Many dot.com companies will find it harder to obtain financial backing than they did this time last year, however, money will be available for those better internet companies.
Investors will be demanding more proven success from a company before they are prepared to release their funds and that retail sites are the ones that are going to be the most difficult to attract investors to. Investors are said to still be interested in the technology sector, however more solid business models have to be demonstrated, with profitability already achieved or not too far away.
The accountancy firm KPMG released statistics identifying that the year 2000 was a bumper year for flotations on the London stock exchange, even though there was a collapse in dot.com share prices. 138 companies were floated on the London Stock Market in 2000, raising around £10.6bn, compared to 1999 when 70 companies raised £5.4bn
The market is certainly going to be very tough in the first six months of 2001. Hardware and infrastructure providers have been predicted as doing well, with content providers and e-tailers finding it almost impossible to succeed. It has also been predicted that 2001 will see lots of merger and acquisition activity, with dot.coms merging with traditional retailers.