SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

           FOR THE TRANSITION PERIOD FROM __________ TO ______________

                           COMMISSION FILE NO. 0-25053


                               THEGLOBE.COM, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


        STATE OF DELAWARE                                  14-1782422
 ----------------------------                        -------------------
(STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                       IDENTIFICATION NO.)


     110 EAST BROWARD BOULEVARD, SUITE 1400
             FORT LAUDERDALE, FL.                           33301
 --------------------------------------------           --------------
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)


                                (954) 769 - 5900
               REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes [X] No [ ]

The number of shares  outstanding of the  Registrant's  Common Stock,  $.001 par
value (the "Common Stock"), as of May 5, 2004 was 132,192,849.


<PAGE>


                                   FORM 10-QSB

                                      INDEX

                          PART I FINANCIAL INFORMATION

                                                                           Page
                                                                           ----

Item 1. Condensed Consolidated Financial Statements

       Condensed Consolidated Balance Sheets at March 31, 2004
       (unaudited) and December 31, 2003                                      1

       Unaudited Condensed Consolidated Statements of Operations
       for the three months ended March 31, 2004 and 2003                     2

       Unaudited Condensed Consolidated Statements of Cash Flows
       for the three months ended March 31, 2004 and 2003                     3

       Notes to Unaudited Condensed Consolidated Financial Statements         4

Item 2. Management's Discussion and Analysis of Financial Condition
         and Results of Operations or Plan of Operation                      12

Item 3. Controls and Procedures                                              29


                           PART II. OTHER INFORMATION


Item 1. Legal Proceedings                                                    30

Item 2. Changes  in  Securities  and  Small Business Issuer Purchases
        of Equity Securities                                                 30

Item 3. Defaults Upon Senior Securities                                      31

Item 4. Submission  of  Matters  to  a  Vote of Security Holders             31

Item 5. Other  Information                                                   31

Item 6. Exhibits and Reports on Form 8-K                                     32

        A. Exhibits B. Reports on Form 8-K

Signatures                                                                   33


<PAGE>


                          PART I FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               theglobe.com, inc.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                              MARCH 31,          DECEMBER 31,
                                                                                2004                 2003
                                                                            -------------       -------------
                                                                             (UNAUDITED)
                                ASSETS
<S>                                                                         <C>                 <C>
Current assets:
     Cash and cash equivalents .......................................      $  26,416,501       $   1,061,702
     Marketable securities............................................             42,864             267,970
     Accounts receivable, net ........................................            760,956             958,487
     Inventory, net ..................................................          1,354,884             770,314
     Prepaid and other current assets ................................          1,282,425           1,397,962
                                                                            -------------       -------------
        Total current assets .........................................         29,857,630           4,456,435

     Intangible assets ...............................................            206,402             199,020
     Property and equipment, net .....................................          2,496,778           2,416,383
     Other assets ....................................................             92,445             100,240
                                                                            -------------       -------------

        Total assets .................................................      $  32,653,255       $   7,172,078
                                                                            =============       =============

                   LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable ................................................      $   1,244,662       $   1,935,142
     Accrued expenses and other current liabilities ..................          1,271,686             840,376
     Deferred revenue ................................................            229,259             176,591
     Current portion of long-term debt and notes payable..............            121,516             121,919
                                                                            -------------       -------------
        Total current liabilities ....................................          2,867,123           3,074,028

Long-term debt .......................................................            153,233           1,792,568
Other long-term liabilities ..........................................            111,098             124,943
                                                                            -------------       -------------

        Total liabilities ............................................          3,131,454           4,991,539
                                                                            -------------       -------------

Stockholders' equity:
     Preferred stock, at liquidation value ...........................                 --             500,000
     Common stock ....................................................            132,690              50,246
     Additional paid-in capital ......................................        270,723,940         238,301,862
     Common stock, 699,281 common shares, held in treasury, at cost ..           (371,458)           (371,458)
     Accumulated other comprehensive income...........................                 --               1,562
     Accumulated deficit .............................................       (240,963,371)       (236,301,673)
                                                                            -------------       -------------
        Total stockholders' equity ...................................         29,521,801           2,180,539
                                                                            -------------       -------------
        Total liabilities and stockholders' equity ...................      $  32,653,255       $   7,172,078
                                                                            =============       =============
</TABLE>


See accompanying notes to unaudited condensed consolidated financial statements.


                                       1
<PAGE>

                               theglobe.com, inc.

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                       MARCH 31,
                                                           ---------------------------------
                                                                 2004               2003
                                                           --------------      -------------
                                                                       UNAUDITED
                                                           ---------------------------------
<S>                                                          <C>                <C>
Net revenue:
    Advertising .........................................    $    381,386       $    546,869
    Magazine sales.......................................         393,739            692,952
    Electronic commerce and other .......................         242,774            418,529
    Telephony services...................................          99,548                 --
                                                             ------------       ------------
         Total net revenue ..............................       1,117,447          1,658,350

 Operating expenses:
    Cost of products and publications sold...............         630,940            847,238
    Data communications, telecom and network operations..         692,187                 --
    Sales and marketing .................................       1,091,881            567,643
    Product development .................................         178,453            153,711
    General and administrative ..........................       2,065,945            610,358
    Depreciation.........................................         216,000             22,825
    Amortization of intangibles..........................          20,111                 --
                                                             ------------       ------------
Total operating expenses ................................       4,895,517          2,201,775
                                                             ------------       ------------
Loss from operations ....................................      (3,778,070)          (543,425)
                                                             ------------       ------------

Other expense:
    Interest expense, net ...............................        (793,829)            (3,322)
    Other expense, net ..................................         (89,799)          (135,000)
                                                             ------------       ------------
Other expense, net ......................................        (883,628)          (138,322)
                                                             ------------       ------------
Loss before income tax benefit ..........................      (4,661,698)          (681,747)
Income tax benefit ......................................              --                 --
                                                             ------------       ------------
Net loss ................................................    $ (4,661,698)      $   (681,747)
                                                             ============       ============
Basic and diluted net loss per common share .............    $      (0.07)      $      (0.04)
                                                             ============       ============
Weighted average basic and diluted shares outstanding....      70,986,256         30,382,293
                                                             ============       ============
</TABLE>


See accompanying notes to unaudited condensed consolidated financial statements.


                                       2
<PAGE>

                               theglobe.com, inc.

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                            THREE MONTHS ENDED MARCH 31,
                                                                                           -----------------------------
                                                                                              2004               2003
                                                                                           -----------       -----------
                                                                                                    (UNAUDITED)
<S>                                                                                        <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ..........................................................................      $(4,661,698)      $  (681,747)
    Adjustments to reconcile net loss to net cash and cash equivalents used in
       operating activities:
    Depreciation and amortization ...................................................          236,111            22,825
    Provisions for uncollectible accounts receivable.................................           20,000             5,203
    Provisions for excess and obsolete inventory.....................................           (4,485)               --
    Non-cash interest expense .......................................................          785,886                --
    Reserve against amounts loaned to Internet venture ..............................          110,000           135,000
    Contributed officer compensation ................................................               --            50,000
    Employee stock compensation......................................................          150,533                --
    Compensation related to non-employee stock options ..............................          294,796                --
    Other, net.......................................................................            5,262                --

    Changes  in  operating  assets  and  liabilities,  net  of  acquisition  and
      dispositions:
    Inventory, net ..................................................................         (580,085)              279
    Accounts receivable, net ........................................................          177,531           325,816
    Prepaid and other current assets ................................................          115,537            53,044
    Accounts payable ................................................................         (690,480)         (865,066)
    Accrued expenses and other current liabilities ..................................          375,335           711,377
    Deferred revenue ................................................................           52,668            (1,920)
    Other long-term liabilities......................................................          (14,840)               --
                                                                                           -----------       -----------

Net cash and cash equivalents used in operating activities ..........................       (3,627,929)         (245,189)
                                                                                           -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Sales of marketable securities, net .............................................          225,070                --
    Amounts loaned to Internet venture ..............................................         (110,000)         (135,000)
    Purchases of property and equipment .............................................         (288,601)          (20,664)
    Patent costs incurred............................................................          (25,252)               --
    Other, net.......................................................................           (3,500)               --
                                                                                            -----------       -----------

Net cash and cash equivalents used in investing activities ..........................         (202,283)         (155,664)
                                                                                            -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Borrowing on notes payable ......................................................        2,000,000                --
    Proceeds from issuance of common stock, net......................................       27,055,281                --
    Proceeds from issuance of preferred stock, net...................................               --           500,000
    Proceeds from exercise of common stock options ..................................          139,545                --
    Payments on long-term debt, notes payable and capital lease obligations .........           (9,815)          (32,381)
                                                                                           -----------       -----------

Net cash and cash equivalents provided by financing activities ......................       29,185,011           467,619
                                                                                           -----------       -----------
      Net change in cash and cash equivalents .......................................       25,354,799            66,766

Cash and cash equivalents at beginning of period ....................................        1,061,702           725,422
                                                                                           -----------       -----------
Cash and cash equivalents at end of period ..........................................      $26,416,501       $   792,188
                                                                                           ===========       ===========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       3
<PAGE>

                               THEGLOBE.COM, INC.

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of theglobe.com

theglobe.com, inc. (the "Company" or "theglobe") was incorporated on May 1, 1995
(inception) and commenced operations on that date. Originally,  theglobe.com was
an online  community with registered  members and users in the United States and
abroad.  That  product  gave  users the  freedom  to  personalize  their  online
experience by publishing their own content and by interacting with others having
similar interests.  However,  due to the deterioration of the online advertising
market,  the Company was forced to restructure  and ceased the operations of its
online community on August 15, 2001. The Company then sold most of its remaining
online and offline  properties.  On June 1, 2002,  Chairman  Michael S. Egan and
Director Edward A. Cespedes became Chief Executive  Officer and President of the
Company, respectively.

 The Company  continues  to operate its  Computer  Games print  magazine and the
associated  website  Computer  Games Online  (www.cgonline.com),  as well as the
games  distribution  business  of Chips & Bits,  Inc.  (www.chipsbits.com).  The
Company continues to actively explore a number of strategic alternatives for its
remaining  online  and  offline  game  properties,   including   continuing  its
operations and using its cash on hand,  selling some or all of these  properties
and/or entering into new or different lines of business.

On November 14, 2002, the Company acquired certain Voice over Internet  Protocol
("VoIP") assets and is now aggressively  pursuing  opportunities related to this
acquisition under the brand name,  "voiceglo".  In exchange for the assets,  the
Company issued warrants to acquire  1,750,000  shares of its Common Stock and an
additional 425,000 warrants as part of an earn-out structure upon the attainment
of certain  performance  targets.  The  earn-out  performance  targets  were not
achieved and the 425,000 earn-out warrants expired on December 31, 2003.

On May 28, 2003, the Company acquired Direct Partner Telecom,  Inc.  ("DPT"),  a
company engaged in VoIP telephony  services in exchange for 1,375,000  shares of
the  Company's  Common  Stock and the  issuance of  warrants to acquire  500,000
shares of the  Company's  Common  Stock.  The  transaction  included an earn-out
arrangement  whereby the former shareholders of DPT may earn additional warrants
to acquire up to 2,750,000  shares of the Company's  Common Stock at an exercise
price of $0.72 per share upon the attainment of certain  performance  targets by
DPT, or upon a change in control as  defined,  over  approximately  a three year
period following the date of acquisition.  Effective March 31, 2004,  500,000 of
the  earn-out  warrants  were  forfeited  as  performance  targets  had not been
achieved for the first of the three year periods.

The Company acquired all of the physical assets and intellectual property of DPT
and  originally  planned to continue to operate the company as a subsidiary  and
engage in the  provision of VoIP  services to other  telephony  businesses  on a
wholesale transactional basis. In the first quarter of 2004, the Company decided
to  suspend  DPT's  wholesale   business  and  dedicate  the  DPT  physical  and
intellectual  assets to its retail VoIP business,  which is conducted  under the
name "voiceglo". As a result, the Company wrote off the goodwill associated with
the  purchase  of DPT as of  December  31,  2003,  and  intends to employ  DPT's
physical assets in the build out of the VoIP network.

As of March 31, 2004, the Company's  revenue sources were  principally  from the
sale of  print  advertising  in its  Computer  Games  magazine;  the sale of its
Computer Games magazine through  newsstands and  subscriptions;  and the sale of
video  games  and  related  products  through  Chips &  Bits,  Inc.,  its  games
distribution  business.  Given their recent launch,  the Company's voiceglo VoIP
products and services have yet to produce any significant revenue.  Management's
intent, going forward, is to devote substantial  monetary,  management and human
resources to the Company's "voiceglo" VoIP business.

During the three months ended March 31, 2004, the Company issued debt and equity
securities for net proceeds of $29,055,281.  As further discussed in Note 3, the
Company  accounted for the issuance of the debt  securities  in accordance  with
EITF 98-5,  "Accounting  for Convertible  Securities with Beneficial  Conversion
Features or Contingently  Adjustable  Conversion  Ratios," which resulted in the
recognition  of  interest  expense of  $687,000  at the  respective  date of the
securities issuance.

(b) Principles of Consolidation

The  condensed  consolidated  financial  statements  include the accounts of the
Company  and its  wholly  owned  subsidiaries  from  their  respective  dates of
acquisition.  All significant  intercompany  balances and transactions have been
eliminated in consolidation.


                                       4
<PAGE>


(c) Unaudited Interim Condensed Consolidated Financial Information

The unaudited interim condensed consolidated financial statements of the Company
as of March 31,  2004 and for the three  months  ended  March 31,  2004 and 2003
included herein have been prepared in accordance with the  instructions for Form
10-QSB under the Securities Exchange Act of 1934, as amended,  and Article 10 of
Regulation S-X under the Securities Act of 1933, as amended. Certain information
and note  disclosures  normally  included in consolidated  financial  statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted pursuant to such rules and regulations  relating to interim
condensed consolidated financial statements.

In the opinion of  management,  the  accompanying  unaudited  interim  condensed
consolidated  financial  statements reflect all adjustments,  consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of the Company at March 31, 2004 and the results of its operations for the three
months  ended  March 31,  2004 and 2003 and its cash flows for the three  months
ended March 31, 2004 and 2003.

The results of  operations  for such periods are not  necessarily  indicative of
results  expected for the full year or for any future  period.  These  financial
statements should be read in conjunction with the audited  financial  statements
as of December  31,  2003,  and for the two years then ended and  related  notes
included in the  Company's  Form 10-KSB filed with the  Securities  and Exchange
Commission.

(d) Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during the reporting period.  These
estimates  and  assumptions  relate to estimates of  collectibility  of accounts
receivable,  the  valuation of  inventory,  accruals and other  factors.  Actual
results could differ from those estimates.

(e) Cash and Cash Equivalents

Cash  equivalents  consist of money  market funds and highly  liquid  short-term
investments with qualified  financial  institutions.  The Company  considers all
highly liquid securities with original  maturities of three months or less to be
cash equivalents.

(f) Marketable Securities

The  Company  accounts  for its  investment  in debt and  equity  securities  in
accordance with Statement of Financial  Accounting  Standards  ("SFAS") No. 115,
"Accounting  for Certain  Investments in Debt and Equity  Securities."  All such
investments  are  classified  as   available-for-sale  as  of  March  31,  2004.
Available-for-sale  securities  are stated at market value,  which  approximates
fair value,  and unrealized  holding gains and losses are excluded from earnings
and included as a component of stockholders' equity until realized.

