During 2008, tech mergers and acquisitions fell 40 percent across virtually every sector of the industry, with $290bn in deals getting done to date, according to a study released Thursday by research firm The 451 Group.
Deals worth $1bn (£660m) or more dropped even further, with only 32 megadeals getting done so far this year, compared with 80 last year.
Corporate tech titans that historically have had a large appetite for snapping up companies left and right were far more restrained this year.
Cisco Systems, for example, announced only four deals in 2008 — approximately a third of the deal volume it has been averaging over the past three years, according to 451. And Google also did only four deals this year, after averaging a deal per-month for two years running.
According to the report: "Unlike the earlier internet bubble, where the damages were largely self-inflicted in the tech industry, the current crisis started in the housing market and has since metastasized to the broader financial industry and, in quick order, to the rest of the economy.
"In that regard, it is much broader and deeper, and will likely take longer than the two or so years that it took to pull out of the tech recession earlier this decade."
The report added: "In 2009, 451 expects to see a continuation of companies retrenching by selling off divisions and units that are not core to their business, as well as hostile bids for undervalued companies by bargain basement shoppers.
In addition, the research group said it expects to see a continuation of private companies seeking out public companies that they can acquire, as a means to turn themselves into public companies, given that the IPO market has evaporated amid the current economic climate and market meltdown.
For those companies that find white knights, or even hostile bidders, at their door, 451 noted that buyout terms have on several occasions this year been readjusted. It predicts that such a trend will likely continue next year.
Brocade Communications, for example, initially announced a $3bn buyout offer for Foundry Networks, but then ultimately reduced it to $2.6bn at the close.
