Local interactive advertising firm WebVisible has shut its doors. According to a note sent from the company’s CEO to employees, WebVisible ran out of cash, and Silicon Valley Bank is shutting the company down.

WebVisible’s software allowed advertisers to manage local online campaigns on Google, Yahoo, Bing and others. The company’s services were offered directly affiliate partners to local businesses, franchisors, and national advertisers Previous WebVisible partners include AT&T, British Telecom, Yellow Pages Group of Canada, EarthLink, and The McClatchy Company, among others.

WebVisible, which was founded in 2001, has raised over $17 million from Sutter Hill Ventures, Redpoint Ventures, and Adams Street partners.

Here’s part of the note sent to employees:

It is with deep sadness and regret that I must inform you that today, December 27, 2011 is the last day of operation for WebVisible. I know this is a shock and has come abruptly. Even with all our efforts to recover throughout this past year, we found ourselves in a position in which the debt load of the company was simply too much to overcome. Our bank foreclosed on its loan which means they are taking over the company’s assets and collecting all remaining payments. As a result they have forced the company to shut down….This happened quite suddenly, and the timing could not be more unfortunate…As of today there are no employees left at WebVisible, including myself and therefore there is no one to handle anything for you.. This is like a bad movie, I can’t imagine a worse scenario for shutting a company down and laying everyone off, the only concession I was able to get from the bank was to wait until after Christmas. As the CEO I apologize that I have not been able to do more to avoid this event and this timing.

We are still trying to get confirmation from the company, and will update when we hear back.

Year-over-year spending was up 111 percent in Q4 2009 and 91 percent in Q3 2009.

WebVisible posits that Bing saw its share of search spending increase by 10 percent in Q1 over the previous quarter, while Google’s share increased by 3 percent over the same period. Yahoo’s share of spending dropped by 9 percent.

The data from WebVisible’s Report on the ‘State of Small Business Online Advertising Q1 2010′ is said to represent nearly $23 million in U.S. small business advertiser spending from more than 12,000 individual advertisers in Q1 2010. This is obviously only a small part of the total paid search spending, but it depicts a trend.

WebVisible CEO Kirsten Mangers says small businesses will spend their money wherever they can get the most bang for their buck, and that Bing is king when it comes to that: Microsoft’s search engine maintains the highest click-through rate at costs that are lower than Google’s overall, according to Mangers.

Small businesses also saw positive results from their increased search spending in the first quarter of this year. From Q4 2009 to Q1 2010, WebVisible says there was a 35 percent increase in the percentage of search clicks that resulted in a phone call for advertisers using call tracking numbers.

Click-through rates continued steady year-over-year improvement in Q1 2010, with Google’s CTR up 29 percent, Yahoo!’s CTR up 138 percent and Bing’s CTR up 53 percent. While each of the three major engines saw cost-per-clicks (CPC) decline in Q1 compared with the same period last year, overall CPCs have remained relatively stable since Q2 2009.

Similar to previous quarters, the most popular advertiser categories in Q1 2010 were attorneys, general contractors and dentists. The categories that showed higher-than-average spending levels were attorneys, roofers and plumbers, while general contractors and landscapers showed lower-than-average spending in Q1 2010.

To obtain a full copy of the WebVisible report, head on over here.

Irvine, CA based WebVisible offers software management of online interactive advertising on third party sites including Google and Yahoo. WebVisible partners include AT&T, British Telecom, Yellow Pages Group of Canada, EarthLink, and The McClatchy Company, among others.

As part of the deal, Sutter Hill Ventures Managing Director Jim White will join WebVisible’s Board of Directors. WebVisible said it would use the funds continue to build its platform and increase international sales opportunities.

Established in 2001 and formerly known as SME Global Solutions, WebVisible’s last round was $5 million in September 2005, taking total funding to $17 million.