The following is a summary of available-for-sale securities:

<TABLE>
<CAPTION>
                                               March 31, 2004            December 31, 2003
                                         ------------------------- ---------------------------
                                             Cost      Fair Value      Cost        Fair Value
                                         ------------ ------------ ------------   ------------
<S>                                      <C>          <C>          <C>            <C>
Preferred Securities...............      $        --  $        --  $   225,000    $   225,000
U.S. Treasury Bills................           42,848       42,864       41,408         42,970
                                         ------------ ------------ ------------   ------------

      Total........................      $    42,848  $    42,864  $   266,408    $   267,970
                                         ============ ============ ============   ============
</TABLE>

During the three  months  ended  March 31,  2004 and 2003,  the  Company  had no
significant  gross  realized  gains or  losses  on  sales of  available-for-sale
securities.

(g) Comprehensive Loss

The Company reports comprehensive income (loss) in accordance with SFAS No. 130,
"Reporting  Comprehensive  Income".  Comprehensive  loss  is  comprised  of  two
components: net loss and other comprehensive income or loss. Other comprehensive
income or loss includes  items such as unrealized  gains or losses on marketable
securities,  etc. The Company had no other  comprehensive  income or loss in the
first quarter of 2004 and 2003, respectively.


                                       5
<PAGE>

(h) Inventory

Inventories,  consisting  primarily of products available for sale, are recorded
on a first in, first out basis and valued at the lower of cost or market  value.
The Company's reserve for excess and obsolete inventory as of March 31, 2004 and
December 31, 2003 was approximately $102,000 and $109,000, respectively.

 (i) Revenue Recognition

The  Company's  revenues  were  derived  principally  from  the  sale  of  print
advertisements  under  short-term  contracts in our games  information  magazine
Computer Games; the sale of our games  information  magazine through  newsstands
and  subscriptions;  the sale of video  games and related  products  through our
games  distribution  business  Chips & Bits,  Inc.;  and  from  the sale of VoIP
telephony services over the Internet.

Advertising  revenues  from the sale of print  advertisements  under  short-term
contracts in the games  information  magazine are recognized at the on-sale date
of the magazine.

Newsstand sales of the games information  magazine are recognized at the on-sale
date of the magazine, net of provisions for estimated returns. Subscriptions are
recorded as deferred  revenue when  initially  received and recognized as income
ratably over the subscription term.

Sales of video games and related  products from the online store are  recognized
as  revenue  when the  product is shipped  to the  customer.  Amounts  billed to
customers  for shipping and  handling  charges are included in net revenue.  The
Company provides an allowance for returns of merchandise sold through its online
store. The allowance for returns provided to date has not been significant.

VoIP telephony  services revenue  represents fees charged to customers for voice
services and is recognized based on minutes of customer usage or as services are
provided.  The Company records payments received in advance for prepaid services
as deferred revenue until the related services are provided. Sales of peripheral
VoIP  telephony  equipment are recognized as revenue when the product is shipped
to the customer.  Amounts billed to customers for shipping and handling  charges
are included in net revenue.

(j) Concentration of Credit Risk

Financial  instruments,  which subject the Company to  concentrations  of credit
risk, consist primarily of cash and cash equivalents,  marketable securities and
trade accounts  receivable.  The Company maintains its cash and cash equivalents
with various financial  institutions and invests its funds among a diverse group
of issuers and instruments.  The Company performs ongoing credit  evaluations of
its  customers'  financial  condition and  establishes an allowance for doubtful
accounts based upon factors surrounding the credit risk of customers, historical
trends and other information. Concentration of credit risk is limited due to the
Company's large number of customers.

For the three  months  ended  March  31,  2004,  there  were no  customers  that
accounted for over 10% of consolidated net revenue.

(k) Net loss per share

Basic and diluted net loss per common  share were  computed by dividing net loss
applicable to common  stockholders  by the weighted  average number of shares of
common stock  outstanding  for each period  presented.  Due to the Company's net
losses,  the  effect  of  potentially   dilutive   securities  or  common  stock
equivalents  that could be issued was  excluded  from the  diluted  net loss per
common share  calculation  due to the  anti-dilutive  effect.  Such  potentially
dilutive securities and common stock equivalents  consisted of the following for
the periods ended March 31:

                                                     2004            2003
                                                  ----------      ----------
Options to purchase common stock .............     9,924,000       5,970,000
Common shares issuable upon conversion of
    Series F Preferred Stock .................            --      16,667,000
Common shares issuable upon conversion of
    Warrants .................................    26,504,000      10,885,000
                                                  ----------      ----------
Total ........................................    36,428,000      33,522,000
                                                  ==========      ==========


                                       6
<PAGE>


Net loss applicable to common stockholders was calculated as follows:

                                                 THREE MONTHS ENDED
                                                      MARCH 31,
                                           -----------------------------
                                               2004              2003
                                           -----------       -----------
Net loss ...............................   $ (4,661,698)     $  (681,747)
Beneficial conversion features of
    preferred stock.....................             --         (500,000)
                                           ------------       -----------
    Net loss applicable to common
      stockholders .....................   $ (4,661,698)     $(1,181,747)
                                           ============       ===========


In  March  2003,  the  Company  issued  $500,000  of  Series F  Preferred  Stock
convertible  into shares of the  Company's  Common Stock at a price of $0.03 per
share,  as well as warrants to purchase  approximately  3,333,000  shares of the
Company's  Common Stock at an exercise price of $0.125 per share. As a result of
the preferential  conversion  discounts  related to the issuance of the Series F
Preferred Stock and associated warrants,  $500,000 was recorded as a dividend to
the  preferred  stockholders  in  March  2003,  as  the  preferred  shares  were
immediately convertible into common shares.

(l)  Reclassifications

Certain 2003 amounts were reclassified to conform to the 2004 presentation.

(2) OTHER ASSETS

On February 25,  2003,  theglobe.com  entered  into a Loan and  Purchase  Option
Agreement with a development stage Internet related business venture pursuant to
which  it  agreed  to  fund,  in the form of a loan,  at the  discretion  of the
Company, the venture's operating expenses and obtained the option to acquire all
of the  outstanding  capital  stock of the venture in exchange  for, when and if
exercised,  $40,000  in cash  and the  issuance  of an  aggregate  of  2,000,000
unregistered  restricted shares of  theglobe.com's  common stock (the "Option").
The Loan is secured by a lien on the assets of the venture.  Effective April 14,
2004, the Loan and Purchase  Option  Agreement and promissory  note were amended
extending  the  maturity  date of the  Loan  to May  31,  2004.  The  Option  is
exercisable  at anytime on or before  ten days after  theglobe.com's  receipt of
notice  relating to the award of a certain  contract  currently being pursued by
the venture.  In the event of the  exercise of the Option,  (i) the existing CEO
and CFO of the venture have agreed to enter into employment  agreements  whereby
each  would  agree to remain in the  employ of the  venture  for a period of two
years following the closing of the Option in exchange for base compensation plus
participation  in a bonus pool based upon the pre-tax  income of the venture and
(ii) the 2,000,000 shares of theglobe.com Common Stock issued upon such exercise
will be entitled to certain  "piggy-back"  registration rights. If the Option is
not exercised,  then theglobe.com has agreed, subject to certain exceptions,  to
forgive  repayment  of  $60,000  of the  amount  loaned.  As of March 31,  2004,
$645,000  has  been  advanced  to  this  venture.  Due  to  the  uncertainty  of
collectibility  of the  Loan,  as it is to a  development  stage  business,  the
Company has set up a reserve for all of the Loan except the $40,000 attributable
to the acquisition should the Company exercise the Option. Additions to the Loan
reserve  of  $110,000  and  $135,000  were  included  in  other  expense  in the
accompanying condensed statements of operations for the three months ended March
31, 2004 and 2003, respectively.

(3) CAPITAL TRANSACTIONS

On February 2, 2004, the Company's  Chairman and Chief Executive Officer and his
spouse,  entered into a Note  Purchase  Agreement  with the Company  pursuant to
which they acquired a demand convertible  promissory note (the "Bridge Note") in
the aggregate  principal  amount of $2,000,000.  The Bridge Note was convertible
into shares of the Company's Common Stock. The Bridge Note provided for interest
at  the  rate  of  ten  percent  per  annum  and  was  secured  by a  pledge  of
substantially  all of the assets of the  Company.  Such  security  interest  was
shared with the holders of the Company's $1,750,000  Convertible Notes issued to
E&C Capital Partners and certain  affiliates of our Chairman and Chief Executive
Officer.  In addition,  the Chairman and Chief Executive  Officer and his spouse
were issued a warrant (the "Warrant") to acquire 204,082 shares of the Company's
Common Stock at an exercise price of $1.22 per share. The Warrant is exercisable
at any time on or before  February 2, 2009.  The exercise  price of the Warrant,
together  with the number of shares for which such  Warrant is  exercisable,  is
subject to adjustment upon the occurrence of certain events.


                                       7
<PAGE>


An allocation of the proceeds  received from the issuance of the Bridge Note was
made between the debt  instrument  and the Warrant by  determining  the pro rata
share of the  proceeds  for each by  comparing  the fair value of each  security
issued to the total fair value.  The fair value of the  Warrant  was  determined
using the Black Scholes model.  The fair value of the Bridge Note was determined
by measuring the fair value of the Common Shares on an "as-converted"  basis. As
a result,  $170,000  was  allocated to the Warrant and recorded as a discount on
the debt  issued and  additional  paid in capital.  The value of the  beneficial
conversion feature of the Bridge Note was calculated by comparing the fair value
of the underlying common shares of the Bridge Note on the date of issuance based
on the  closing  price of our  Common  Stock as  reflected  on the  OTCBB to the
"effective"  conversion price. This resulted in a beneficial conversion discount
of  $517,000,  which  was  recorded  as  interest  expense  in the  accompanying
condensed   consolidated   statement  of  operations  as  the  Bridge  Note  was
immediately  convertible into common shares. In addition, the value allocated to
the Warrant and  characterized  as discount on the Bridge Note was recognized as
interest expense, as the Bridge Note was due on demand.

In March 2004,  theglobe.com  completed a private offering of 333,816 units (the
"Units") for a purchase  price of $85 per Unit (the  "Private  Offering").  Each
Unit  consisted of 100 shares of the Company's  Common  Stock,  $0.001 par value
(the "Common Stock"),  and warrants to acquire 50 shares of the Company's Common
Stock (the "Warrants").  The Warrants are exercisable for a period of five years
commencing  60 days after the initial  closing at an initial  exercise  price of
$0.001 per share.  The aggregate  number of shares of Common Stock issued in the
Private  Offering  was  33,381,647  shares  for an  aggregate  consideration  of
$28,374,400,  or  approximately  $0.57 per share  assuming  the  exercise of the
16,690,824 Warrants.

The Private Offering was directed solely to investors who are  sophisticated and
accredited  within the meaning of applicable  securities laws, most of whom were
not  affiliates  with the  Company.  The purpose of the Private  Offering was to
raise funds for use primarily in the  Company's  developing  voiceglo  business,
including the deployment of networks, website development, marketing and capital
infrastructure  expenditures and working  capital.  Proceeds may also be used in
connection with theglobe's other existing or future business operations.

Halpern Capital,  Inc., acted as placement agent for the Private  Offering,  and
was paid a commission of $1.2 million and issued a warrant to acquire  1,000,000
shares of Common Stock at $0.001 per share.

The securities  offered were not registered under the Securities Act of 1933 and
may not be offered  or resold in the United  States  absent  registration  or an
applicable exemption from such registration requirements.  Pursuant to the terms
of the Private Offering,  the Company filed a registration statement relating to
the resale of the Securities on April 16, 2004 which became effective on May 11,
2004.

In connection with the Private  Offering,  Michael S. Egan, our Chairman,  Chief
Executive  Officer  and  principal  stockholder,  together  with  certain of his
affiliates, including E&C Capital Partners, converted the $2,000,000 Convertible
Bridge Note,  $1,750,000 of Secured  Convertible  Notes and all of the Company's
outstanding  shares of Series F Preferred  Stock, and exercised (on a "cashless"
basis) all of the  warrants  issued in  connection  with the  foregoing  Secured
Convertible  Notes and Series F Preferred Stock,  together with certain warrants
issued to Dancing Bear  Investments,  an  affiliate of Mr. Egan.  As a result of
such  conversions  and exercises,  the Company issued an aggregate of 48,775,909
additional shares of Common Stock.

Pursuant to the Company's  Stockholder  Rights Agreement (the "Agreement") dated
November 12, 1998,  the Company's  Board of Directors  authorized and declared a
dividend of one preferred stock purchase right (a "Right") for each  outstanding
share of the  Company's  then  outstanding  Common  Stock and all new  shares of
Common  Stock  issued,  as  defined by the  Agreement.  In  general,  each Right
entitles the holder the right to purchase one  one-thousandth  of a share of the
Company's Junior Participating Preferred Stock, subject to adjustment as defined
by the  Agreement.  The  Rights  were  intended  to have  various  anti-takeover
effects,  including causing  substantial  dilution to any person or any group of
persons that  attempts to acquire the Company on terms not approved by our Board
of Directors.  In connection with the Agreement, on April 13, 2004, the Board of
Directors  of the Company  adopted a  resolution  amending  the  Certificate  of
Designation of the Corporation  increasing the number of shares of the Company's
Junior Participating Preferred Stock from 100,000 shares to 250,000 shares.

(4) STOCK OPTION PLANS

The Company has outstanding at March 31, 2004,  71,120 options which are subject
to variable accounting in accordance with FIN No. 44 as a result of a re-pricing
transaction in 2000. No compensation expense was recorded in connection with the
re-priced  stock options  during the three months ended March 31, 2004 and 2003.
Depending upon movements in the market value of the Company's common stock, this
accounting  treatment may result in additional non-cash  compensation charges in
future periods.

A total of 892,500  stock  options  were  granted  during the three months ended
March 31, 2004,  including  grants of 215,000  stock  options to  non-employees.
Compensation  expense of approximately  $295,000 was recognized during the three
months  ended  March 31,  2004  with  respect  to  non-employee  stock  options.
Approximately $151,000 of compensation expense related to employee option grants
with  below-market  exercise  prices was recorded  during the three months ended
March 31 2004. A total of 286,500  stock  options were  exercised and a total of
625,110  stock  options were  cancelled  during the three months ended March 31,
2004.  No stock  options were issued,  while a total of 1,500 stock options were
cancelled during the three months ended March 31, 2003.


                                       8
<PAGE>


The Company  estimates  the fair value of each stock option at the grant date by
using the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 2004: no dividend yield; an expected life of five
years; 160% expected volatility and 3.00% risk free interest rate.

