Gamespot posts that Turbine is closing down its Santa Monica outpost, the home of the original Asheron's Call. The staff are being offered jobs at the main office in Massachusetts, so it's unclear what's in the cards for AC.
With high-profile (and pricey licenses) Lord of the Rings Online and Dungeons & Dragons Online in development, this news and AC2's closing could indicate the studio's desire to direct resources to games that might bring a larger subscriber base than the < 40k and < 20k of AC and AC2 respectively.
I never played AC2, but had fun with AC and was impressed by a lot of their innovations: the fealty system, episodic content, a changing world, live events. 2000 was the year to be playing, and culminated in the famous Defense of the Shard, which people are still talking about. Here's hoping that LOTRO and D&DO include some of this good stuff.