RELATED POST: R.I.P. Mygazines, 2008-2008

Just weeks after settling a lawsuit with dozens of publishers, Mygazines, the controversial Web site that allowed users to share digital copies of hundreds of magazines, has closed.

According to a note posted on the Mygazines homepage, “monetary reasons” and “the state of the global economy” caused the site’s collapse. “We simply ran out of funds to support the daily operations.”

An e-mail to Mygazines was not immediately returned. Late last month, the site had more than 127,000 registered users.

Lawyers representing a large swath of consumer and b-to-b publishers—including Time Inc., Hearst, Hachette, McGraw-Hill, American Media Inc., Reed Business Information, Bonnier, Ziff Davis and Forbes, among others—had sued, which lists its address as a post office box on the Caribbean island of Anguilla, and its founder, Darren Andrew Budd, a Canadian, for copyright infringement. They settled their case on September 8, according to court documents.

According to terms of the settlement, Mygazines agreed to remove all of the publishers’ copyrighted content, review and screen uploads for any content not authorized by the publishers and open a channel to allow Mygazines to be notified when copyrighted content appears.

Mygazines appeared to comply; many prominent titles that were available for free download at the time of the launch—including People, Playboy, Dwell, Domino, Allure, Spin, Smithsonian, Popular Science, Martha Stewart Living, New York, Men’s Journal and Esquire—were gone shortly after the settlement.

The site had recently introduced a program offering publishers demographic statistics, “exclusive rights and control over your titles on” and “revenue sharing opportunities.”

In its closing note, Mygazines appeared to be holding out hope for a lifeline: “If you are a publisher interested in understanding more about our model and vision for the future of the publishing industry going forward, or to discuss our Business to Business model opportunities, please email us.”