Market Report: Sun shines in California but it's gloomy in London

Where, oh where, is Britain's answer to Facebook? The social networking website's mega-float on New York's Nasdaq was the only excitement at the end of a week to forget for the Footsie, which fell every day. But anyone looking to find decent internet companies listed on the London stock market would struggle.

The video search engine Blinkx was founded in 2004 – the same year as Facebook – and no company in the world is going to compare favourably with the social networking wonder. But Blinkx has still enjoyed a tough time. Six months ago, it appeared to be picking up momentum as its market capitalisation pushed towards £500m. Alas the shares have gone into reverse since then, as it failed to meet profit expectations. Blinkx staged a minor recovery yesterday, rising 5.3 per cent or 2.25p to 44.75p after reporting a reasonable annual profit of $12.7m (£8m) against $9.8m a year earlier.

"Blinkx's revenue performance – albeit below previous expectations – is still solid," said analysts at Citigroup, who have a target price of 100p.

But the painful fact is the shares are down two-thirds on last November.

The online grocer Ocado, founded in 2000, is another British internet stock which has flattered to deceive. The shares have suffered from a roller-coaster ride since their initial public offering at 180p two years ago. Ocado slumped 5.4 per cent or 6.2p to 108.3p yesterday after long-time bear Philip Dorgan, analyst at Panmure Gordon, reiterated that he regards it as a "sell" with a target price of just 50p. "Ocado is losing market share online and with the competitive environment likely to get tougher, we think that it will struggle to demonstrate operational leverage," he says.

Anecdotal evidence suggests Mr Dorgan may be on to something. Waitrose, part of the John Lewis Partnership, whose pension fund has slashed its holding in Ocado, has been aggressively pushing its own internet grocery service – and the delivery staff aren't afraid to knock the opposition.

Meanwhile, City scribblers were trying to work out if any UK companies will benefit from the "Facebook effect".

Liberum Capital's media team was upbeat about the prospects of the big advertising groups and dismissed the idea that brands will bypass agencies to deal directly with the likes of Facebook.

"Advertisers are unlikely to ditch the agencies – as long as they keep their skills up to date – given the need for a holistic approach," said Liberum's Ian Whittaker. "In essence, the greater the complexity, the greater the advice clients require."

Liberum's top pick is Sir Martin Sorrell's WPP. The world's biggest advertising group, which employs 140,000, has annual revenue of £10bn and a stock market value of £9.7bn. On the other hand, Facebook is worth six times as much, employs 3,000 and has revenues of a mere £2.5bn and rising.

Still, traders can rarely look beyond next week and, with the eurozone saga continuing to weigh on sentiment, WPP was marked down 20.5p at 767p.

The FTSE 100 tumbled as much as 1.5 per cent, before closing down 70.76 points or 1.3 per cent at 5283. The index has fallen nearly 12 per cent from this year's peak in mid-March and is at its lowest level since November 2011. "Never a truer word about 'Sell in May and go away'," said one trader ruefully.

Lloyds Banking Group, down 1.7p at 25.95p, and Royal Bank of Scotland, sliding 1.07p at 19.99p, were among the worst losers, falling 6 per cent and 5 per cent respectively on euro debt fears.

As investors scrabbled around for value, companies paying decent dividends were attracting buyers. British Gas's owner Centrica was one of the few risers on the FTSE 100, up 3.1p to 315p, while traders also reported interest in the oil giant BP after it slipped 4.7p to 391.95p. But the big picture was a sea of red as a slew of household names were marked down on fears of a prolonged downturn.

Marks & Spencer, which reports annual results on Tuesday, was marked down 9.5p to 337p as analysts fear the torrential rain of the last month may have hurt fashion sales. ITV also dipped 3.05p to 78.85p on advertising jitters.

Down among the minnows, there has been some chatter around Optimal Payments, a payment-processing company that is looking to cash in on the mobile boom. The shares, which fell 0.75p to 71.5p, are up more than 22 per cent on the year, and Legal & General fund manager Richard Penny said this week he was keen as the stock was "quite cheap".

Things don't look so pretty at Trinity Mirror, stuck at a new 52-week low of 26.25p, taking its market value to below £68m. Departing chief executive Sly Bailey is set to stick around until December while it finds a successor, but with the shares down by half since February, the pressure is on to move faster.