In accordance with SFAS No. 123, the Company applies Accounting Principles Board
Opinion  No. 25,  "Accounting  for Stock  Issued to  Employees,"  to account for
stock-based  awards  granted to  employees.  The  following  table  presents the
Company's pro forma net loss for the three months ended March 31, 2004,  had the
Company  determined  compensation cost based on the fair value at the grant date
for all of its employee stock options issued under SFAS No. 123:

                                                   2004
                                              -------------
Net loss:
   As reported .........................      $  (4,661,698)
   Pro forma ...........................         (5,354,000)

Basic and diluted loss per common share:
   As reported .........................      $       (0.07)
   Pro forma ...........................              (0.08)



(5) LITIGATION

On and  after  August 3, 2001 and as of the date of this  filing,  six  putative
shareholder class action lawsuits were filed against the Company, certain of its
current and former  officers and directors,  and several  investment  banks that
were the underwriters of the Company's November 23, 1998 initial public offering
and its May 19, 1999 secondary  offering.  The lawsuits were filed in the United
States  District  Court for the Southern  District of New York.  The  complaints
against  the  Company  have  been  consolidated  into  a  single  action  and  a
Consolidated Amended Complaint,  which is now the operative complaint, was filed
on April 19, 2002.

The lawsuit  purports to be a class action filed on behalf of  purchasers of the
stock of the Company  during the period from November 12, 1998 through  December
6, 2000.  Plaintiffs  allege that the underwriter  defendants agreed to allocate
stock in the Company's  initial public offering to certain investors in exchange
for excessive and  undisclosed  commissions and agreements by those investors to
make additional purchases of stock in the aftermarket at pre-determined  prices.
Plaintiffs  allege that the Prospectus for the Company's initial public offering
was false and misleading and in violation of the securities  laws because it did
not disclose  these  arrangements.  The action seeks  damages in an  unspecified
amount.

The action is being  coordinated with  approximately  300 other nearly identical
actions filed against other  companies.  On July 15, 2002,  the Company moved to
dismiss all claims against it and the Individual Defendants. On October 9, 2002,
the Court dismissed the Individual  Defendants  from the case without  prejudice
based on  stipulations  of dismissal  filed by the plaintiffs and the Individual
Defendants.  On February  19,  2003,  the Court denied the motion to dismiss the
complaint  against  the  Company.  The  Company  has  approved a  Memorandum  of
Understanding  ("MOU")  and  related  agreements  which set forth the terms of a
settlement between the Company, the plaintiff class and the vast majority of the
other  approximately  300  issuer  defendants.   Among  other  provisions,   the
settlement contemplated by the MOU provides for a release of the Company and the
individual defendants for the conduct alleged in the action to be wrongful.  The
Company would agree to undertake certain responsibilities, including agreeing to
assign away, not assert,  or release  certain  potential  claims the Company may
have against its  underwriters.  It is anticipated that any potential  financial
obligation  of the  Company to  plaintiffs  pursuant to the terms of the MOU and
related agreements will be covered by existing insurance. Therefore, the Company
does not expect that the settlement will involve any payment by the Company. The
MOU and related  agreements are subject to a number of contingencies,  including
the  negotiation  of a settlement  agreement  and its approval by the Court.  We
cannot opine as to whether or when a settlement  will occur or be finalized and,
consequently,  are unable at this time to  determine  whether the outcome of the
litigation will have a material impact on our results of operations or financial
condition in any future period.


                                       9
<PAGE>


On  July  3,  2003,  an  action  was  commenced  against  one of  the  Company's
subsidiaries,  Direct  Partner  Telecom,  Inc.  ("DPT").  Global  Communications
Consulting Corp. v. Michelle Nelson,  Jason White,  VLAN, Inc.,  Geoffrey Amend,
James Magruder,  Direct Partner Telecom,  Inc., et al. was filed in the Superior
Court of New Jersey,  Monmouth County, and removed to the United States District
Court for the  District of New Jersey on September  16,  2003.  Plaintiff is the
former employer of Michelle Nelson, a consultant of DPT.  Plaintiff alleges that
while  Nelson  was its  employee,  she  provided  plaintiff's  confidential  and
proprietary  trade  secret  information,   to  among  others,  DPT  and  certain
employees,  and diverted  corporate  opportunities from plaintiff to DPT and the
other named defendants. Plaintiff asserts claims against Nelson including breach
of fiduciary duty, breach of the duty of loyalty and tortious  interference with
contract.  Plaintiff  also asserts  claims against Nelson and DPT, among others,
for contractual  interference,  tortious  interference with prospective economic
advantage and  misappropriation  of proprietary  information  and trade secrets.
Plaintiff  seeks  injunctive  relief  and  damages  in  an  unspecified  amount,
including punitive damages.

The Answer to the Complaint, with counterclaims, was served on October 20, 2003,
denying  plaintiff's  allegations  of  improper  and  unlawful  conduct in their
entirety. The parties reached an amicable resolution of this matter, including a
mutual release of all claims, which was filed with the Court in April 2004.

The Company is  currently a party to certain  other legal  proceedings,  claims,
disputes and litigation  arising in the ordinary  course of business,  including
those noted above. The Company  currently  believes that the ultimate outcome of
these other  proceedings,  individually  and in the  aggregate,  will not have a
material  adverse  affect  on  the  Company's  financial  position,  results  of
operations  or  cash  flows.  However,   because  of  the  nature  and  inherent
uncertainties of litigation, should the outcome of these actions be unfavorable,
the Company's  business,  financial  condition,  results of operations  and cash
flows could be materially and adversely affected.

(6) SEGMENTS AND GEOGRAPHIC INFORMATION

The Company applies the provisions of SFAS No. 131,  "Disclosures About Segments
of an Enterprise and Related Information",  which establishes annual and interim
reporting  standards for operating segments of a company.  SFAS No. 131 requires
disclosures of selected  segment-related  financial  information about products,
major customers and geographic areas. Effective with the May 2003 acquisition of
DPT,  the Company is now  organized  in two  operating  segments for purposes of
making  operating  decisions  and  assessing  performance:  the  computer  games
division and the VoIP telephony services  division.  The computer games division
consists of the  operations of the Company's  Computer  Games print magazine and
the  associated  website  Computer  Games  Online   (www.cgonline.com)  and  the
operations of Chips & Bits,  Inc.,  its games  distribution  business.  The VoIP
telephony   services   division   is   principally   involved  in  the  sale  of
telecommunications   services   over  the  internet  to   consumers   and  other
telecommunications service providers.

The chief  operating  decision  maker  evaluates  performance,  makes  operating
decisions and allocates resources based on financial data of each segment. Where
appropriate,  the Company charges  specific costs to each segment where they can
be  identified.   Certain  items  are  maintained  at  the  Company's  corporate
headquarters  ("Corporate")  and are not  presently  allocated to the  segments.
Corporate  expenses  primarily include personnel costs related to executives and
certain  support  staff and  professional  fees.  Corporate  assets  principally
consist  of cash,  cash  equivalents  and  marketable  securities.  There are no
intersegment  sales.  The  accounting  policies of the  segments are the same as
those for the Company as a whole.


                                       10
<PAGE>


The  following  table  presents  financial  information  regarding the Company's
different segments:

                                              THREE MONTHS ENDED
                                                    MARCH 31,
                                         -----------------------------
                                             2004              2003
                                         -----------       -----------
REVENUE:

Computer games and other...........      $ 1,017,899      $  1,658,350
VoIP telephony services ...........           99,548                --
                                         -----------       -----------
                                         $ 1,117,447      $  1,658,350
                                         ===========       ===========

INCOME (LOSS) FROM OPERATIONS:
Computer games and other...........      $  (109,888)     $     19,409
VoIP telephony services ...........       (2,128,367)           (8,448)
Corporate expenses.................       (1,539,815)         (554,386)
                                         -----------       -----------
   Loss from operations                   (3,778,070)         (543,425)
   Other expense, net                       (883,628)         (138,322)
                                         -----------       -----------
   Consolidated loss before income
     tax benefit                         $(4,661,698)     $   (681,747)
                                         ===========       ===========

DEPRECIATION AND AMORTIZATION:
Computer games and other...........      $     3,429      $     22,105
VoIP telephony services ...........          226,770               179
Corporate expenses.................            5,912               541
                                         -----------       -----------
                                         $   236,111      $     22,825
                                         ===========       ===========



                                           MARCH 31,       DECEMBER 31,
                                             2004              2003
                                         -----------       -----------
IDENTIFIABLE ASSETS:
Computer games and other...........      $ 1,827,307      $  1,957,714
VoIP telephony services ...........        5,001,618         4,251,082
Corporate assets...................       25,824,330           963,282
                                         -----------       -----------
                                         $32,653,255      $  7,172,078
                                         ===========       ===========



(7) COMMITMENTS

As of March 31,  2004,  the Company  had  approximately  $20,000 in  outstanding
standby  letters  of  credit  used to  support  the  agreement  with  one of our
telecommunications carriers.


                                       11
<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OR PLAN OF OPERATION

                           FORWARD LOOKING STATEMENTS

The following  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations or Plan of Operation contains "forward-looking statements"
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These forward-looking  statements can be
identified  by  the  use  of   predictive,   future-tense   or   forward-looking
terminology, such as "believes," "anticipates," "expects," "estimates," "plans,"
"may,"  "intends,"  "will," or similar  terms.  Investors are cautioned that any
forward-looking  statements are not guarantees of future performance and involve
significant  risks  and  uncertainties,  and  that  actual  results  may  differ
materially from those projected in the forward-looking statements as a result of
various factors described under "Risk Factors" and elsewhere in this report. The
following   discussion   should  be  read  together  in  conjunction   with  the
accompanying  unaudited condensed  consolidated financial statements and related
notes thereto and the audited  consolidated  financial  statements  and notes to
those  statements  contained  in the Annual  Report on Form  10-KSB for the year
ended December 31, 2003.

                          OVERVIEW OR PLAN OF OPERATION

As of March 31,  2004,  we  managed  two  primary  lines of  business.  One line
consists of our  historical  network of three wholly owned  businesses,  each of
which  specializes in the games  business by delivering  games  information  and
selling games in the United States and abroad.  These  businesses are: our print
publication   Computer  Games  Magazine;   our  Computer  Games  Online  website
(www.cgonline.com),  which is the online counterpart to Computer Games Magazine;
and our  Chips & Bits,  Inc.  (www.chipsbits.com)  games  distribution  company.
Management  of the Company  continues to actively  explore a number of strategic
alternatives for its online and offline games properties,  including  continuing
to operate the properties, acquisition or development of complementary products,
or selling some or all of the games properties.

The second line of business,  Voice over Internet  Protocol  ("VoIP")  telephony
services,  includes  voiceglo  Holdings,  Inc.,  a  wholly-owned  subsidiary  of
theglobe.com  that offers VoIP web-based,  home and business phone service.  The
term "VoIP" refers to a category of hardware and software that enables people to
use the Internet to make phone calls.  We entered the VoIP business by acquiring
certain  software  assets  in  November  2002  from an  entrepreneur  who is now
employed by us. Today those assets  serve as the  foundation  of the products we
offer and market under the brand name,  "voiceglo." The VoIP telephony  services
division also includes Direct Partner Telecom,  Inc.  ("DPT"),  an international
licensed telecommunications carrier which was engaged in the purchase and resale
of  telecommunications  services over the Internet.  DPT was acquired on May 28,
2003.  In the first  quarter of 2004,  we decided  to  suspend  DPT's  wholesale
business and dedicate  the DPT  physical and  intellectual  assets to our retail
VoIP business, "voiceglo".

At the current time, our revenues are derived principally from the sale of print
advertisements  under  short-term  contracts in our games  information  magazine
Computer  Games;  through  the sale of our games  information  magazine  through
newsstands  and  subscriptions;  and through the sale of video games and related
products through our games distribution  business Chips & Bits, Inc. Given their
recent  launch,  our voiceglo VoIP products and services have yet to produce any
significant revenue.

                                OUR VOIP BUSINESS

During the third  quarter  of 2003,  the  Company  launched  its first  suite of
consumer and business  level VoIP services.  These services allow  consumers and
enterprises  to  communicate  using VoIP  technology  for  dramatically  reduced
pricing  compared to  traditional  telephony  networks.  The services also offer
traditional  telephony  features such as voicemail,  caller ID, call forwarding,
and call waiting for no additional cost to the consumer,  as well as incremental
services  that are not  currently  supported  by the public  switched  telephone
network  ("PSTN")  like the ability to use numbers  remotely  and voice to email
services.

The Company now offers two primary types of VoIP services, on a retail basis, to
individual consumers and small businesses:

o  Browser-Based  - a full  functioning  telephone  that resides on the computer
desktop and also includes a web-based solution. The only system requirements are
a browser and an Internet connection. The Company is seeking a patent to protect
its position. The browser-based product is marketed under the name "GloPhone".

o SIP Based Soft Phone - a traditional phone line replacement service.  Requires
a voiceglo  adapter,  a regular  phone and an Internet  connection.  The service
works on broadband,  dial-up and wi-fi Internet connections and can be used with
a USB phone directly over a user's computer if desired.

Our VoIP  products  are  subject to  continuing  development  by the Company and
management continues to evaluate its business plans for these proposed services.
As discussed further in the "Liquidity and Capital  Resources" section below, we
expect to utilize  substantial capital in fully launching and expanding our VoIP
operations.  In addition, there are a number of significant risks to entry into,
and the conduct of business  in, this  market,  including  current and  proposed
governmental  regulation,  potential  taxation of services and many of the risks
detailed below under "Risk Factors."


                                       12
<PAGE>


                              RESULTS OF OPERATIONS

The nature of the businesses  being  conducted by us has  significantly  changed
from March 31, 2003  compared to March 31, 2004.  As a result of our decision to
enter into the VoIP business we have incurred  substantial  expenditures without
corresponding  revenue as we develop  our VoIP  product  line and as we put into
place the infrastructure for our VoIP products. Consequently, and primarily as a
result of these  factors,  the results of operation  for the quarter ended March
31, 2004 are not necessarily comparable to the quarter ended March 31, 2003.

THREE MONTHS  ENDED MARCH 31, 2004  COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2003

NET REVENUE.  Net revenue  totaled $1.1 million for the first quarter of 2004 as
compared to $1.7 million in the same quarter of the prior year. The $0.6 million
decline  in total  net  revenue  was  primarily  attributable  to  decreases  in
advertising,  magazine  sales,  and electronic  commerce net revenue,  partially
offset by net revenue generated by our VoIP telephony services division.

Advertising revenue from the sale of print  advertisements in our games magazine
was $0.4 million,  or 34%, of total net revenue for the three months ended March
31, 2004 versus $0.5 million,  or 33%, of total net revenue for the three months
ended March 31, 2003. .

Net revenue  attributable to the sale of our games information magazine was $0.4
million, or 35%, of total net revenue for the three months ended March 31, 2004,
as compared to $0.7 million, or 42%, of total net revenue in the same quarter of
the prior year.  The decline in net revenue from the sale of our games  magazine
as compared to the previous  year was  primarily the result of a decrease in the
circulation base of our games magazine.  As rates for print advertising  charged
to advertisers  are driven largely by the  circulation of the  publication,  the
decline in the  circulation  base of our games magazine has also  contributed to
the decrease in our advertising revenue.

