Average lifetime of S&P 500 company

"The average lifetime for an S&P 500 company was 90 years; today, it is about 18 years," says Dominic Barton

 

More companies falling prey to global competition and disruptive technology.

 

.... and to senseless mergers for the benefit of investment bankers and executives of the acquired company.

 

Makes even more sense then to buy the averages and benefit from survivorship bias than it does trying to figure out and invest in the individual survivors.

 

Any idea what this means? If a company is bought out or merges with another company is it's lifetime considered over in terms of this statistic?

I'm having trouble swallowing this number if end of company life only means company goes under.

 

http://www.aei-ideas.org/2014/01/charts-of-the-day-creative-destruction-in-the-sp500-index/

Better to say, "average tenure of a company in the SPX" is 18 years.
The index churns about 50 companies a year mostly due to not fulfilling the qualifications (market cap, etc).

 

Buy a stock, if it goes up, sell it; if it goes down, don't buy it.
-Yogi Berra