The company, which raised about $800 million from venture capitalists since its inception roughly two years ago, had recently abandoned several markets in an effort to conserve cash. Before today's announcement, it was focusing on about 750,000 active customers who ordered home-delivered items online in seven areas: LA, Orange County, San Diego, San Francisco, Seattle, Chicago and Portland, OR.

The company started out by taking electronic orders for groceries, but quickly expanded into delivering everything from household goods to compact discs and books. It told the SEC in April that it would need a large cash infusion in order to stay in business, and its own outside auditor attached a note to the company's 2000 financial results that said there was "substantial doubt about Webvan's ability to continue."

The major cash infusion that the company was hoping for never arrived. Though venture capital in general has become harder for young firms to get, Webvan's efforts to raise more money were further hampered by the fact that it lost $144.6 million in 1999 and a staggering $453.3 million last year.

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