Electronic  commerce and other net revenue is principally  comprised of sales of
video games and related  products  through Chips & Bits,  Inc. Sales through the
online store  accounted for $0.2  million,  or 22%, of total net revenue for the
first quarter of 2004 as compared to $0.4 million,  or 25%, of total net revenue
for the same period of 2003. The $0.2 million  decrease was primarily the result
of advances in and  releases of console and online  games,  which  traditionally
have less sales loyalty to our online store,  coupled with the continued decline
in the number of major PC game  releases,  on which our online  store relies for
the majority of sales. In addition, an increasing number of major retailers have
increased the selection of video games offered by both their traditional "bricks
and mortar"  locations and their online  commerce  sites  resulting in increased
competition.

Net revenue from  telephony  services  totaled $0.1 million for the three months
ended March 31, 2004.  During the first quarter of 2004, the Company focused its
efforts  on  the  promotion  of its  recently  released  browser-based  GloPhone
product.  In  particular,  we initiated  several  promotional  campaigns for our
"free"  GloPhone  product  as a means of  educating  consumers  to gain  greater
customer  acceptance of our VoIP products.  We believe that as customers  become
more  familiar  with our VoIP  technology,  demand  for our  revenue  generating
products will increase.

COST OF PRODUCTS AND PUBLICATIONS  SOLD. Cost of products and publications  sold
related to our games division consists  primarily of printing costs of our games
magazine,  Internet  connection charges,  personnel costs,  maintenance costs of
website  equipment  and the  costs  of  merchandise  sold and  shipping  fees in
connection with our online store.  Cost of products and publications sold by our
games division totaled  approximately $0.6 million and $0.8 million in the first
quarter of 2004 and 2003,  respectively.  The gross margin of our games division
approximated  42% for the three  months  ended March 31, 2004 as compared to 49%
for the same  quarter of the prior year.  Approximately  7% of the total cost of
products sold for the first quarter of 2004 consisted of customer  equipment and
shipping costs related to the sale of our voiceglo VoIP service.

DATA  COMMUNICATIONS,  TELECOM AND NETWORK  OPERATIONS.  This  expense  category
relates  entirely  to the  Company's  entry into the VoIP  business  in 2003 and
includes  termination and circuit costs related to our retail telephony services
business marketed under the voiceglo brand name.  Personnel and consulting costs
incurred in support of the  Company's  Internet  telecommunications  network are
also included in this expense category. Data communications, telecom and network
operations  expenses are expected to increase in the future as we further expand
our data  communications  network  and  expand  our  telecommunications  carrier
relationships in order to support the Company's voiceglo product line.


                                       13
<PAGE>


SALES AND MARKETING.  Sales and marketing expenses consist primarily of salaries
and related expenses of sales and marketing personnel, commissions,  advertising
and marketing  costs,  public  relations  expenses,  promotional  activities and
barter expenses.  Sales and marketing expenses totaled $1.1 million in the first
quarter of 2004 as  compared  to $0.6  million in the first  quarter of 2003.  A
decline of $0.2 million in sales and  marketing  expenses  incurred by our games
division was more than offset by $0.7 million of sales and marketing expenses of
the VoIP telephony services division.  Sales and marketing expenses of the games
division represented  approximately 34% of total net revenue attributable to the
games  division's  operations  for  both the  first  quarter  of 2004 and  2003,
respectively.  Advertising and promotions expenses, coupled with personnel costs
were the  principal  components  of sales  and  marketing  expenses  of the VoIP
telephony services division during the first quarter of 2004.

PRODUCT  DEVELOPMENT.  Product development expenses include salaries and related
personnel  costs;  expenses  incurred in  connection  with website  development,
testing and upgrades;  editorial and content  costs;  and costs  incurred in the
development of our voiceglo branded products.  Product development expenses were
$0.2 million in both the first quarters of 2004 and 2003.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist
primarily  of  salaries  and  related  personnel  costs  for  general  corporate
functions including finance,  human resources and facilities,  outside legal and
professional  fees,  directors  and officers  insurance,  bad debt  expenses and
general corporate overhead costs. General and administrative  expenses were $2.1
million for the three months  ended March 31, 2004,  as compared to $0.6 million
for the same quarter of 2003. Increases in headcount and the resulting personnel
expenses,  as  well  as  other  general  and  administrative  expenses  directly
attributable  to our new line of business,  VoIP  telephony  services,  were the
principal factors contributing to the $1.5 million increase in total general and
administrative expenses. Other expense categories which increased as compared to
2003 largely as a result of our entrance into the VoIP business,  included legal
fees, other professional fees and facilities costs.

DEPRECIATION.  Depreciation  expense  totaled  $0.2 million for the three months
ended  March 31,  2004.  The  increase  from the same  quarter of the prior year
resulted   principally  from  the  investment  in  network   infrastructure  and
capitalized software costs of the VoIP telephony services division.

INTEREST  EXPENSE,  NET. On February 2, 2004,  our Chairman and Chief  Executive
Officer and his spouse,  entered into a Note Purchase Agreement with the Company
pursuant  to which  they  acquired  a demand  convertible  promissory  note (the
"Bridge  Note")  in the  aggregate  principal  amount  of  $2,000,000.  Non-cash
interest  expense of $0.7  million  was  recorded  in the first  quarter of 2004
related to the  beneficial  conversion  feature of the Bridge Note as the Bridge
Note was  convertible  into our Common  Stock at a price  below the fair  market
value of our Common Stock (for accounting purposes),  based on the closing price
of our Common Stock as reflected on the OTCBB on the issuance date of the Note.

OTHER INCOME  (EXPENSE),  NET.  Other expense for the first quarters of 2004 and
2003 principally  represents  additional  reserves against the amounts loaned by
the Company to a development stage Internet related business venture.

INCOME  TAXES.  No tax benefit was recorded for the three months ended March 31,
2004. Due to the uncertainty  surrounding the timing or ultimate  realization of
the benefits of our net operating loss carryforwards in future periods,  we have
recorded a 100% valuation allowance against our otherwise  recognizable deferred
tax  assets.   At  December  31,  2003,  the  Company  had  net  operating  loss
carryforwards  available for U.S. and foreign tax purposes of approximately $144
million.  These  carryforwards  expire  through 2023. The Tax Reform Act of 1986
imposes substantial  restrictions on the utilization of net operating losses and
tax credits in the event of an "ownership  change" of a corporation.  Due to the
change in our ownership  interests in August 1997 and May 1999 and the Company's
recently  completed  private  offering in March 2004 (together with the exercise
and conversion of various  securities in connection with such private offering),
as defined in the  Internal  Revenue Code of 1986,  as amended,  the Company may
have  substantially  limited or eliminated the availability of its net operating
loss  carryforwards.  There can be no assurance that the Company will be able to
avail itself of any net operating loss carryforwards.


                         LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW ITEMS.  As of March 31, 2004,  we had  approximately  $26.4 million in
cash and cash  equivalents  as compared to $1.1 million as of December 31, 2003.
Net cash used in operating activities was $3.6 million and $0.2 million, for the
three months ended March 31, 2004 and 2003,  respectively.  The period-to-period
increase in net cash used in operating  activities  resulted  primarily from the
increase in our net operating  losses,  partially offset by the favorable impact
of non-cash  interest  expense  recorded in the first three  months of 2004 as a
result of the beneficial conversion feature of the $2,000,000 Bridge Note issued
in February 2004, as well as other non-cash charges recorded in 2004.

Net cash of $0.2 million was used in investing activities during the first three
months of 2004.  We incurred  $0.3  million in capital  expenditures  during the
first  three  months  of 2004,  primarily  within  the VoIP  telephony  services
division.  Additionally,  in  February  2003,  we  committed  to fund  operating
expenses of a development  stage Internet  venture at our discretion in the form
of a loan. During both the first quarters of 2004 and 2003,  approximately  $0.1
million of funds were advanced to the venture.  Partially  offsetting these uses
of funds in the first three  months of 2004 were $0.2  million in proceeds  from
the sale of marketable securities.


                                       14
<PAGE>


Net cash provided by financing  activities was $29.2 million for the first three
months  of  2004.  As  discussed  below  and  in  the  Notes  to  the  condensed
consolidated  financial statements,  the Company completed a private offering of
its  Common  Stock and  warrants  to  acquire  its  Common  Stock in March  2004
resulting in the issuance of approximately  33.4 million shares of Common Stock,
and warrants to acquire  approximately  16.7 million shares of its Common Stock,
for gross proceeds of approximately $28.4 million.  Offering costs included $1.2
million in cash commissions paid to the placement agent and  approximately  $0.1
million in legal and  accounting  fees.  In addition,  on February 2, 2004,  the
Company issued a $2,000,000  Bridge Note which was  subsequently  converted into
our Common Stock in connection with the March 2004 private offering. Proceeds of
approximately  $0.1 million  were  received  from the exercise of stock  options
during the first quarter of 2004. Cash provided by financing  activities  during
the three  months  ended  March 31,  2003,  resulted  from the  issuance of $0.5
million in Series F Convertible Preferred Stock.

CAPITAL  TRANSACTIONS.  As  mentioned  previously,  on  February  2,  2004,  the
Company's  Chairman and Chief Executive  Officer and his spouse,  entered into a
Note  Purchase  Agreement  with the Company  pursuant  to which they  acquired a
demand  convertible  promissory  note  in  the  aggregate  principal  amount  of
$2,000,000.  The Bridge Note was convertible into shares of the Company's Common
Stock.  The Bridge  Note  provided  for  interest at the rate of ten percent per
annum and was  secured  by a pledge of  substantially  all of the  assets of the
Company.  Such  security  interest was shared with the holders of the  Company's
$1,750,000  Convertible  Notes  issued  to  E&C  Capital  Partners  and  certain
affiliates  of our  Chairman  and Chief  Executive  Officer.  In  addition,  the
Chairman and Chief  Executive  Officer and his spouse were issued a warrant (the
"Warrant")  to  acquire  204,082  shares  of the  Company's  Common  Stock at an
exercise price of $1.22 per share.  The Warrant is exercisable at any time on or
before  February 2, 2009. The exercise  price of the Warrant,  together with the
number of shares for which such Warrant is exercisable, is subject to adjustment
upon the occurrence of certain events.

In March 2004,  theglobe.com  completed a private offering of 333,816 units (the
"Units") for a purchase  price of $85 per Unit (the  "Private  Offering").  Each
Unit  consisted of 100 shares of the Company's  Common  Stock,  $0.001 par value
(the "Common Stock"),  and warrants to acquire 50 shares of the Company's Common
Stock (the "Warrants").  The Warrants are exercisable for a period of five years
commencing  60 days after the initial  closing at an initial  exercise  price of
$0.001 per share.  The aggregate  number of shares of Common Stock issued in the
Private  Offering  was  33,381,647  shares  for an  aggregate  consideration  of
$28,374,400,  or  approximately  $0.57 per share  assuming  the  exercise of the
16,690,824 Warrants.

The purpose of the Private  Offering was to raise funds for use primarily in the
Company's  developing  voiceglo business,  including the deployment of networks,
website  development,  marketing  and capital  infrastructure  expenditures  and
working capital. Proceeds may also be used in connection with our other existing
or future business operations.

Halpern Capital,  Inc., acted as placement agent for the Private  Offering,  and
was paid a commission of $1.2 million and issued a warrant to acquire  1,000,000
shares of Common Stock at $0.001 per share.

The securities  offered were not registered under the Securities Act of 1933 and
may not be offered  or resold in the United  States  absent  registration  or an
applicable exemption from such registration requirements.  Pursuant to the terms
of the Private Offering,  the Company filed a registration statement relating to
the resale of the Securities on April 16, 2004 which became effective on May 11,
2004.  Most of our investors  from prior capital raises also elected to register
their shares for resale on a "piggy-back"  basis  pursuant to that  registration
statement.

In connection with the Private  Offering,  Michael S. Egan, our Chairman,  Chief
Executive  Officer  and  principal  stockholder,  together  with  certain of his
affiliates, including E&C Capital Partners, converted the $2,000,000 Convertible
Bridge Note,  $1,750,000 of Secured  Convertible  Notes and all of the Company's
outstanding  shares of Series F Preferred  Stock, and exercised (on a "cashless"
basis) all of the  warrants  issued in  connection  with the  foregoing  Secured
Convertible  Notes and Series F Preferred Stock,  together with certain warrants
issued to Dancing Bear  Investments,  an  affiliate of Mr. Egan.  As a result of
such  conversions  and exercises,  the Company issued an aggregate of 48,775,909
additional shares of Common Stock.

FUTURE  CAPITAL  NEEDS.  In order to offer our VoIP  services  we have  invested
substantial capital and made substantial  commitments related to the development
of the  voiceglo  network  and  telephony  handsets  and related  adapters.  The
voiceglo  network is  comprised of switching  hardware  and  software,  servers,
billing and inventory systems, and  telecommunication  carrier services.  We own
and  operate  VoIP  switch  equipment  in  Miami,  Atlanta  and  New  York,  and
interconnect  these  switches  utilizing  a  leased  transport  network  through
numerous carrier  agreements with third party  providers.  Through these carrier
relationships  we are  able to  carry  the  traffic  of our  customers  over the
Internet and interact  with the PSTN.  We generally  enter into from one to five
year  agreements  with  these  carriers  pursuant  to  which,  in  exchange  for
allocating  and  dedicating  availability  on their  networks,  we  undertake to
provide minimum usage of these networks.  In general,  the larger our commitment
the  lower  our per  minute  cost of  usage of the  network.  Given  the  recent
introduction of our voiceglo service  offerings,  our minimum  commitments under
these carrier agreements presently greatly exceed our actual usage.

Based upon our existing contractual commitments,  we anticipate that our capital
needs for our network  over the next  twelve  months  will be  substantially  as
follows:


                                       15
<PAGE>


      o Planned network hardware expenditures for switching and server equipment
are projected to be approximately $1.5 - $2.0 million;

      o Planned network software  expenditures are projected to be approximately
$300,000; and

      o Planned carrier transport and interconnection  services are projected to
be approximately $3.5 million.


We have entered into a contract with a supplier for telephony  handsets  related
to our VoIP services. Subject to the supplier's compliance with the terms of the
contract,  we have committed to purchase additional equipment from this supplier
during 2004  totaling  approximately  $3.4 million.  In addition,  we anticipate
acquiring  other  non-network  VoIP  equipment  of  approximately  $1.0  to $2.0
million.

As a result  of the  proceeds  raised  from our  March  2004  private  offering,
management  does not  presently  anticipate  that the Company will need to raise
additional  funds  within at least the next twelve  months in order to implement
its  business  plans  for its  existing  businesses.  However,  there  can be no
assurance  that the capital  needs of the Company will not change,  that we will
not enter into additional lines of business or that forecasted expenses will not
substantially exceed our expectations. In any of such events, we may be required
to raise additional  capital.  We currently have no access to credit  facilities
with traditional third party lenders and there can be no assurance that we would
be able to raise any such  capital.  In addition,  any  financing  that could be
obtained would likely significantly dilute existing stockholders.

