Second UK net firm collapses

Net Imperative has only been running since February

The beleaguered technology sector has suffered another blow with the collapse of internet company Net Imperative.

The news follows hot on the heels of the fall of e-tailer, boo.com, which ceased trading last week after running out of money.

Net Imperative, which offers business news and information for the New Media industry, blamed its rapid expansion over the last few months for its failure.

It only launched its web site in February after the company was created last November.

It has called in liquidators Kroll Buchler Phillips to assess its financial situation.

But it said it intended to keep its website up and running for the near future.

Backer hit by tech sell-off

Net Imperative declined to say whether its financial backers had decided to pull out.

The company had raised between $1m and $2m to finance the venture, a lot less than other similar companies.

For example, boo.com guzzled much of its $135m investment capital, overspending on high-flying advertising campaigns and advanced web designs that many customers could not use.

One of Net Imperative's backers was web brokerage Durlacher, which has been hit by the sell-off in internet stocks.

Durlacher's share price fell to a fresh 29-week low of 68p, down 85% from its peak of 455.5p in February.

It paid about £570,000 to buy a third of Net Imperative.

Net Imperative is chaired by Albert Scardino, husband of Pearson chief executive Marjorie Scardino.

Net Imperative's collapse will yet again put the spotlight on the long term viability of internet companies.

According to a PriceWaterhouseCoopers report, one in four UK internet firms could run out of money within the next six months.