Dot-coms become dot-bombs

Forty-nine dot-coms joined a growing list of dot-bombs in January and another 112 Internet companies were acquired at a cost of more than US$5 billion, according to a study released last month.

A drop in funding, such as from venture capital firms, caused the shutdowns of the likes of The Walt Disney Co.’s entertainment site, e-retailer Inc. and health site Inc., according to a report from Inc. Over US$1.5 billion had been invested in the companies that went under in January. Many of these companies are actively seeking to sell their assets, the report states.

The Internet sector saw more than two acquisitions for each funeral in January, according to Almost US$4 billion in merger-and-acquisition spending in January went to Internet infrastructure companies. That total includes Ariba Inc.’s acquisition of Agile Software Corp. for US$2.5 billion, according to the report.

Over US$600 million was spent to buy 60 Web-based companies in January, up from 57 acquisitions and US$3.7 billion during January 2000. The January 2001 figures show a decline in valuations and a falloff in the large deals that took place early last year before the Internet sector crisis, Webmergers said., in San Francisco, can be reached at

– IDG News Service

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