2002 was a difficult year for internet businesses in the US and a new report from Webmergers claims that little more than $23 billion was spent on acquisitions, a decline of 70% on the previous year.
While the number of transactions declined by just 15% last year, total spending by acquirers slipped from $78 billion to $23.3 billion, reflecting the falling value of web businesses. However, Webmergers identified a significant number of healthy deals which point to the fact that there is now a greater understanding of what is effective on the internet.
In particular, firms are keen to invest in infrastructure and certain segments of ecommerce. Websites which offer ‘soft’ services such as travel, employment, ticketing and financial products are regarded as having the most potential.