The demise of Webvan Group Inc. is an old story at this point, but a new survey shows that many don't believe it will be the last saga concerning a failing Internet company--only the latest. According to a survey released Monday by market research firm Feldman Communications Inc., 64% of its 100 respondents believe dot-com failures and layoffs will continue over the next six to 12 months.
Only one in six respondents believe the worst is over for Internet companies. The respondents, which included tech executives, business owners, and analysts, blamed the dot-com bust on a failure to recognize customer needs, excessive funding for marginal concepts, and a gold-rush mentality.
There is some optimism about the overall economy, however, says Feldman president Paul Feldman. Seventy-four percent of the respondents do not believe the dot-com fallout will spark a U.S. recession, and 83% do not believe the global economy will be affected. "The numbers are very strong that the people in the community believe these problems will not ripple out to the rest of the economy," says Feldman.
Last week, outplacement firm Challenger, Grey and Christmas released the July figures for dot-com job cuts, and though the 8,697 reported for the month is a nine-month low, president John Challenger agrees with the Feldman survey. "Though there are not as many companies out there, job cuts will continue as big cuts will hit companies acquired or condensed. The numbers will just be lower."