Germany tops Europe's dot com league as UK profitability lags

A new report published yesterday, PricewaterhouseCoopers Internet 150, by PricewaterhouseCoopers and Fletcher Research, indicates that Germany is the dominant Internet economy in Europe.

Despite the fact that English is the language of the Internet and despite the special relationship between UK and USA, Britain ranks as Europe's second largest player, marginally ahead of the Netherlands. The survey covers Europe's top 150 publicly listed dot coms and examined their 'burn rates.' (Burn rate is the speed at which the companies are spending cash, not generating it, and the length of time they are likely to survive.)

According to the survey, Germany accounts for 45% of Europe's top dot coms (by market capitalisation) whereas Britain accounts for 16%, closely followed by Netherlands with 14%. Fifty-six of the top companies are located in Germany with 35 in the UK. Perhaps more worrying is the news that 50% of the German companies are profitable against just 26% of the British firms. This is perhaps due to a greater focus on consumer sites in the UK rather than 'B2B' (business to business) sites. It seems however that UK entrepreneurs need to take more notice of high profile failures, such as boo.com and clickmango to survive into the long term.

The results of the survey will not surprise everyone. Germany and Holland are by far the most popular destinations for British contractors working overseas according to the PCG's Gone Abroad survey. The question is, how much competitiveness has the UK lost as a result of losing so much talent?

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Mark Roderick