UK Internet agency Webmedia has called in the receivers and will close its core Web site design and consulting business, making it the most high-profile Internet casualty yet in this country. Around 20-25 staff are thought to have been affected by the closure.
It is not clear whether the decision will have an impact on other parts of the company's interests and Webmedia failed to return calls requesting comment.
"On Thursday it was announced to the staff that Webmedia was closing its business and the receivers were coming in the next day," said a source. "We were asked to return keys and all staff were made redundant."
Shortly before Christmas, the firm announced management changes and redundancies but it has seemingly not been enough to turn the corner.
"Webmedia managed to get operating costs down but obviously not sufficiently. Basically the money coming in wasn't enough. The new team improved things a lot but it was too little, too late. The Web business has changed quite rapidly with firms like Which? taking things in-house."
Webmedia clients include the Nationwide Football League, Alliance and Leicester building society, Lufthansa and the BBC.
Webmedia last August said it had received about £200,000 in investment from advertising mogul Maurice Saatchi's Megalomedia fund.