E-mail alert software developer Alerts has been shut down and its investors are liquidating its assets, Local Tech Wire has learned.

The company, which raised $16.5 million in venture capital during its lifetime and once had as many as 80 employees, moved out of its west Raleigh headquarters in late September and took up temporary residence in the nearby offices of e-business software developer Trifolium.

Sources tell LTW that the few remaining employees were cut loose a couple of weeks ago and that all physical and technological assets are being sold off, most at “fire sale” prices. The company’s web ite was even taken off-line recently.

Kip Frey, an Alerts board member and a venture partner with Durham-based Intersouth Partners, which had invested in two funding rounds with Alerts, tells LTW that fellow investor Scott Albert of Aurora Funds of Durham assumed the position of acting chief executive of Alerts. Frey referred all questions about the company to Albert, who didn’t return repeated telephone calls or respond to e-mail.

‘A little severance’

Former Alerts employees were given little notice of the shutdown and were then ordered not to discuss it with the media, a source familiar with the company says. The workers were provided with “a little severance,” the source says.

The company was founded in 1998 as Emissary Software by former HAHT Software employees Mike Jones and John Creamer. The pair developed a way for people to track the latest information on the Internet that’s of special interest to them by having an e-mail or wireless message sent to them whenever the information is updated or changed.

The company changed its name three times over the next three years – from Emissary to AlertMeWhen.com to Alerts.com and finally dropping the dot-com portion when names like that were no longer in vogue. It pulled in two rounds of venture capital from the likes of Intersouth, Aurora, Cordova Ventures of Atlanta and Baltimore-based ABS Ventures, an affiliate of Deutsche Banc Alex. Brown.

Alerts also found success attracting major clients like financial news website CBS MarketWatch, sports website CNNSI, PC World magazine, technology news website CNET and Ford Motor Credit who saw the alerts as a marketing tool to attract and retain subscribers. Alerts charged the clients a fee based on the number of messages sent out each month.

But early last year, the company started cutting back as it shifted its focus away from consumer-oriented alerts about Internet content to working with companies, using the alert technology to monitor internal systems and intranets and send messages to employees.

Again, Alerts had success attracting some clients, such as application software providers BEA Systems and Raleigh-based TogetherSoft.

Yet, it apparently wasn’t enough. Co-founder Jones left a year ago. The company whittled its headcount down to 14 by early this summer and was searching for an acquisition partner.

“They talked with a number of firms, but in this environment it’s hard to pull off a deal, and nothing came of any of it,” says a source close to the company.