The magazine is delivered by email and suffered delivery problems with Hotmail, which NatMags said accounts for 60% of the world's email programmes. Hotmail's spam filters were blocking Jellyfish, even when it was requested by users.
In addition, Jellyfish uses Flash animation, which made it more likely to be blocked by corporate servers and therefore difficult for women to view at work.
It made the decision after a trial period lasting 20 weeks and is hoping to find the Jellyfish team alternative roles within the company.
NatMags said that although the digital experiment was well received by readers, it was simply not sustainable.
The decision to close the title will likely surprise many, who have touted the online teen market as one of the major growth areas of digital media. However, the company had decided to refocus Jellyfish at an older age group of 18- to 25-year-olds and said it was still in a test period that was slated to run until September.
The Jellyfish project was conceived as part of what NatMags called a three-pronged strategy to cater for the teen audience it had carved out with CosmoGirl! magazine. The other prongs were the print monthly and the CosmoGirl! website.
NatMags closed the magazine and website in June, but indicated it would persevere with the Jellyfish trial in an attempt to move online with its audience.