Update:RushmoreDrive.com will be closing Friday, according to an IAC (NSDQ: IACI) spokeswoman who said the move is “part of our continued effort to rationalize the IAC emerging businesses.” The closure affects 17 employees; some people will be staying as the site’s business winds down and IAC said it will help others find new positions. As for the potential sale CEO Johnny Taylor mentioned in an e-mail his resignation letter to staff, no comment but she did say the company had exhausted possibilities. According to April comScore numbers, the site had 439,000 uniques; internal tracking is higher (as is usually the case), around 600,000.

Translation: whatever Taylor thought he had lined up didn’t match what IAC wanted so better to take the loss. The company has been willing to make some deals, selling comedy news site 236.com to JV partner Huffington Post and doing a stock swap with Active Network for Reserve America. Black Web 2.0 says the purported suitor may have been Sahara Media, owner of Honey magazine.

Original: Johnny C. Taylor, Jr. (pictured, right), president and CEO of IAC start-up RushmoreDrive.com, has resigned following what he told staffers was a failed attempt to sell the search engine aimed at the Black community.

Barry Diller has been trimming back the number of emerging companies in IAC’s portfolio for months and RushmoreDrive.com parent Black Web Enterprises Inc. seems like a good candidate for being sold if a buyer can be found. But Black Web 2.0, which first reported the news of Taylor’s departure, posted excerpts from his letter to the staff describing a slightly different scenario:

“As you all know, I’ve been working around the clock on a deal to sell RushmoreDrive.com to another company interested in the search business. We were very fortunate to have found a buyer who was willing to pay a good price, but IAC was unwilling to accept the terms. When IAC decided not to accept the offer, I made a decision to leave my position and to take a much overdue break.” (Emphasis added.)

Based in Charlotte, RushmoreDrive.com launched a little over a year ago; before that, Taylor was IAC’s SVP of human resources. It was part of of the programming group that was dissolved late last year.

• IAC Dissolving Programming Group; Lehman Leaving, Jackson Taking New Role; Which Sites Are in Play?
• IAC Search Site Rushmore Drive Launches; More Organic Sites To Come; FiLife Still Alive