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Dot.com rationalisation continues

More international dot.coms have gone under or scaled back plans, but at least one top analyst isn't too fazed.

Call it 'rationalisation' or 'consolidation', the dot.com industry's brutal shakeout continues at full speed.

Auctions.com has decided to scale back ambitious plans to build a generic B2C portal and will focus instead on its automotive and real estate Web sites, Cars.com and HomeScape.com. CarOrder.com has closed down completely ahead of Amazon's launch of an online car selling operation in partnership with Greenlight.com. Amazon.com also took a hit when furniture retailer Living.com folded. Amazon.com was due to receive $145 million over five years in exchange for listing Living.com on its site.

During its lifetime, Living.com ran through $41 million from venture capital firms such as Benchmark Capital, GE Capital and Starbucks before laying off its 275 employees and filing for bankruptcy. "The recent downturn in the capital markets has substantially impaired our ability to raise the capital required to achieve profitability," said Shaun Holliday, chief executive officer, Living.com, in a statement.

Most analysts see the developments as inevitable. "Last year was spring training, and now it's time for the capital markets to decide who's on the team and who gets cut," said Jon Ekoniak, analyst at US Bancorp Piper Jaffray. "Online companies won't make it without outside life support, but while the market opportunity is as bright as ever, we're getting more discriminating, and only a few players will survive in each area."

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