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Lipstream's babbling brook runs dry

In a note to customers on the company's Web site, executives say the voice service will shut down this Friday because the company couldn't secure additional funding.

    Web voice-chat company Lipstream Networks has shut down after running out of money.

    Lipstream offered services for people to talk online using their computers. The 3-year-old company, which competed against HearMe and others, aimed its chat technology at businesses, such as e-commerce Web sites, that wanted to provide customers with online customer support.

    In a note to customers on the company's Web site, Lipstream executives said the voice service will shut down this Friday because the company couldn't secure additional funding.

    "Due to market conditions, we were unable to complete our round of financing and are therefore unable to continue the growth of our business," Lipstream executives said in the note.

    A Lipstream executive declined to comment Tuesday afternoon.

    The company, based in Cupertino, Calif., had 85 employees. Lipstream's original investors included American Express and Compaq Computer, as well as venture capital firms Angel Investors, Crosslink Capital and Sequoia Capital. Lipstream's customers included Excite@Home and Sprint.

    The Web voice-chat market has consolidated recently. HearMe last spring acquired competitor AudioTalk Networks. And Firetalk Communications recently shut down its service because of a lack of funding.