|
Monday April 2 7:55 PM ET - updated 10:46 AM ET Apr 3 Internet Consultancies: End of An Industry? By Cyntia Barrera Diaz NEW YORK (Reuters) - With investment capital drying up, stock prices collapsing and established consulting players eating their lunch, the future for independent Internet consulting firms has never been bleaker. Members of this once hot sector, such as marchFIRST (NasdaqNM:MRCH - news), Viant (NasdaqNM:VIAN - news), Razorfish (NasdaqNM:RAZF - news) and Scient (NasdaqNM:SCNT - news), have been cutting jobs and closing offices as their stock prices fall. The best hope for some may be as bargain-basement takeovers, analysts said. ``I think what you are going to see is bigger full-line companies getting in the area, now that they can buy assets for pennies on the dollar,`` said Jim Dougherty, an analyst with Prudential Securities. ``Now that there have been so many layoffs, keeping skilled staff is not nearly as big a problem as it was a year ago,`` he said. ``The major advertising companies are going to be in this game one way or another.`` In the latest example of the sector`s woes, marchFIRST agreed on Friday to sell about two-thirds of its business and lay off 1,700 workers, or about 30 percent of its staff. Its shares, which resumed trading on Monday after a three-day halt, fell 33.3 percent to close at 3/32, over 99 percent below its year high of $35-1/2. The sale takes place a year after the $5.6 billion marriage between Whittman-Hart Inc., a systems integrator, and the USWeb/CKS consultancy that led to the creation of marchFIRST. ``The expertise that these guys had became quickly commoditized,`` said David Mahoney, an analyst with Wit SoundView, commenting on the waning of Internet consultancies. ``They were looking at buying or acquiring the customers and were working on much smaller point projects, less on the strategic side.`` MarchFIRST was just the last to join the list of Internet consultancies that have recently taken drastic measures in an effort to keep their businesses running. Viant Corp. said last week it was cutting its staff by 38 percent and warned of steeper-than-expected losses in the first quarter. The company`s shares fell 7.5 percent to close at $2-5/16, down 96 percent from its Dec. 1999 all-time high of $63-9/16. Three weeks ago, Razorfish Inc. announced more job cuts under a ``voluntary termination`` scheme that hit employees in its London, Boston and San Francisco offices. Its shares finished at 15/32 on Monday, just a fraction of its Feb. 14, 2000, high of $56-15/16. In the first week of March, Sapient Corp. (NasdaqNM:SAPE - news) of Cambridge, Massachusetts, changed its first quarter view to a loss per share instead of a profit, axed its work force by 20 percent and closed its Sydney, Australia office. Sapient`s shares closed at $7-9/16 on Monday, slightly above its year low of $6-15/16 and way below its 52-week high of $74-1/2. In December, Scient Corp. announced it was cutting 460 jobs and closing two offices in California and Texas. Scient dropped 16 percent on Monday to close at $1-21/32, off 98 percent from its all-time high of $133-3/4 set on March of last year. On Friday, shares of Scient rose 12 percent on news computer giant Hewlett-Packard Co. (NYSE:HWP - news) may be weighing purchasing the San Francisco-based firm. As upstart Internet companies failed to deliver good financial results and the U.S. economy slowed, technology firms in all sizes began to collapse. For Internet consultancies, which advise businesses on how to develop their Web strategies, the technology meltdown resulted in a thinner client base and a weaker bottom line. Analysts said that big consultancies -- Cap Gemini Ernst & Young, IBM Global Services, Computer Sciences Corp., Accenture and PricewaterhouseCoopers -- could be among the ones pursuing the troubled Internet firms` most precious asset: its people. ``When you talk about a consulting business you are talking about buying reputation and people and hopefully customers,`` Mahoney said. ``Obviously we`ve seen the customer bases dry up quite a bit but the IT departments at a lot of corporations are trying to bring IT back in the house. They are doing some hiring.`` |
|
| aus der Diskussion: | I-D, Concept, Kabel New M.: Peer-Group-Vergleich (hist.) |
| Autor (Datum des Eintrages): | bareda (04.04.01 22:10:44) |
| Beitrag: | 119 von 184 (ID:3243935) |
| Alle Angaben ohne Gewähr © wallstreetONLINE | |