Online advertising sales house Engage is set to axe up to 225 sales jobs worldwide as the dot.com downturn continues to bite.

The company has already laid off 500 staff worldwide and expects to make a further 100 cuts from the sales arm immediately.

Up to 60 jobs are expected to go in the UK where the company sells advertising space for up to 100 sites including the UK Stock Exchange.

The future of the company's advertising interests are bleak. Engage said today it was in talks to sell its media business, but if a buyer cannot be found a further 125 jobs will go.

The bottom has fallen out of the market for online sales networks, which sell banner space to advertisers on behalf of client sites. Just last week 24/7 Media pulled the funding on its European operation.

Several other US companies, which came to Europe seeking their fortunes during the dot.com boom, have shut shop.

Phase2 Media, AvenueA and L90 have all pulled out of the sales market on this side of the Atlantic as the growth in online ad revenues failed to materialise.

Engage's US parent company CMGI, which precipitated the decision by refusing to provide further funding for Engage, has announced it is to concentrate on the more profitable software side of the business.

As part of the cutbacks, the company is also to discontinue its Engage Knowledge profiling service, which has been used to provide clients including Emap and the BBC with information on the surfing habits of UK consumers.

"Given the continued downturn in the advertising industry, Engage cannot sustain this media business at the expense of the far more promising software business," said Tony Nuzzo, chief executive of Engage.

Further details of the company's restructure are expected to emerge when it announces its fourth quarter results in mid-September.

MediaGuardian.co.uk special report
Dot.coms and dot.gones