The shares of our Common Stock were delisted from the NASDAQ  national market in
April 2001 and are now traded in the over-the-counter market on what is commonly
referred to as the electronic bulletin board or OTCBB. The trading volume of our
shares has dramatically  declined since the delisting.  In addition,  we are now
subject to a Rule promulgated by the Securities and Exchange Commission that, if
we fail to meet criteria set forth in such Rule,  various practice  requirements
are  imposed  on  broker-dealers  who sell  securities  governed  by the Rule to
persons other than  established  customers and accredited  investors.  For these
types  of  transactions,  the  broker-dealer  must  make a  special  suitability
determination  for the  purchaser  and have  received  the  purchaser's  written
consent to the  transactions  prior to sale.  Consequently,  the Rule may have a
materially  adverse  effect  on  the  ability  of  broker-dealers  to  sell  the
securities,  which may materially affect the ability of shareholders to sell the
securities  in the  secondary  market.  Consequently,  it has also  made it more
difficult for us to raise additional capital,  although the Company has had some
success in offering its  securities  as  consideration  for the  acquisition  of
various business  opportunities  or assets.  We will also incur additional costs
under state blue sky laws if we sell equity due to our delisting.

                              EFFECTS OF INFLATION

Due to  relatively  low levels of inflation in 2004 and 2003,  inflation has not
had a significant effect on our results of operations since inception.

      MANAGEMENT'S DISCUSSION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The  preparation  of our  financial  statements in  conformity  with  accounting
principles  generally  accepted in the United  States of America  requires us to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period.  Our estimates,  judgments and assumptions are continually
evaluated based on available  information and experience.  Because of the use of
estimates  inherent in the financial  reporting  process,  actual  results could
differ from those estimates.

Certain of our  accounting  policies  require  higher  degrees of judgment  than
others in their  application.  These include revenue  recognition,  valuation of
customer receivables, impairment of intangible assets and income tax recognition
of  deferred  tax  items.  Our  policies  and  related  procedures  for  revenue
recognition,  valuation  of  customer  receivables,  capitalization  of computer
software costs and intangible assets are summarized below.

                               REVENUE RECOGNITION

The  Company's  revenues  were  derived  principally  from  the  sale  of  print
advertisements  under  short-term  contracts in our games  information  magazine
Computer  Games;  through  the sale of our games  information  magazine  through
newsstands and subscriptions;  from the sale of video games and related products
through  our  online  store  Chips & Bits;  and from the sale of VoIP  telephony
services.  There is no certainty  that events  beyond  anyone's  control such as
economic  downturns or significant  decreases in the demand for our services and
products will not occur and accordingly, cause significant decreases in revenue.

The Company's games division participates in barter transactions. Barter revenue
and  expenses  are  recorded  at the fair market  value of services  provided or
received,  whichever is more readily determinable in the circumstances.  Revenue
from barter  transactions is recognized as income when  advertisements  or other
products are delivered by the Company.  Barter  expense is  recognized  when the
Company's  advertisements  are run on  other  companies'  web  sites or in their
magazines,  which  typically  occurs within one to six months from the period in
which the related barter revenue is recognized.


                                       16
<PAGE>


Advertising.  Advertising  revenues  for  the  games  information  magazine  are
recognized at the on-sale date of the magazine.

Magazine Sales. Newsstand sales of the games information magazine are recognized
at the on-sale date of the magazine,  net of provisions  for estimated  returns.
Subscriptions  are  recorded as deferred  revenue  when  initially  received and
recognized as income ratably over the subscription term.

Electronic  Commerce and Other.  Sales from the online store are  recognized  as
revenue when the product is shipped to the customer. Amounts billed to customers
for  shipping and  handling  charges are  included in net  revenue.  The Company
provides an allowance for returns of merchandise  sold through its online store.
The allowance provided to date has not been significant.

Telephony  Services.  VoIP telephony services revenue represents fees charged to
customers  for voice  services  and is  recognized  based on minutes of customer
usage or as services are  provided.  The Company  records  payments  received in
advance for prepaid  services as deferred revenue until the related services are
provided. Sales of peripheral VoIP telephony equipment are recognized as revenue
when the product is shipped to the  customer.  Amounts  billed to customers  for
shipping and handling charges are included in net revenue.


                        VALUATION OF CUSTOMER RECEIVABLES

Provisions for the allowance for doubtful  accounts are made based on historical
loss experience  adjusted for specific credit risks.  Measurement of such losses
requires  consideration of the Company's  historical loss experience,  judgments
about  customer  credit  risk,  and the  need to  adjust  for  current  economic
conditions.


                    CAPITALIZATION OF COMPUTER SOFTWARE COSTS

The Company  capitalizes  the cost of  internal-use  software which has a useful
life in excess of one year in  accordance  with  Statement of Position No. 98-1,
"Accounting  for the  Costs of  Computer  Software  Developed  or  Obtained  for
Internal Use." Subsequent additions,  modifications, or upgrades to internal-use
software  are  capitalized  only to the extent  that they allow the  software to
perform a task it previously did not perform.  Software maintenance and training
costs  are  expensed  in the  period  in which  they are  incurred.  Capitalized
computer software costs are amortized using the straight-line  method over three
years.


                                INTANGIBLE ASSETS

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 141, "Business  Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that
certain acquired  intangible  assets in a business  combination be recognized as
assets  separate  from  goodwill.  SFAS No. 142 requires that goodwill and other
intangibles  with  indefinite  lives should no longer be  amortized,  but rather
tested for impairment annually or on an interim basis if events or circumstances
indicate  that the fair  value of the asset  has  decreased  below its  carrying
value.

Our policy calls for the assessment of the potential  impairment of goodwill and
other  identifiable  intangibles  whenever  events or changes  in  circumstances
indicate that the carrying value may not be recoverable or at least on an annual
basis.  Some factors we consider  important  which could  trigger an  impairment
review include the following:

o Significant  under-performance  relative to historical,  expected or projected
future operating results;

o  Significant  changes in the manner of our use of the  acquired  assets or the
strategy for our overall business; and

o Significant negative industry or economic trends.

When we  determine  that the  carrying  value of  goodwill  or other  identified
intangibles  may not be  recoverable,  we  measure  any  impairment  based  on a
projected  discounted  cash flow method using a discount rate  determined by our
management to be  commensurate  with the risk  inherent in our current  business
model.


                                       17
<PAGE>


                                  RISK FACTORS

In addition to the other  information  in this  report,  the  following  factors
should be carefully considered in evaluating our business and prospects.

RISKS RELATING TO OUR BUSINESS GENERALLY

WE HAVE A HISTORY OF OPERATING LOSSES AND EXPECT TO CONTINUE TO INCUR LOSSES.

Since our  inception,  we have incurred net losses in each  quarter,  except the
fourth  quarter  of 2002 where we had net income of  approximately  $17,000.  We
expect that we will continue to incur net losses for the foreseeable  future. We
had net losses of approximately $11 million and $2.6 million for the years ended
December 31, 2003 and 2002, respectively, and approximately $4.7 million for the
first quarter of 2004. The principal causes of our losses are likely to continue
to be:

o costs resulting from the operation of our businesses;

o costs relating to entering new business lines;

o failure to generate sufficient revenue; and

o general and administrative expenses.

Although we have  restructured  our  businesses,  we still expect to continue to
incur  losses as we develop our VoIP  telephony  services  business and while we
explore a number of  strategic  alternatives  for our online and  offline  games
properties,  including  continuing  to operate the  properties,  acquisition  or
development of additional businesses or complementary products,  selling some or
all of the properties or other changes to our business.

OUR  RECENT  ACQUISITIONS,  AS  WELL AS  POTENTIAL  FUTURE  ACQUISITIONS,  JOINT
VENTURES OR STRATEGIC  TRANSACTIONS ENTAIL NUMEROUS RISKS AND UNCERTAINTIES.  WE
MAY ENTER ADDITIONAL LINES OF BUSINESS.

We have entered into a new business line, VoIP telephony  services.  In November
2002,  we acquired  certain  VoIP assets from an  entrepreneur  in exchange  for
1,750,000  warrants to purchase our common  stock.  On May 28, 2003, we acquired
Direct   Partner   Telecom,    Inc.   ("DPT"),    an   international    licensed
telecommunications   carrier   engaged   in   the   purchase   and   resale   of
telecommunication  services  over the  Internet.  We may also  enter into new or
different  lines of  business,  as  determined  by  management  and our Board of
Directors.  The  acquisitions  of VoIP  assets and of DPT, as well as any future
acquisitions or joint ventures could result, and in some instances have resulted
(particularly  as it pertains  to DPT),  in  numerous  risks and  uncertainties,
including:

o potentially  dilutive issuances of equity  securities,  which may be issued at
the time of the  transaction  or in the future if certain  performance  or other
criteria are met or not met, as the case may be. These  securities may be freely
tradable  in the public  market or subject to  registration  rights  which could
require us to publicly register a large amount of Common Stock, which could have
a material adverse effect on our stock price;

o  diversion  of   management's   attention  and  resources  from  our  existing
businesses;

o significant  write-offs if we determine that the business acquisition does not
fit or perform up to expectations;

o the  incurrence  of debt and  contingent  liabilities  or  impairment  charges
related to goodwill and other intangible assets;

o  difficulties  in the  assimilation  of operations,  personnel,  technologies,
products and information systems of the acquired companies;

o the risks of entering a new or different line of business;

o regulatory and tax risks relating to the new or acquired business;

o the risks of entering  geographic and business  markets in which we have no or
limited prior experience; and

o the risk that the acquired business will not perform as expected.


                                       18
<PAGE>


WE DEPEND ON THE  CONTINUED  GROWTH IN THE USE AND  COMMERCIAL  VIABILITY OF THE
INTERNET.

Our VoIP telephony  services  business and games  properties  are  substantially
dependent upon the continued growth in the general use of the Internet. Internet
and  electronic  commerce  growth  may be  inhibited  for a number  of  reasons,
including:

o inadequate network infrastructure;

o security and authentication concerns;

o inconsistent quality of service;

o inadequate availability of cost-effective, high-speed service; and

o inadequate bandwidth availability.

As web usage grows, the Internet  infrastructure  may not be able to support the
demands  placed on it by this  growth or its  performance  and  reliability  may
decline. Websites have experienced interruptions in their service as a result of
outages  and  other   delays   occurring   throughout   the   Internet   network
infrastructure.  If these outages or delays frequently occur in the future,  web
usage,  as well as usage of our  services,  could grow more  slowly or  decline.
Also, the Internet's commercial viability may be significantly hampered due to:

o delays in the development or adoption of new operating and technical standards
and performance improvements required to handle increased levels of activity;

o increased government regulation;

o potential governmental taxation of such services; and

o insufficient availability of telecommunications services which could result in
slower response times and adversely affect usage of the Internet.

WE MAY FACE INCREASED GOVERNMENT REGULATION, TAXATION AND LEGAL UNCERTAINTIES IN
OUR INDUSTRY, WHICH COULD HARM OUR BUSINESS.

There are an  increasing  number of federal,  state,  local and foreign laws and
regulations  pertaining to the Internet and  telecommunications.  In addition, a
number of federal, state, local and foreign legislative and regulatory proposals
are under consideration.  Laws or regulations may be adopted with respect to the
Internet  relating to, among other things,  fees and taxation of VoIP  telephony
services,  liability for  information  retrieved  from or  transmitted  over the
Internet,  online content  regulation,  user privacy and quality of products and
services.  Changes in tax laws relating to electronic  commerce could materially
affect  our  business,   prospects  and  financial  condition.   Moreover,   the
applicability  to the  Internet  of  existing  laws  governing  issues  such  as
intellectual property ownership and infringement,  copyright,  trademark,  trade
secret,  obscenity,  libel,  employment  and personal  privacy is uncertain  and
developing.   Any  new   legislation  or  regulation,   or  the  application  or
interpretation  of existing laws or regulations,  may decrease the growth in the
use of the Internet or VoIP telephony services, may impose additional burdens on
electronic  commerce or may alter how we do  business.  This could  decrease the
demand  for our  existing  or  proposed  services,  increase  our  cost of doing
business,  increase the costs of products sold through the Internet or otherwise
have a material  adverse effect on our business,  plans,  prospects,  results of
operations and financial condition.

Our ability to offer VoIP services outside the U.S. is also subject to the local
regulatory environment, which may be complicated and often uncertain. Regulatory
treatment of Internet telephony outside the United States varies from country to
country.

WE RELY ON INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS.

We regard  substantial  elements of our websites and underlying  technology,  as
well as certain assets relating to our VoIP business and other  opportunities we
are  investigating,  as  proprietary  and attempt to protect  them by relying on
intellectual  property laws and  restrictions  on disclosure.  We also generally
enter into  confidentiality  agreements with our employees and  consultants.  In
connection with our license agreements with third parties,  we generally seek to
control  access to and  distribution  of our  technology  and other  proprietary
information.  Despite these precautions, it may be possible for a third party to
copy  or  otherwise   obtain  and  use  our  proprietary   information   without
authorization or to develop similar  technology  independently.  Thus, we cannot
assure  you  that  the  steps  taken  by us  will  prevent  misappropriation  or
infringement of our proprietary information,  which could have an adverse effect
on our business. In addition,  our competitors may independently develop similar
technology,  duplicate our products,  or design around our intellectual property
rights.


                                       19
<PAGE>


We  pursue  the  registration  of  our  trademarks  in  the  United  States  and
internationally.  We are also seeking patent  protection for certain VoIP assets
which we acquired or which we have developed.  However,  effective  intellectual
property  protection may not be available in every country in which our services
are distributed or made available  through the Internet.  Policing  unauthorized
use of our proprietary information is difficult. Legal standards relating to the
validity,  enforceability  and  scope of  protection  of  proprietary  rights in
Internet-related  businesses  are also uncertain and still  evolving.  We cannot
assure you about the future viability or value of any of our proprietary rights.

Litigation may be necessary in the future to enforce our  intellectual  property
rights or to  determine  the  validity  and scope of the  proprietary  rights of
others.  However,  we may not have  sufficient  funds or personnel to adequately
litigate or otherwise protect our rights. Furthermore, we cannot assure you that
our business activities will not infringe upon the proprietary rights of others,
or that other parties will not assert  infringement claims against us, including
claims related to providing  hyperlinks to websites operated by third parties or
providing  advertising  on a keyword  basis that links a  specific  search  term
entered by a user to the  appearance  of a particular  advertisement.  Moreover,
from time to time, third parties may assert claims of alleged infringement by us
of their  intellectual  property rights.  Any litigation claims or counterclaims
could impair our business because they could:

o be time-consuming;

o result in significant costs;

o subject us to significant liability for damages;

o result in invalidation of our proprietary rights;

o divert management's attention;

o cause product release delays; or

o require us to redesign  our  products  or require us to enter into  royalty or
licensing  agreements that may not be available on terms acceptable to us, or at
all.

We license from third parties various technologies  incorporated into our sites.
We cannot assure you that these third-party technology licenses will continue to
be available to us on commercially  reasonable  terms.  Additionally,  we cannot
assure you that the third parties from which we license our  technology  will be
able  to  defend  our  proprietary   rights   successfully   against  claims  of
infringement.  As a result,  our  inability  to obtain  any of these  technology
licenses  could  result in  delays  or  reductions  in the  introduction  of new
services or could  adversely  affect the  performance  of our existing  services
until equivalent technology can be identified, licensed and integrated.

