Fewer big mergers as market slows

With an uncertain market environment and a slowing economy in the US, 2001 will see fewer big mergers and acquisitions among high-tech companies, according to a report from PricewaterhouseCoopers. While the firm expects the boom in tech mergers and acquisitions to continue, it believes that companies will be choosier this year about the deals they make, and will focus more on moves that increase market share and cash flow in the near term.

Industry sectors such as networking, broadband, wireless, optical and semiconductors will continue to attract venture capital in 2001, but venture capitalists will be more cautious about investing in startup firms, PwC forecasts. The firm's report said that new companies seeking additional funding will need to present strong business plans to convince venture capitalists to invest.

Although dot-coms are expected to receive little help from investors this year, PcW's report predicts that interest in B2B will remain high, as companies seek to acquire technologies that will keep them close to their customers while also increasing opportunities for growthOpportunities abound for e-procurement servicesThe e-procurement services market is starting to make some noise. By the time 2004 rolls around it will be rearing, with worldwide opportunity generated from set-up services - which are consulting, implementation, and ongoing management of deployed solutions - close to $US13 billion, according to a report recently released by IDC. The researcher believes vendors themselves could play a large part in determining just how much this market booms.

Value-added services and vendors' creativity and flexibility to provide clients with a reasonably priced end-to-end procurement services solutions will determine the adoption rate of e-procurement.

According to IDC analysts, implementation services with large companies will provide vendors with the most lucrative opportunities. By the end of 2004, revenues from these services will account for approximately 50 per cent of the e-Procurement set-up services market. Revenues from e-Procurement consulting services will be the fastest growing, increasing at a compound annual growth rate (CAGR) of 62 per cent from 1999 to 2004, compared with 55 per cent CAGR for the entire market.

IDC also expects the proportion of business-to-business e-procurement outsourcing services to increase substantially through 2004. In 1999, just 5 per cent of B2B e-procurement services spending was on outsourcing. By 2004, this percentage will increase tenfold.

Medium-sized companies, and even some large ones, prefer not to make an up-front investment to acquire e-procurement applications and will choose e-procurement outsourcers instead. IDC believes most of the market's activity in the near future will be generated by the e-procurement of indirect goods but expects e-procurement of direct Look out for Web rage!

Poor search engines and information overload are causing Web rage among Internet users, according to a survey by Roper Starch Worldwide. The group's studies found that on average, users get angry and frustrated after 12 minutes of fruitless searching, although for seven per cent of respondents, it only takes three minutes before Web rage strikes.

Search engine Google currently covers 1.3 billion web pages. While this figure may seem high, it represents only 20 per cent of total capacity under the .com top level domain (TLD) alone. As new TLDs come into operation, the Web will get even more cluttered, RSW explained.

The overwhelming amount of information on the Web is turning people away from the medium and back to pre-Internet information resources, the survey found.

The vast majority (86 per cent) of those polled by RSW felt an efficient means of searching for information on the Web should be in place. Almost one-third of Internet users said they spent about two hours per week searching for the information they needed, while 71 per cent felt frustrated after searching, regardless of whether their search was successful or not.

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