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Dot.com failure rates fall 73% in 2002

The number of shutdowns and bankruptcies of dot.com companies has fallen 73% in the first half of 2002, the US-based research firm Webmergers.com. reports. According to the released figures, at least 93 internet companies filed for bankruptcy or shut down in the first 6 months of 2002. The corresponding number for the same period last year was 345.08 Jul 2002

June 2002 had 13 shutdowns, and was the sixth consecutive month in which the number of shutdowns was less than 20. The Webmergers.com report points out that since the last half of 2000, when the internet shakeout was at its peak, at least 862 dot.coms have failed. The failure rate was 44% per month.

Of the 862 failed dot.coms, 43% were B2C e-commerce companies and 25% were content companies. The corresponding percentage for infrastructure, internet access and professional services companies was 16%, 10% and 6% respectively.

Most companies named in the shutdown list for the first half of 2002 are infrastructure and internet service providers, and also providers of dial-up and broadband internet access services.

The report claims that the figures are a sign of revival of the sector, and adds that most people prefer to forget tales of collapsing dot.coms. Webmasters.com and the University of Maryland have launched an on-line archive that aims to create a permanent record of the dot.com era. The web site invites executives, employees and investors to submit business plans and related documents of both failed and successful dot.coms.

According to the site, these plans lay out the assumptions and strategies of internet entrepreneurs and will enable entrepreneurs and researchers to conduct both qualitative and quantitative research.

More than 400 individuals have already registered with the web site, which claims that it will protect the privacy of all contributors and that will provide them with control over how and when the documents are made accessible.

See: www.businessplanarchive.org.

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