The regulation of domain names in the United States and in foreign countries may
change.  Regulatory bodies could establish additional top-level domains, appoint
additional  domain name registrars or modify the requirements for holding domain
names,  any or all of which may dilute  the  strength  of our names.  We may not
acquire  or  maintain  our  domain  names in all of the  countries  in which our
websites may be accessed,  or for any or all of the top-level  domain names that
may be introduced.  The relationship between regulations  governing domain names
and laws protecting proprietary rights is unclear. Therefore, we may not be able
to prevent third parties from acquiring  domain names that infringe or otherwise
decrease the value of our trademarks and other proprietary rights.

WE MAY BE UNSUCCESSFUL IN ESTABLISHING AND MAINTAINING  BRAND  AWARENESS;  BRAND
IDENTITY IS CRITICAL TO OUR COMPANY.

Our  success in the  Internet  telephony  market  will  depend on our ability to
create and maintain brand awareness for our product offerings.  This may require
a significant amount of capital to allow us to market our products and establish
brand recognition and customer loyalty.  Many of our competitors in the Internet
telephony  services  market are larger  than us and have  substantially  greater
financial resources.  Additionally, many of the companies offering VoIP services
have already  established  their brand identity within the  marketplace.  We can
offer no assurances that we will be successful in establishing  awareness of our
brand allowing us to compete in the VoIP market.

If we fail to promote and maintain our various  brands or our games  properties'
brand  values  are  diluted,  our  businesses,   operating  results,   financial
condition,  and our ability to attract buyers for the games  properties could be
materially adversely affected. The importance of brand recognition will continue
to increase  because low barriers of entry to the industries in which we operate
may result in an increased number of direct competitors.  To promote our brands,
we may be required to continue to increase our financial  commitment to creating
and maintaining brand awareness. We may not generate a corresponding increase in
revenue to justify these costs.


                                       20
<PAGE>


OUR QUARTERLY OPERATING RESULTS FLUCTUATE.

Due to our significant change in operations, including the entry into a new line
of business,  our historical  quarterly  operating  results are not  necessarily
reflective  of  future  results.  The  factors  that will  cause  our  quarterly
operating results to fluctuate in the future include:

o acquisitions of new businesses or sales of our assets;

o declines in the number of sales or technical employees;

o the level of traffic on our websites;

o the overall demand for Internet  telephony  services,  print  advertising  and
electronic commerce;

o the addition or loss of VoIP  customers,  advertisers on our games  properties
and electronic commerce partners on our websites;

o overall usage and acceptance of the Internet;

o seasonal trends in advertising and electronic  commerce sales and member usage
in our games businesses;

o other costs relating to the maintenance of our operations;

o the restructuring of our business;

o failure to generate  significant revenues and profit margins from new products
and services; and

o competition from others providing services similar to those of ours.


OUR  LIMITED  OPERATING  HISTORY  MAKES  FINANCIAL  FORECASTING  DIFFICULT.  OUR
INEXPERIENCE IN THE INTERNET TELEPHONY BUSINESS WILL MAKE FINANCIAL  FORECASTING
EVEN MORE DIFFICULT.

We have a limited  operating  history for you to use in evaluating our prospects
and us. Our prospects should be considered in light of the risks  encountered by
companies  operating in new and rapidly  evolving  markets like ours. We may not
successfully address these risks. For example, we may not be able to:

o maintain levels of user traffic on our e-commerce websites;

o attract customers to our VoIP telephony service;

o maintain or increase sponsorship revenues for our games magazine;

o adapt to meet changes in our markets and competitive developments; and

o identify, attract, retain and motivate qualified personnel.

OUR MANAGEMENT TEAM IS  INEXPERIENCED  IN THE MANAGEMENT OF A PUBLIC COMPANY AND
IS SMALL FOR AN OPERATING COMPANY.

Our  senior  management  team is few in  number,  and other  than our  Chairman,
President  and Chief  Financial  Officer,  have not had any previous  experience
managing a public company. Only our Chairman has had experience managing a large
operating company. Accordingly, we cannot assure you that:

o our key employees will be able to work together effectively as a team;

o we will be able to retain the remaining members of our management team;

o we will be able to hire, train and manage our employee base;

o  our  systems,  procedures  or  controls  will  be  adequate  to  support  our
operations; and

o our management will be able to achieve the rapid execution  necessary to fully
exploit the market opportunity for our products and services.


                                       21
<PAGE>


WE DEPEND ON HIGHLY QUALIFIED TECHNICAL AND MANAGERIAL PERSONNEL.

Our future success also depends on our continuing ability to attract, retain and
motivate highly qualified technical expertise and managerial personnel necessary
to operate  our  businesses.  We may need to give  retention  bonuses  and stock
incentives to certain  employees to keep them, which can be costly to us. We may
be unable to  attract,  assimilate  or retain  highly  qualified  technical  and
managerial personnel in the future. Wages for managerial and technical employees
are increasing  and are expected to continue to increase in the future.  We have
from time to time in the past  experienced,  and could continue to experience in
the future if we need to hire any additional personnel, difficulty in hiring and
retaining highly skilled employees with appropriate qualifications. In addition,
we may have difficulty  attracting  qualified employees due to our restructuring
in 2000 and 2001,  financial  position and scaling down of operations.  Also, we
may have difficulty attracting qualified employees to work in the geographically
remote  location in Vermont of Chips & Bits,  Inc. and Strategy Plus, Inc. If we
were  unable to attract  and  retain  the  technical  and  managerial  personnel
necessary to support and grow our  businesses,  our  businesses  would likely be
materially and adversely affected.

OUR OFFICERS,  INCLUDING OUR CHAIRMAN AND CHIEF EXECUTIVE  OFFICER AND PRESIDENT
HAVE OTHER  INTERESTS AND TIME  COMMITMENTS;  WE HAVE CONFLICTS OF INTEREST WITH
SOME OF OUR DIRECTORS; ALL OF OUR DIRECTORS ARE EMPLOYEES OR STOCKHOLDERS OF THE
COMPANY OR AFFILIATES OF OUR LARGEST STOCKHOLDER.

Because our  Chairman and Chief  Executive  Officer,  Mr.  Michael  Egan,  is an
officer or director  of other  companies,  we have to compete for his time.  Mr.
Egan became our Chief Executive Officer effective June 1, 2002. Mr. Egan is also
the controlling investor of Dancing Bear Investments, Inc., an entity controlled
by Mr. Egan,  which is our largest  stockholder.  Mr. Egan has not  committed to
devote any specific  percentage  of his business time with us.  Accordingly,  we
compete with  Dancing  Bear  Investments,  Inc.  and Mr.  Egan's  other  related
entities for his time.

Our  President  and  Director,  Mr.  Edward A.  Cespedes,  is also an officer or
director of other  companies.  Accordingly,  we must  compete for his time.  Mr.
Cespedes is an officer or director of various  privately  held  entities  and is
also affiliated with Dancing Bear Investments.

Our  Vice  President  of  Finance  and  Director,  Ms.  Robin  Lebowitz  is also
affiliated with Dancing Bear Investments.  She is also an officer or director of
other companies or entities controlled by Mr. Egan and Mr. Cespedes.

Due to the  relationships  with his  related  entities,  Mr.  Egan  will have an
inherent  conflict of interest in making any  decision  related to  transactions
between  the  related  entities  and us.  We  intend  to  review  related  party
transactions in the future on a case-by-case basis.

WE RELY ON THIRD PARTY OUTSOURCED  HOSTING FACILITIES OVER WHICH WE HAVE LIMITED
CONTROL.

Our  principal  servers  are  located  in  Florida  and New York at third  party
outsourced hosting  facilities.  Our operations depend on the ability to protect
our systems against damage from unexpected  events,  including fire, power loss,
water damage,  telecommunications  failures and vandalism. Any disruption in our
Internet  access  could  have a  material  adverse  effect on us.  In  addition,
computer  viruses,  electronic  break-ins or other similar  disruptive  problems
could  also  materially   adversely  affect  our  businesses.   Our  reputation,
theglobe.com  brand  and the  brands  of our  VoIP  services  business  and game
properties   could  be  materially  and  adversely   affected  by  any  problems
experienced  by our  sites  or our  supporting  VoIP  network.  We may not  have
insurance to  adequately  compensate us for any losses that may occur due to any
failures or interruptions in our systems. We do not presently have any secondary
off-site systems or a formal disaster recovery plan.

HACKERS MAY ATTEMPT TO PENETRATE OUR SECURITY SYSTEM;  ONLINE SECURITY  BREACHES
COULD HARM OUR BUSINESS.

Consumer  and  supplier  confidence  in our  businesses  depends on  maintaining
relevant  security  features.  Substantial or ongoing  security  breaches on our
systems or other  Internet-based  systems could significantly harm our business.
We  incur  substantial   expenses  protecting  against  and  remedying  security
breaches.  Security breaches also could damage our reputation and expose us to a
risk  of  loss  or  litigation.   Experienced   programmers  or  "hackers"  have
successfully  penetrated  our  systems and we expect  that these  attempts  will
continue to occur from time to time.  Because a hacker who is able to  penetrate
our network  security  could  misappropriate  proprietary  information  or cause
interruptions  in our products and services,  we may have to expend  significant
capital and  resources  to protect  against or to alleviate  problems  caused by
these  hackers.  Additionally,  we may not have a timely remedy against a hacker
who is able to penetrate  our network  security.  Such security  breaches  could
materially  adversely  affect our company.  In  addition,  the  transmission  of
computer  viruses  resulting  from  hackers  or  otherwise  could  expose  us to
significant  liability.  Our  insurance  may not be adequate to reimburse us for
losses caused by security breaches.  We also face risks associated with security
breaches affecting third parties with whom we have relationships.


                                       22
<PAGE>


WE MAY BE EXPOSED TO LIABILITY FOR  INFORMATION  RETRIEVED  FROM OR  TRANSMITTED
OVER THE INTERNET.

Users may access  content on our  websites or the  websites of our  distribution
partners or other third parties through  website links or other means,  and they
may download content and  subsequently  transmit this content to others over the
Internet. This could result in claims against us based on a variety of theories,
including defamation,  obscenity, negligence, copyright infringement,  trademark
infringement  or the wrongful  actions of third  parties.  Other theories may be
brought  based on the nature,  publication  and  distribution  of our content or
based on errors or false or  misleading  information  provided on our  websites.
Claims  have  been  brought  against  online  services  in the  past and we have
received inquiries from third parties regarding these matters.  The claims could
be material in the future.

WE MAY BE EXPOSED TO LIABILITY  FOR PRODUCTS OR SERVICES SOLD OVER THE INTERNET,
INCLUDING PRODUCTS AND SERVICES SOLD BY OTHERS.

We enter into agreements  with commerce  partners and sponsors under whom we are
entitled  to  receive  a share of any  revenue  from the  purchase  of goods and
services  through  direct  links from our sites.  We sell  products  directly to
consumers which may expose us to additional  legal risks,  regulations by local,
state, federal and foreign authorities and potential liabilities to consumers of
these products and services,  even if we do not ourselves provide these products
or services.  We cannot assure you that any indemnification that may be provided
to us in some of these  agreements with these parties will be adequate.  Even if
these claims do not result in our liability, we could incur significant costs in
investigating  and defending  against these claims.  The imposition of potential
liability for information  carried on or disseminated  through our systems could
require us to  implement  measures to reduce our  exposure to  liability.  Those
measures may require the  expenditure  of  substantial  resources  and limit the
attractiveness  of our services.  Additionally,  our insurance  policies may not
cover all potential liabilities to which we are exposed.

WE ARE INVOLVED IN SECURITIES CLASS ACTION LITIGATION.

We are a party to the securities class action litigation  described in Note 5 to
the Condensed Consolidated  Financial Statements - "Litigation".  The defense of
the litigation may increase our expenses and will occupy management's  attention
and  resources,  and an adverse  outcome  in this  litigation  could  materially
adversely affect us.

WE MAY HAVE TO TAKE ACTIONS TO AVOID  REGISTRATION  UNDER THE INVESTMENT COMPANY
ACT.

Under the Investment Company Act of 1940 (the "1940 Act"), a company meeting the
definition  of an  "investment  company" is subject to various  stringent  legal
requirements on its operations. A company can become subject to the 1940 Act if,
among other reasons,  it owns  investment  securities  with a value exceeding 40
percent of the value of its total assets  (excluding  government  securities and
cash items) on an unconsolidated  basis,  unless a particular  exemption of safe
harbor applies.  Although we are not currently  subject to the 1940 Act, at some
point in the future the  percentage  of our assets which  consist of  investment
securities  may  exceed  40  percent  of the  value of its  total  assets  on an
unconsolidated  basis. Rule 3a-2 of the 1940 Act provides a temporary  exemption
from  registration  under the 1940 Act, for up to one year,  for companies  that
have a bona fide intent to engage, as soon as reasonably  possible,  in business
other than  investing,  reinvesting,  owning,  holding or trading in  securities
("transient  investment  companies").  If, due to future  sales of our assets or
changes in the value of our existing assets,  we become subject to the 1940 Act,
we  intend  to take all  actions  that  would  allow  reliance  on the  one-year
exemption for "transient  investment  companies",  including a resolution by the
Board  of  Directors  that  we have  bona  fide  intent  to  engage,  as soon as
reasonably  possible,  in business other than  investing,  reinvesting,  owning,
holding  or  trading  in  securities.  After the  one-year  period,  we would be
required to comply with the 1940 Act unless our  operations and assets result in
us no longer meeting the definition of Investment Company.

RISKS RELATING TO OUR VOICE OVER THE INTERNET BUSINESS

THE VOIP  MARKET IS  SUBJECT TO RAPID  TECHNOLOGICAL  CHANGE AND WE WILL NEED TO
DEPEND ON NEW  PRODUCT  INTRODUCTIONS  AND  INNOVATIONS  IN ORDER TO  ESTABLISH,
MAINTAIN AND GROW OUR BUSINESS.

VoIP is an emerging  market that is  characterized  by rapid changes in customer
requirements,   frequent   introductions  of  new  and  enhanced  products,  and
continuing and rapid technological  advances.  To enter and compete successfully
in this emerging market, we must continually design, develop,  manufacture,  and
sell new and  enhanced  VoIP  products and  services  that provide  increasingly
higher  levels of  performance  and  reliability  at lower costs.  These new and
enhanced products must take advantage of technological advancements and changes,
and respond to new customer requirements.  Our success in designing,  developing
and selling  such  products  and  services  will depend on a variety of factors,
including:


                                       23
<PAGE>


o the identification of market demand for new products;

o access to sufficient capital to complete our development efforts;

o product and feature selection;

o timely implementation of product design and development;

o product performance;

o cost-effectiveness of products under development;

o securing effective manufacturing processes; and

o success of promotional efforts.

Additionally,  we may also be  required  to  collaborate  with third  parties to
develop our products and may not be able to do so on a timely and cost-effective
basis, if at all. If we are unable, due to resource constraints or technological
or other reasons,  to develop and introduce new or enhanced products in a timely
manner or if such new or  enhanced  products do not  achieve  sufficient  market
acceptance, our operating results will suffer and our business will not grow.

OUR ABILITY AND PLANS TO PROVIDE TELECOMMUNICATION  SERVICES AT ATTRACTIVE RATES
ARISE IN LARGE PART FROM THE FACT VOIP SERVICES ARE NOT CURRENTLY SUBJECT TO THE
SAME REGULATION AS TRADITIONAL TELEPHONY.

