Internet Death Rate Levels Off

The Internet-business death rate is stabilizing, according to a report from research firm Webmergers.com, with 53 Internet companies shutting their doors or declaring bankruptcy in June. That figure is holding steady from 54 companies in May and 55 in April.

Webmergers.com president Tim Miller says the plateau may be due to the effect of two overlapping waves of shutdowns, as the last of the weak consumer-oriented companies gives up the ghost, and business-to-business casualties increase. Business-to-consumer companies have accounted for 49% of this year's fatalities, compared with 73% last year; B-to-B has made up 33%, compared with 22% in 2000.

Miller says he's starting to see a gradual decline in the death rate, with more closings at the beginning of June than at the end, but he figures it will be a while before the plague passes. "The worst is over for the B-to-C sector, but it's far from done," says Miller, "and most people expect that B-to-B is going to shake out for a while."

But while the worst may be past us, there's no question that 2001 has been a rough year. According to the report, 330 companies have gone belly up in 2001 so far, compared with 225 in all of 2000. That's nine times as many shutdowns in the first half of 2001 than in the first half of 2000.

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