News that Amazon.com is to cut 1,300 jobs - 15 per cent of its workforce - rounded off a bleak winter for the online economy that has seen the worst of the economic downturn.

Amazon said its sales forecasts are likely to be 10 per cent lower than expected.

The downturn in the US economy was also blamed for 400 job cuts with the closure of go.com – the Walt Disney leisure portal. Even though Disney was one of the first media organisations to embrace the internet, the company said it had concerns that go.com would ever reach profitability.

January was the worst month yet for dot.com job cuts, according to the US consultancy Challenger, Gray and Christmas. It announced at the end of January that 12,800 jobs were lost - an increase of 23 per cent in just one month.

The company has now tracked 54,343 dot.com job losses from 610 companies since December 1999. While most of the early job losses were from companies selling goods and service online, the recent data indicates that it is those involved in internet technology who are most vulnerable. There were also more than 700 media job losses.

"Brick-and-mortar businesses that are able to use the internet to complement their traditional sales are likely to be the strongest players in cyberspace until more Americans have access to and are comfortable with using the internet as their primary source for goods and services," Challenger said.

Online advertising revenue is also proving to be elusive. Altavista blamed 200 job losses (25 per cent of its work force) directly on faltering advertising demand.

This announcement came just days after the 24-hour cable news channel announced 400 job losses. This follows the merger between CNN’s parent company, Time Warner, and AOL.

The picture does not appear to be any more hopeful on the other side of the Atlantic.

According to PricewaterhouseCoopers, only 28 per cent of Europe’s biggest online firms were making any profit in the third quarter of last year. In the survey among 150 firms, 23 were found to be in the 'danger zone' and could run out of cash by September this year.

Late last year the TheStreet.com closed its UK operation entirely and cut its US workforce by 20 per cent.

Other media organisations reported to have cut their internet operations in the last month include News Corporation, the New York Times, the Daily Express, Emusic.com, The Industry Standard, Ask Jeeves, Viacom and NBC Internet.

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