Because  their  services  are not  currently  regulated  to the same  extent  as
traditional  telephony,  VoIP providers can currently  avoid paying charges that
traditional  telephone companies must pay. Many traditional  telephone operators
are  lobbying  the  Federal  Communications  Commission  (FCC) and the states to
regulate VoIP on the same or similar basis as  traditional  telephone  services.
The FCC and several states are examining this issue.

If the FCC or any state determines to regulate VoIP, they may impose surcharges,
taxes or additional  regulations  upon  providers of Internet  telephony.  These
surcharges  could include access charges  payable to local exchange  carriers to
carry and terminate  traffic,  contributions  to the  universal  service fund or
other  charges.   Regulations   requiring  compliance  with  the  Communications
Assistance for Law Enforcement  Act, or provision of enhanced 911 services could
also place a  significant  financial  burden on us. The  imposition  of any such
additional fees, charges, taxes, licenses and regulations on VoIP services could
materially  increase  our costs  and may  reduce or  eliminate  the  competitive
pricing advantage we seek to enjoy.

THE INTERNET  TELEPHONY  BUSINESS IS HIGHLY  COMPETITIVE  AND ALSO COMPETES WITH
TRADITIONAL AND CELLULAR TELEPHONY PROVIDERS.

The long distance  telephony market and the Internet telephony market are highly
competitive.  There are several  large and numerous  small  competitors,  and we
expect to face continuing  competition based on price and service offerings from
existing  competitors  and new market  entrants  in the  future.  The  principal
competitive factors in our market include price, quality of service,  breadth of
geographic presence, customer service,  reliability,  network size and capacity,
and the  availability  of  enhanced  communications  services.  Our  competitors
include major and emerging  telecommunications  carriers in the U.S. and abroad.
Financial  difficulties  in the past  several  years of many  telecommunications
providers are rapidly altering the number,  identity and  competitiveness of the
marketplace.  Many of the  competitors  for our current and planned VoIP service
offerings  have  substantially   greater  financial,   technical  and  marketing
resources,  larger  customer bases,  longer  operating  histories,  greater name
recognition and more established  relationships in the industry than we have. As
a result,  certain of these  competitors  may be able to adopt  more  aggressive
pricing policies which could hinder our ability to market our voice services.

During the past several years, a number of companies  have  introduced  services
that make Internet  telephony or voice  services over the Internet  available to
businesses  and consumers.  All major  telecommunications  companies,  including
entities  like AT&T,  Sprint and MCI,  as well as ITXC,  iBasis,  Net2Phone  and
deltathree.com  either  presently or potentially  route traffic to  destinations
worldwide and compete or can compete directly with us. Other Internet  telephony
service  providers  focus on a retail  customer  base and compete with us. These
companies may offer the kinds of voice services we currently  offer or intend to
offer in the future.  In addition,  companies  currently in related markets have
begun to provide  voice over the  Internet  services or adapt their  products to
enable voice over the Internet services. These related companies may potentially
migrate into the Internet  telephony market as direct  competitors.  A number of
cable  operators  have also begun to offer  VoIP  telephony  services  via cable
modems which provide access to the Internet.  These companies,  which tend to be
large  entities  with  substantial  resources,   generally  have  large  budgets
available for research and  development,  and therefore may further  enhance the
quality and acceptance of the  transmission of voice over the Internet.  We also
compete with cellular telephony providers.


                                       24
<PAGE>


WE ARE UNABLE TO PREDICT THE VOLUME OF USAGE AND OUR CAPACITY NEEDS FOR OUR VOIP
BUSINESS; DISADVANTAGEOUS CONTRACTS WOULD REDUCE OUR OPERATING MARGINS.

We have  entered  into a  number  of,  and may have to  enter  into  additional,
long-term   agreements   (generally   from  one  to  five   years)   for  leased
communications  transmission  capacity  with  various  carriers.  Many of  these
agreements  have  minimum  use  requirements  pursuant  to  which we are able to
negotiate  lower overall per minute usage rates assuming the  utilization of all
of such  minutes.  To the extent  that we have  overestimated  (or in the future
overestimate)  our call volume,  we are  obligated to pay for more  transmission
capacity than we actually use, resulting in costs without corresponding revenue.
Given the recent  introduction  of our  voiceglo  VoIP  service  offerings,  our
minimum  commitments under existing carrier agreements  presently greatly exceed
our actual usage.  Conversely,  in the future,  if we underestimate our capacity
needs, we may be required to obtain  additional  transmission  capacity  through
more  expensive  means or such capacity may not be available.  As a result,  our
margins  could be reduced and our business,  financial  condition and results of
operations could be materially and adversely affected.

PRICING  PRESSURES  AND  INCREASING  USE  OF  VOIP  TECHNOLOGY  MAY  LESSEN  OUR
COMPETITIVE PRICING ADVANTAGE.

One of the main  competitive  advantages of our current and planned VoIP service
offerings is the ability to provide discounted local and long distance telephony
services by taking  advantage of cost savings achieved by carrying voice traffic
employing  VoIP  technology,  as  compared to  carrying  calls over  traditional
networks.  In recent years, the price of telephone service has fallen. The price
of telephone  service may continue to fall for various  reasons,  including  the
adoption of VoIP technology by other communications carriers. Many carriers have
adopted  pricing  plans  such that the rates  that they  charge  are not  always
substantially  higher  than the rates that VoIP  providers  charge  for  similar
service.  In addition,  other  providers of long distance  services are offering
unlimited or nearly  unlimited  use of some of their  services for  increasingly
lower monthly rates.

IF WE DO NOT DEVELOP AND MAINTAIN SUCCESSFUL  PARTNERSHIPS FOR VOIP PRODUCTS, WE
MAY NOT BE ABLE TO SUCCESSFULLY MARKET ANY OF OUR VOIP PRODUCTS.

We have entered into the VoIP market and our success is partly  dependent on our
ability  to  forge  marketing,   engineering  and  carrier  partnerships.   VoIP
communication  systems are extremely complex and no single company possesses all
the  technology  components  needed to build a complete end to end solution.  We
will likely need to enter into partnerships to augment our development  programs
and to assist us in marketing complete solutions to our targeted  customers.  We
may not be able to develop such partnerships in the course of our operations and
product development.  Even if we do establish the necessary partnerships, we may
not be able to adequately capitalize on these partnerships to aid in the success
of our business.

THE FAILURE OF VOIP  NETWORKS  TO MEET THE  RELIABILITY  AND  QUALITY  STANDARDS
REQUIRED FOR VOICE COMMUNICATIONS COULD RENDER OUR PRODUCTS OBSOLETE.

Circuit-switched  telephony  networks  feature  very  high  reliability,  with a
guaranteed  quality of service.  In addition,  such networks have  imperceptible
delay and consistently  satisfactory audio quality.  Emerging VoIP networks will
not be a viable  alternative to traditional  circuit  switched  telephony unless
they can provide reliability and quality consistent with these standards.

ONLINE CREDIT CARD FRAUD CAN HARM OUR BUSINESS.

The sale of our  products and  services  over the Internet  exposes us to credit
card fraud risks. Many of our products and services, including our voiceglo VoIP
services,  can be ordered or established (in the case of new voiceglo  accounts)
over the  Internet  using a major  credit card for  payment.  As is prevalent in
retail  telecommunications  and Internet services industries,  we are exposed to
the risk  that some of these  credit  card  accounts  are  stolen  or  otherwise
fraudulently  obtained. In general, we are not able to recover fraudulent credit
card  charges from such  accounts.  In addition to the loss of revenue from such
fraudulent  credit  card  use,  we also  remain  liable to third  parties  whose
products  or  services  are  engaged  by  us  (such  as  termination   fees  due
telecommunications  providers) in connection with the services which we provide.
In addition, depending upon the level of credit card fraud we experience, we may
become  ineligible  to  accept  the  credit  cards of  certain  issuers.  We are
currently  authorized  to accept  Discover,  together  with Visa and  MasterCard
(which are both covered by a single merchant agreement with us). Visa/MasterCard
constitutes  the  primary  credit  card  used  by our  customers.  The  loss  of
eligibility for acceptance of Visa/MasterCard  could significantly and adversely
affect our  business.  We have  recently  updated  our fraud  controls  and will
attempt to manage fraud risks through our internal  controls and our  monitoring
and blocking systems. If those efforts are not successful, fraud could cause our
revenue to decline  significantly  and our  business,  financial  condition  and
results of operations to be materially and adversely affected.


                                       25
<PAGE>


RISKS RELATING TO OUR HISTORICAL BUSINESS

THE  MARKET  SITUATION  CONTINUES  TO BE A  CHALLENGE  FOR  CHIPS & BITS  DUE TO
ADVANCES IN CONSOLE AND ONLINE GAMES, WHICH HAVE LOWER MARGINS AND TRADITIONALLY
LESS SALES LOYALTY TO CHIPS & BITS.

Our  subsidiary,  Chips & Bits,  Inc.  depends on major releases in the Personal
Computer (PC) market for the majority of sales and profits.  The game industry's
focus on X-Box,  Playstation and GameCube has dramatically reduced the number of
major PC releases,  which resulted in significant declines in revenues and gross
margins  for Chips & Bits.  Gross  margins for Chips & Bits were 24% and 23% for
the years ended December 31, 2003 and 2002,  respectively.  Because of the large
installed base of personal computers, these revenue and gross margin percentages
may  fluctuate  with  changes in the PC game market.  However,  we are unable to
predict when, if ever, there will be a turnaround in the PC game market.

In  addition,  many  companies  involved in the games market may be acquired by,
receive  investments from, or enter into commercial  relationships  with larger,
well-established  and  well-financed  companies.  As a  result  of  this  highly
fragmented and competitive  market,  consolidations  and strategic  ventures may
continue in the future.

WE HAVE  HISTORICALLY  RELIED  SUBSTANTIALLY  ON ONLINE  AND  PRINT  ADVERTISING
REVENUES. THE ONLINE AND PRINT ADVERTISING MARKETS HAVE SIGNIFICANTLY DECLINED.

We historically  derived a substantial  portion of our revenues from the sale of
advertisements on our website and in our magazine  Computer Games Magazine.  Our
business  model and revenues  were highly  dependent on the amount of traffic on
our websites,  our ability to properly monetize website traffic and on the print
circulation of our Computer Games magazine.  Print and online  advertising  have
dramatically  decreased  since the middle of 2000,  and may continue to decline,
which could continue to have a material effect on us. Many advertisers have been
experiencing  financial  difficulties which could materially impact our revenues
and our ability to collect our receivables.  For these reasons, we cannot assure
you that our current  advertisers will continue to purchase  advertisements from
our games properties.

WE MAY BE MATERIALLY ADVERSELY AFFECTED IF ELECTRONIC COMMERCE DOES NOT BECOME A
VIABLE SOURCE OF SIGNIFICANT REVENUES OR PROFITS.

In February  2000, we acquired  Chips & Bits,  Inc., a direct  marketer of video
games  and  related  products  over  the  Internet.  However,  we  have  limited
experience in the sale of products online as compared to many of our competitors
and the development of relationships  with  manufacturers and suppliers of these
products. In addition,  the closing of our community site and our small business
web-hosting site adversely  affected our electronic  commerce due to the loss of
traffic  referred by those sites to the Chips & Bits website.  We also face many
uncertainties,  which may affect our  ability to  generate  electronic  commerce
revenues and profits, including:

o our ability to obtain new  customers at a  reasonable  cost,  retain  existing
customers and encourage repeat purchases;

o the  likelihood  that both  online and retail  purchasing  trends may  rapidly
change;

o the level of product returns;

o merchandise shipping costs and delivery times;

o our ability to manage inventory levels;

o our ability to secure and maintain relationships with vendors; and

o the possibility that our vendors may sell their products through other sites.

If use of the Internet for  electronic  commerce does not continue to grow,  our
business and financial condition would be materially and adversely affected.

INTENSE  COMPETITION FOR ELECTRONIC  COMMERCE  REVENUES HAS RESULTED IN DOWNWARD
PRESSURE ON GROSS MARGINS.

Due to the ability of consumers to easily compare prices of similar  products or
services on competing websites and consumers' potential preference for competing
website's user interface,  gross margins for electronic  commerce  transactions,
which are narrower than for  advertising  businesses,  may further narrow in the
future and,  accordingly,  our  revenues and profits  from  electronic  commerce
arrangements may be materially and adversely affected.


                                       26
<PAGE>


OUR  ELECTRONIC  COMMERCE  BUSINESS MAY RESULT IN SIGNIFICANT  LIABILITY  CLAIMS
AGAINST US.

Consumers may sue us if any of the products that we sell are defective,  fail to
perform properly or injure the user.  Consumers are also increasingly seeking to
impose liability on game  manufacturers and distributors  based upon the content
of the games and the alleged  affect of such  content on  behavior.  Some of our
agreements with manufacturers  contain provisions intended to limit our exposure
to liability  claims.  However,  these limitations may not prevent all potential
claims. Liability claims could require us to spend significant time and money in
litigation or to pay significant  damages.  As a result, any claims,  whether or
not successful, could seriously damage our reputation and our business.

RISKS RELATING TO OUR COMMON STOCK

THE VOLUME OF SHARES  AVAILABLE  FOR FUTURE SALE IN THE OPEN MARKET  COULD DRIVE
DOWN THE PRICE OF OUR STOCK OR KEEP OUR STOCK PRICE FROM IMPROVING,  EVEN IF OUR
FINANCIAL PERFORMANCE IMPROVES.

As of May 5, 2004,  we had  issued and  outstanding  approximately  132  million
shares, of which  approximately 25 million shares were freely tradeable over the
public  markets.  There is limited  trading  volume in our shares and we are now
traded  only in the  over-the-counter  market.  On April  16,  2004,  we filed a
registration  statement  relating to the potential resale of up to approximately
131 million of our shares (including  approximately 27 million shares underlying
outstanding  warrants to acquire our Common Stock).  The registration  statement
became effective on May 11, 2004.  Sales of significant  amounts of Common Stock
in the public market in the future,  the perception that sales will occur or the
registration of additional shares pursuant to existing  contractual  obligations
could  materially and adversely  drive down the price of our stock. In addition,
such  factors  could  adversely  affect the  ability of the market  price of the
Common  Stock  to  increase  even if our  business  prospects  were to  improve.
Substantially all of our stockholders holding restricted  securities,  including
shares issuable upon the exercise of warrants to purchase our Common Stock, have
registration  rights under various  conditions.  Also,  we may issue  additional
shares of our common stock or other equity  instruments which may be convertible
into common stock at some future date, which could further  adversely affect our
stock price.

In  addition,  as of May 5, 2004,  there were  outstanding  options to  purchase
approximately  9,875,000  shares of our Common Stock,  which become eligible for
sale in the  public  market  from  time to time  depending  on  vesting  and the
expiration of lock-up agreements. The issuance of these securities is registered
under  the   Securities  Act  and   consequently,   subject  to  certain  volume
restrictions as to options owned by executive officers, will be freely tradable.

OUR CHAIRMAN MAY CONTROL US.

