firm considers that at most, ten percent of significant
internet companies have shut down or declared bankruptcy.
The research looked at mergers, acquisitions, bankruptcies and
shutdowns of "substantial" internet companies around the world -
defined as those that have received significant funding from
venture capitalists, angel investors or other formal sources.
