The wave of investor skittishness involving technology ventures led mValue to cease operations, the company's chief executive, Jay Haynes, said. About 30 employees were laid off when mValue closed last month, he said.
"Our backers pulled out after suffering large losses with many of their other companies," said Haynes, who declined to name the investors.
As for mValue members who are owed money by the company--which promised to pay them 50 cents an hour for viewing advertisements as they surfed the Net--they must stand in line with the rest of the company's creditors, Haynes said.
The purge within the technology sector is squeezing e-commerce companies hard as their money runs out and investors run scared. Recently, direct marketing sites have felt the pinch.
Los Angeles-based mValue was forced to shed 23 employees from its work force and overhaul its business strategy in August: Instead of paying members, the company tried motivating them to surf by holding a sweepstakes.
Hayward, Calif.-based AllAdvantage.com, which also paid members to view ads, this summer laid off 10 percent of its staff and changed its business model to include a sweepstakes. The company launched a network to sell ad space as well.
Publicly owned direct marketing firms, such as Coolsavings.com, MyPoints.com and Promotions.com, have seen their stock valuations plummet and are trading near 52-week lows.
"Our plan was seeing traction, but the markets were against us," Haynes said of mValue's closure. "Like everybody else, we were scrambling to find new money, but unfortunately it didn't work out."