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Dot com despair

The extent of the decline in the dot com market has been underlined by a report showing 435 global companies operating primarily...

The extent of the decline in the dot com market has been underlined by a report showing 435 global companies operating primarily over the Internet have shut down since the beginning of the year.

The report, by US research group Webmergers, makes grim reading for dot com companies and those involved in providing infrastructure services to that sector.

Webmergers, which tracks "substantial" Internet companies that have received significant amounts of venture capital investment, said that 55 Internet companies closed in April, compared with only one during the same period last year when the dot com sector was booming.

The company suggested the report showed there was no let-up in the ongoing decline in the dot com sector. "April's toll dampens hopes that the dot com carnage is slowing. Those hopes were raised in March, which at the last day of the month logged only 41 Internet casualties, a significant decline from February."

The report also claimed that the type of Internet companies going out of business was beginning to change, with players in areas such as ISP, ASP and Internet services beginning to be affected by the downturn.

"April claimed the lives of nine Internet professional services firms and seven providers of dial-up access, DLS and other access-related services. April also saw, for the first time, a handful of shutdowns in the application service provider sector," the report said.

For those resellers and services companies providing hardware, integration, infrastructure and consultancy to the dot com sector, the Webmergers report could signal the end of that particular gravy train.

Dominic Hall

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