Tech company failures and mergers will leave the industry with a low two-digit percentage (maybe 25%) of the total number of companies now in existence. Like the automobile industry, which had more than 200 car makers in the 1920s and emerged from the Depression with just a few, Silicon Valley is in for some serious contraction. The difference is that the auto industry ended up with the Big Three, whereas the number of tech companies will grow dramatically again during the next boom.

7. Palm Inc.

, which has among its , into the failing Palm Inc. this week.

The idea is to give the company time to release its forthcoming Nova operating system, which will take the cell-phone world by storm and give Apple a run for its money. It would have been far more efficient, however, to just flush that money down the toilet. With the iPhone setting the handset interface agenda, Blackberry-maker RIM kicking butt in the businesses market, and Google stirring up trouble with its Android platform, this is no time for a clueless company like Palm to be introducing a new operating system. By this time next year, Palm will be gone. And so might Elevation Partners.

8. Yahoo