When Internet consultancy marchFIRST filed for protection in United States bankruptcy court on April 12, things looked grim for the Hong Kong branch of the firm. After weeks of uncertainty as to the fate of the SAR operation, Andrew Nevin, managing executive of Asia-Pacific announced the office also would wind down operations. The marchFIRST saga is a classic Internet boom-bust case study. The company was formed out of the merger of Web design firm US Web, and systems integrator Whittman-Hart. The wedding of the two occurred on March 1, 2000 (hence the name). Barely 12 months later, the relationship was on the rocks. Last April, the firm's shares were trading at US$42. At its height, the company had almost 10,000 employees in 14 countries, including an office in Hong Kong. Trading in marchFIRST shares was halted late on the March 29 after the firm failed to satisfy a request for information from Nasdaq officials. Trading resumed on April 2, after the firm announced layoffs of 30 per cent of the staff and a plan to sell off large chunks of the business to Internet software and services firm Divine. Trading was suspended again on April 12 after marchFIRST announced voluntary filing of a Chapter 11 petition in bankruptcy court. While the petition covered all US divisions and affiliates of marchFIRST, the Hong Kong and European business units were not included. Experts offer a variety of explanations for marchFIRST's meteoric rise and fall. Some said the US Web/Whittman-Hart relationship was poorly conceived from the outset, but timing no doubt also played a role, as the Nasdaq crash and subsequent retrenchment happened fresh on the heels of the merger. The firms had little time to align internal financial systems and become accustomed to operations before being confronted by a life-threatening crisis. Divine was founded in 1999. It has a market capitalisation of US$234 million and a stock price of under US$2. The firm started as an Internet incubator named Divine interVentures. Recent shifts in strategy have moved the company into the software solutions business. Dell subsidiary Dell Ventures owns 15 per cent of the company. The purchase agreement concerns application service provider HostOne, marchFIRST's SAP unit, and a number of joint ventures and business assets. The sale price includes a cash payment of US$6.25 million and a balloon payment of up to US$30 million. marchFIRST expects bankruptcy court approval of the sale no later than the middle of this month. The company created by the sale has been christened Divine/Whittman-Hart. Edward Szofer, who previously served as chief development officer at marchFIRST, will run the operation. Early stories erroneously included the Hong Kong office of marchFIRST in the Divine sale. The Hong Kong office of 25 decided that without the support from the US operation, the office would close. 'We have a lot of talented people and we are proud of the work we have done. We have kept the office here small and our economics are pretty good. This year was to be the expansion year for us, unfortunately the US operation wasn't able to give us the support we need. In a lot of ways, marchFIRST was the wrong firm at the wrong time,' said Mr Nevin.