Dot-Com Failures Pass 700
Yesterday's hockey sticks of growth have become broomsticks of doom this Halloween as the number of dot-coms in the dustbin surpassed 700 for the first time.Yesterdays hockey sticks of growth have become broomsticks of doom this Halloween as the number of dot-coms in the dustbin surpassed 700 for the first time. For Internet start-ups still whistling past the graveyard, October offered a ray of hope as the number of business failures fell to 33, the second lowest level since September 2000, when 22 bit the dust. But dont reach for the party hats just yet. The October toll was higher than the previous months and may indicate some year-end house cleaning is on the way.
"We have been predicting that a combination of tough economic conditions (exacerbated by the Sept. 11 tragedy) and year-end housecleaning by investors may lead to a modest short-term increase in the sectors pain in the final months of the year," according to the firm that tracks the data, Webmergers.com. "The modest increase in October shutdowns - and the significant increase in B2C shutdowns - may herald the beginning of that cleanup process."
- The number of consumer-oriented shutdowns increased significantly in October from previous months, in part because of a spate of online radio and entertainment shutdowns.
- Assets of troubled companies are beginning to move through the liquidation system; acquirers spent more than $2 billion to acquire assets of 162 Internet companies in the first nine months of this year.
- California accounts for 30 percent of shuttered Internet companies.