PlanetOut Inc, owner of Gay.com, has announced it is to close its London office.

“While we plan to continue serving our global audience, we made this decision to streamline our business operations and reduce expenses,” said Karen Magee, chief executive officer.

It is unclear what will happen to the UK portal of Gay.com, which offers personals, chat, job adverts and scene information as well as news, entertainment and health news.

The company will discuss the announcement in more detail during its upcoming second quarter earnings call scheduled for August 1st, 2007.

Last week it was announced that a company that invests the wealth of Microsoft founder Bill Gates, has purchased a major stake in the company.

Cascade Investments LLC joined with a number of other private equity vehicles including Special Situations Funds, SF Capital Partners, PAR Investment Partners LP and Allen Company LLC to fund a rescue buyout of PlanetOut stock

The new investors including Mr Gates will collectively own a majority of the shares in PlanetOut, likely (dependent on the details of the private placing) to total 56.3 per cent of the company.

Earlier this month chief executive Karen Magee told Dow Jones that it would take at least 12 to 24 months to turn PlanetOut around and that the company may sell its adult businesses.

PlanetOut owns The Advocate, Gay.com, PlanetOut.com, Advocate.com, Out.com, OutTraveler.com and HIVPlusMag.com, as well as localised versions of the Gay.com site in English, French, German, Italian, Portuguese and Spanish.

The company is based in San Francisco with additional offices in New York, Los Angeles, and Minneapolis.

Both offices outside the US, London and Buenos Aires, are to close.

In the USA, PlanetOut faces competition from MTV owner Viacom who run the Logo gay television network, itself owning 365Gay.com, AfterEllen.com and AfterElton.com. And Washington Blade owner, Window Media LLC.

In the UK, PlanetOut publishes UK.Gay.com which competes with the larger gay dating site Gaydar.

A variety of independent internet statistics sites show that Gaydar.com is much more visited than Gay.com in the UK.

The PlanetOut share price was $1.77 (£0.88) as of 15:50 BST.

PlanetOut floated in October 2004 at a share price of $9 (£4.48), it quickly rose to $14.26 (£7.10) in November.