Webvan

(WBVN)

, the online delivery service, said Tuesday it has halted service in Dallas.

Foster City, Calif.-based Webvan, which recently announced an indefinite postponement of east-coast expansion, said closing the Dallas operation would conserve capital and increase chances of profitability in its nine other markets.

Last month, Webvan

said it has enough money to operate through 2001. For the fourth quarter ended Dec. 31, the Internet retailer posted a better-than-expected loss of $109.1 million, or 23 cents a share, compared with a loss of $56 million, or 15 cents a share, in the same period a year ago.

Webvan executives said Dallas was its least-developed and most competitive market. The company entered the area through its acquisition of

HomeGrocer.com

in September 2000. About 220 employees were notified beginning Monday night that they would receive a 60-day severance package.

In recent

Nasdaq

trading, Webvan hadn't moved from its opening price of 34 cents.