Shares plummeted to an all-time low of 2.25p as the company said it did not have enough working capital for the next year and its cash would run out by September.
Chief executive Robert Bonnier quit with immediate effect and the company revealed plans to reduce the headcount by 285 and postpone plans for expansion.
The company's fortunes have taken a dramatic downturn since the height of the dotcom boom in March last year, when its shares reached 351.5p.
Sales have fallen 51% in the last three months of 2000 and its share price has spiralled downwards.
The share price was briefly lifted when French media group Vivendi Universal entered talks to buy the company, but dropped again when Vivendi pulled out. The failure of the talks forced Scoot to conduct a strategic review.
The review revealed the company's cash reserve and working capital problems, as well as technical problems with its sites which had dented consumer confidence.
The company said that one of the options to raise more cash is to sell its Loot UK classified advertising newspaper and website, which it bought last June for £189m. It also plans to implement a new business model, by introducing up-front payments of yearly publishing fees and scrapping the free trial period for new sellers.