A Grim Week

"Other shoes" were dropping all over the place this week, as a number of struggling colocation providers and data center operators saw their efforts at recovery thwarted by the brutal operating environment.

Even the most pragmatic industry pros had to be taken aback by the succession of announcements this week. Here are the lowlights:

- Chapter 11 bankruptcies by Covad, Wavve and USDataCenters

- Rhythms' announcement that it will shutter its DSL service, leaving 83,000 customers less than a month to find new Internet service

- iAsiaWorks' news that it has cut 300 jobs and missed payments to creditors

- MFN's stock collapsing in the wake of the company's failure to obtain additional funding

- Exodus' stock rallying on rumors of additional funding, and then receding again when it failed to materialize

The connecting thread running through all these announcements is the difficulty of obtaining additional financing. Sources of funding are few and far between, and almost no one wants to risk throwing good money after bad in hopes of resurrecting a battered web infrastructure company.

It's no wonder that shares of Exodus, Internap, Loudcloud, Terramark, Equinix, Globix and Verado are all trading at $1.50 a share or lower.

How much more bad news is out there? Can these companies avoid the "death spiral" syndrome? If so, how? Share your thoughts and comments below.