Even in the years immediately following the dot-com bust, quarterly investments in U.S. networking vendors never fell below $2 billion. But in the first three months of 2009, investors gave only $935 million to companies in this category, according to data provided to Network World by Pricewaterhouse Coopers (PwC) and the National Venture Capital Association, authors of the quarterly MoneyTree Report.

The network funding totals reflect a nationwide . In all industries, venture capitalists gave $3 billion to 549 companies during the first quarter, down from $5.7 billion spread over 866 deals in the last quarter of 2008.

"The numbers look pretty grim for [the networking] sector," says Tracy Lefteroff, a global managing partner of Pricewaterhouse Coopers (PwC).

Investment in network companies totaled $1.9 billion in the fourth quarter of 2008, and $2.7 billion in the first quarter of that year. Each quarter, MoneyTree authors provide Network World with a special data cut comprised of investments in computer software, hardware, peripherals and services; data, Internet, satellite and wireless communications; Internet software, e-commerce, digital imaging, computer graphics and other network-related technologies.

Not since the first quarter of 1996 have investments in network vendors fallen below $1 billion. In the run-up to the dot-com boom, quarterly investments routinely topped $10 billion. From 2002 to 2007, investments settled into the $2 billion to $3 billion range each quarter.