Michael S. Egan, our Chairman and Chief Executive Officer,  beneficially owns or
controls, directly or indirectly,  approximately 59 million shares of our Common
Stock as of May 5, 2004, which in the aggregate represents  approximately 43% of
the  outstanding  shares of our Common Stock  (treating as outstanding  for this
purpose the shares of Common Stock  issuable  upon exercise of the options owned
by Mr. Egan or his  affiliates).  Accordingly,  Mr. Egan would likely be able to
exercise significant influence over, if not control, any stockholder vote.

DELISTING  OF OUR COMMON  STOCK MAKES IT MORE  DIFFICULT  FOR  INVESTORS TO SELL
SHARES. THIS MAY POTENTIALLY LEAD TO FUTURE MARKET DECLINES.

The shares of our Common Stock were delisted from the NASDAQ  national market in
April 2001 and are now traded in the over-the-counter market on what is commonly
referred  to as the  electronic  bulletin  board or  "OTCBB".  As a  result,  an
investor may find it more difficult to dispose of or obtain accurate  quotations
as to the market value of the  securities.  The trading volume of our shares has
dramatically declined since the delisting.  In addition, we are now subject to a
Rule  promulgated by the Securities and Exchange  Commission that, if we fail to
meet criteria set forth in such Rule, various practice  requirements are imposed
on broker-dealers who sell securities governed by the Rule to persons other than
established customers and accredited investors. For these types of transactions,
the  broker-dealer  must  make  a  special  suitability  determination  for  the
purchaser and have received the purchaser's  written consent to the transactions
prior to sale.  Consequently,  the Rule may have a materially  adverse effect on
the  ability of  broker-dealers  to sell the  securities,  which may  materially
affect the  ability of  stockholders  to sell the  securities  in the  secondary
market.

The  delisting  has made  trading  our  shares  more  difficult  for  investors,
potentially leading to further declines in share price and making it less likely
our stock  price will  increase.  It has also made it more  difficult  for us to
raise  additional  capital.  We may also  incur  additional  costs  under  state
blue-sky laws if we sell equity due to our delisting.


                                       27
<PAGE>


ANTI-TAKEOVER  PROVISIONS  AFFECTING  US COULD  PREVENT  OR  DELAY A  CHANGE  OF
CONTROL.

Provisions of our charter, by-laws and stockholder rights plan and provisions of
applicable Delaware law may:

o have the effect of delaying,  deferring  or  preventing a change in control of
our company;

o discourage bids of our Common Stock at a premium over the market price; or

o adversely  affect the market  price of, and the voting and other rights of the
holders of, our Common Stock.

Certain Delaware laws could have the effect of delaying, deterring or preventing
a change in control of our company. One of these laws prohibits us from engaging
in a business combination with any interested  stockholder for a period of three
years from the date the person became an interested stockholder,  unless various
conditions are met. In addition,  provisions of our charter and by-laws, and the
significant  amount of Common  Stock held by our  current  and former  executive
officers,   directors  and  affiliates,   could  together  have  the  effect  of
discouraging  potential  takeover  attempts  or  making  it more  difficult  for
stockholders to change management.  In addition, the employment contracts of our
Chairman,  CEO and Vice President of Finance  provide for  substantial  lump sum
payments  ranging from 2 (for the Vice  President)  to 10 times (for each of the
Chairman  and CEO) of their  respective  average  combined  salaries and bonuses
(together with the continuation of various benefits for extended periods) in the
event of their  termination  without cause or a termination by the executive for
"good   reason",   which   is   conclusively   presumed   in  the   event  of  a
"change-in-control" (as such terms are defined in such agreements).

OUR STOCK PRICE IS VOLATILE.

The trading  price of our Common Stock has been  volatile and may continue to be
volatile in response to various factors, including:

o the performance and public acceptance of our new product lines;

o entrance into new lines of business, including acquisitions of businesses;

o quarterly variations in our operating results;

o competitive announcements;

o sales of any of our remaining games properties;

o the operating and stock price  performance  of other  companies that investors
may deem comparable to us; and

o news relating to trends in our markets.

The stock market has experienced significant price and volume fluctuations,  and
the  market  prices  of  technology  companies,   particularly  Internet-related
companies, have been highly volatile. Our stock is also more volatile due to the
limited trading volume.


                                       28
<PAGE>


ITEM 3. CONTROLS AND PROCEDURES.

We maintain  disclosure  controls and procedures that are designed to ensure (1)
that information required to be disclosed by us in the reports we file or submit
under the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), is
recorded,  processed,  summarized and reported within the time periods specified
in the Securities  and Exchange  Commission's  ("SEC") rules and forms,  and (2)
that this information is accumulated and  communicated to management,  including
our Chief Executive  Officer and Chief  Financial  Officer,  as appropriate,  to
allow  timely  decisions  regarding  required   disclosure.   In  designing  and
evaluating the disclosure  controls and procedures,  management  recognizes that
any controls and  procedures,  no matter how well  designed  and  operated,  can
provide only reasonable  assurance of achieving the desired control  objectives,
and management  necessarily was required to apply its judgment in evaluating the
cost benefit relationship of possible controls and procedures.

Our Chief  Executive  Officer and Chief  Financial  Officer have  evaluated  the
effectiveness of our disclosure  controls and procedures  pursuant to Securities
Exchange Act Rule 13a-14 as of March 31,  2004.  Based on that  evaluation,  our
Chief  Executive  Officer and our Chief  Financial  Officer have concluded that,
except as described below, our disclosure  controls and procedures are effective
in  alerting  them in a timely  manner  to  material  information  regarding  us
(including our consolidated subsidiaries) that is required to be included in our
periodic reports to the SEC.

In March 2004, we experienced an increase in credit card  chargebacks and refund
requests  as a result of orders  for our VoIP  telephony  services  placed  with
fraudulent  credit card data even though the  associated  financial  institution
approved payment of the transaction.  We immediately began monitoring the credit
card transactions of our VoIP telephony services division more closely, and as a
result,  were  able to  alert  both  cardholders  and  credit  card  issuers  of
fraudulent  transactions  due to  identity  theft.  Under  current  credit  card
practices, we are liable for fraudulent credit card transactions on our website.
We determined that our internal controls for detection of the fraudulent charges
were inadequate,  primarily due to certain  weaknesses in our payment processing
software and other processes in place to detect credit card fraud. We have taken
the following  steps to strengthen  internal  controls  surrounding  credit card
transactions of our VoIP telephony services operation:

      o     IDENTITY  VERIFICATION.  Our customer  service  representatives  are
            contacting the credit  cardholder on each new  subscription  for our
            VoIP telephony  services.  Once we  successfully  verify the billing
            information  and  confirm  the  validity  of  the  transaction,  the
            customer's service is activated and the credit card is billed.

      o     USAGE  MONITORING.  We monitor call activity on our VoIP network for
            excessive or suspicious usage.  Upon  identification of excessive or
            suspicious  usage,  we contact  the  customer on file to confirm the
            validity of the subscription.

      o     FRAUD  PREVENTION  SOFTWARE.  We are in the process of  implementing
            more robust  electronic  payment software which provides  additional
            credit  card   verification   tools.  The  software  provides  fraud
            screening  developed and maintained in  partnership  with one of the
            major  credit card  issuers.  Additionally,  the  software  provides
            exception  reporting of credit card transactions which, based on the
            software's risk screening  process,  may be deemed to be potentially
            fraudulent.  Upon the successful implementation of this software and
            a period of monitoring the results of the software's  risk screening
            process, we may revise our identity  verification process to that of
            a random sampling approach.

Except as noted above,  there have been no  significant  changes in our internal
controls or in other factors that could significantly affect those controls that
occurred in, or subsequent  to, the last fiscal  quarter.  We cannot assure you,
however,  that our system of  disclosure  controls  and  procedures  will always
achieve its stated goals under all future conditions, no matter how remote.


                                       29
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 4 - "Litigation" of the Financial Statements included in this Report.

ITEM 2. CHANGES IN  SECURITIES  AND SMALL  BUSINESS  ISSUER  PURCHASES OF EQUITY
SECURITIES

(a) Sales of Unregistered Securities

On February 2, 2004,  Michael S. Egan (our Chairman and Chief Executive Officer)
and his wife, S. Jacqueline  Egan,  entered into a Note Purchase  Agreement with
the Company  pursuant to which they acquired a convertible  promissory note (the
"Bridge Note") in the aggregate principal amount of $2,000,000.  The Bridge Note
was  convertible  at anytime  into shares of the  Company's  common  stock at an
initial rate of $0.98 per share.  The conversion  rate was subject to adjustment
based upon the rate (effectively, $0.57 per share) at which the Company sold its
common stock in the subsequent  March 2004 private  offering (which is described
below).  The Bridge Note was due on demand from the holder, and was secured by a
pledge of substantially all of the assets of the Company. Such security interest
was shared with the then holders of the Company's  Secured  Convertible Notes in
the principal  amount of $1,750,000  issued on May 22, 2003 to various  entities
affiliated  with Michael S. Egan.  The Bridge Notes bore interest at the rate of
ten (10) percent per annum.

In  addition,  the Egans  were  issued a warrant to  acquire  204,082  shares of
theglobe.com  common stock at an exercise price of $1.22 per share.  The warrant
is exercisable at any time on or before February 2, 2009. The Egans are entitled
to certain demand and piggy-back  registration  rights in connection  with their
investment.  The  exercise  price of the  warrant  (together  with the number of
shares for which such warrant is  exercisable) is subject to adjustment upon the
occurrence of certain events.

On March 11, 2004,  the Company  completed a private  offering of 329,916  units
(the "Units") for a purchase price of $85 per Unit (the "PIPE  Offering").  Each
Unit  consisted  of 100 shares of the  Company's  common  stock and  warrants to
acquire 50 shares of the common stock (the "PIPE  Warrants").  The PIPE Warrants
are  exercisable  for a period  of five (5) years  commencing  May 4, 2004 at an
initial  exercise price of $0.001 per share.  The Company also granted an option
to one party to acquire an additional 3,900 Units on or before March 22, 2004 on
the same terms,  which option was fully exercised.  Assuming the exercise of the
PIPE Warrants, the aggregate number of shares of common stock issued in the PIPE
Offering was 50,072,471 shares for an aggregate consideration of $28,374,400, or
approximately $0.57 per share.

Halpern Capital,  Inc., acted as placement agent for the PIPE offering,  and was
paid a  commission  of $1.2  million  and issued a warrant to acquire  1,000,000
shares of common stock at $0.001 per share.

Pursuant  to the  terms of the  PIPE  Offering  the  Company  was  contractually
obligated  to  file a  registration  statement  relating  to the  resale  of the
Securities on or about April 22, 2004 and to cause such  registration  statement
to  become  effective  on or  about  July 6,  2004 (or 30 days  earlier  if such
registration statement is not reviewed by the SEC). In the event the Company was
late in any of its  registration  obligations,  it could  have been  liable  for
payment of a late fee of 5% of the amount  raised in the PIPE Offering per month
(not to exceed 25% in the  aggregate),  unless such fee is waived under  certain
conditions. The Company filed a registration statement relating to the resale of
the  securities  issued  in the  PIPE  Offering  on  April  16,  2004  and  such
registration statement became effective on May 11, 2004.

In connection  with the PIPE Offering,  Mr. Egan, our Chairman,  Chief Executive
Officer and principal  stockholder,  together with certain of his affiliates and
other parties,  converted the $2,000,000 Bridge Note, an aggregate of $1,750,000
of Secured  Convertible  Notes and all of the  Company's  outstanding  shares of
Series F Preferred Stock, and exercised all of the warrants issued in connection
with the  foregoing  Secured  Convertible  Notes and Series F  Preferred  Stock,
together with certain  warrants issued to Dancing Bear Investments (an affiliate
of Mr. Egan). As a result of such conversions and exercises,  the Company issued
an aggregate of 48,775,909 shares of Common Stock.

Pursuant to an  agreement  with  NeoPets,  Inc.,  dated May 6, 2004,  related to
advertising and marketing services, the Company may issue to NeoPets, Inc. up to
3,000,000  shares of common stock at various stages  subject to meeting  certain
business criteria as set forth in the agreement.

The foregoing  private  offerings  were directed  solely to a limited  number of
investors who are  sophisticated  and who are  accredited  within the meaning of
applicable securities laws. The Company believes that such offers and sales were
exempt from registration pursuant to Sections 4(2) of the Securities Act of 1933
and Regulation D promulgated thereunder.


                                       30
<PAGE>


(b) Use of Proceeds from Sales of Registered Securities.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.


                                       31
<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3.1 Certificate of Amendment Relating to the Designation  Preferences and Rights
of the Junior Participating Preferred Stock. (1)

4.1 Form of Warrant dated March 5, 2004 to acquire  securities of  theglobe.com,
inc. (2)

10.1 Securities Purchase and Registration Agreement dated March 2, 2004 relating
to the purchase of Units of Common Stock and Warrants of theglobe.com, inc. (3)

31.1 Certification of the Chief Executive Officer pursuant to Section 302 of The
Sarbanes-Oxley Act of 2002.

31.2 Certification of the Chief Financial Officer pursuant to Section 302 of The
Sarbanes-Oxley Act of 2002.

32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.  Section
1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.  Section
1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

      (1) Incorporated by reference to our SB-2 Registration  Statement filed on
          April 16, 2004.

      (2) Incorporated by reference to our Form 8-K filed on March 17, 2004.

      (3) Incorporated by reference to our Form 10-KSB filed on March 30, 2004.


(b) Reports on Form 8-K.

Form 8-K  related to an event  dated  February  2, 2004,  relating  to an Item 5
disclosure of the issuance of a $2,000,000  demand promissory note as the result
of a Note  Purchase  Agreement  between  the Company and Michael S. Egan and his
wife, S. Jacqueline Egan.

Form  8-K  related  to an  event  dated  March 8,  2004,  relating  to an Item 5
disclosure of the completion of a private  offering of Common Stock and warrants
for an aggregate consideration of approximately $28 million.


                                       32
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant has duly caused this report on Form 10-QSB to be signed on its behalf
by the undersigned thereto duly authorized.

theglobe.com, inc.


/s/ Michael S. Egan
-----------------------------------------
Michael S. Egan
Chief Executive Officer
(Principal Executive Officer)

May 14, 2004



/s/ Garrett Pettingell
-----------------------------------------
Garrett Pettingell
Chief Financial Officer
(Principal Financial Officer)

May 14, 2004


                                       33
<PAGE>


                                  EXHIBIT INDEX

3.1 Certificate of Amendment Relating to the Designation  Preferences and Rights
of the Junior Participating Preferred Stock. (1)

4.1 Form of Warrant dated March 5, 2004 to acquire  securities of  theglobe.com,
inc. (2)

10.1 Securities Purchase and Registration Agreement dated March 2, 2004 relating
to the purchase of Units of Common Stock and Warrants of theglobe.com, inc. (3)

31.1 Certification of the Chief Executive Officer pursuant to Section 302 of The
Sarbanes-Oxley Act of 2002.

31.2 Certification of the Chief Financial Officer pursuant to Section 302 of The
Sarbanes-Oxley Act of 2002.

32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.  Section
1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.  Section
1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

      (1) Incorporated by reference to our SB-2 Registration  Statement filed on
          April 16, 2004.

      (2) Incorporated by reference to our Form 8-K filed on March 17, 2004.

      (3) Incorporated by reference to our Form 10-KSB filed on March 30, 2004.


                                       34