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Cash-burning dotcoms are on road to crashing

Many internet companies could run out of cash within the next 15 months and one in four may crash within six months.

Companies are being warned they will find difficulties funding the second and third phases of business if they have not met high expectations.

Research by consultants PricewaterhouseCoopers reveals that 25 of the 28 companies examined were spending cash faster than money was coming in. The average burn rate to nil cash was 15 months, with 10 of the companies having a burn rate of less than 12 months.

PricewaterhouseCoopers forecasts the UK will see a significant number of dotcom mergers over the next year, driven by short burn rates and the potential to generateefficiency savings and revenue enhancement.

This consolidation may see some dotcom businesses merge with bricks and mortar businesses which have established brands.

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