**UNITED STATES**


**SECURITIES AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-Q**








**x**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d)****OF
                THE SECURITIES EXCHANGE ACT OF
                1934**





For
      the
      quarterly period ended September 30, 2008





OR





**o**
            **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.
                EMPLOYERINCORPORATION
                OR ORGANIZATION)
            
            IDENTIFICATION
                NO.)




110
      EAST
      BROWARD BOULEVARD, SUITE 1400


FORT
      LAUDERDALE, FL 33301


(ADDRESS
      OF PRINCIPAL EXECUTIVE OFFICES)





(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. x Yes o No





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “small
      reporting company” in Rule 12b-2 of the Exchange Act





Large accelerated filer
            o
            
            Accelerated filer
            oNon-accelerated filer
            o
            (Do not check if a smaller reporting company)
            Smaller reporting company
            x





Indicate by check mark
      whether the registrant is a shell company (as defined in Rule 12b-2 of the
      Exchange Act).


Yes x No o





The
      number of shares outstanding of the Registrant's Common Stock, $.001 par value
      (the "Common Stock") as of November 14, 2008 was 441,484,838.







**THEGLOBE.COM,
      INC.**


**FORM
      10-Q**





TABLE
      OF
      CONTENTS





PART I:
            FINANCIAL
                INFORMATIONItem 1.
            Financial
                StatementsCondensed
                Consolidated Balance Sheets at September 30, 2008 (unaudited) and
                December
                31, 2007
            2Unaudited
                Condensed Consolidated Statements of Operations for the three and
                nine
                months ended September 30, 2008 and 2007
            3Unaudited
                Condensed Consolidated Statements of Cash Flows for the nine months
                ended
                September 30, 2008 and 2007
            4Notes
                to Unaudited Condensed Consolidated Financial Statements
            6Item 2.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            16Item 4T.
            Controls
                and Procedures
            25PART II:
            OTHER
                INFORMATIONItem 1.
            Legal
                Proceedings
            25Item 1A.
            Risk
                Factors
            25Item 2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            31Item 3.
            Defaults
                Upon Senior Securities
            32Item 4.
            Submission
                of Matters to a Vote of Security Holders
            32Item 5.
            Other
                Information
            32Item 6.
            Exhibits
            32SIGNATURES
            33








**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**




**THEGLOBE.COM,
      INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**





September 30,
            
            DECEMBER 31,2008
            
            2007(UNAUDITED)ASSETSCurrent
                Assets:Cash
                and cash equivalents
            
            $
            45,055
            
            $
            631,198Accounts
                receivable from related parties
            
            
            12,026
            
            
            416,566Accounts
                receivable
            
            
            128,464
            
            
            12,213Prepaid
                expenses
            
            
            85,459
            
            
            173,794Other
                current assets
            
            
            —
            
            
            4,219Net
                assets of discontinued operations
            
            
            —
            
            
            30,000Total
                current assets
            
            
            271,004
            
            
            1,267,990Property
                and equipment, net
            
            
            —
            
            
            35,748Intangible
                assets, net
            
            
            —
            
            
            368,777Other
                assets
            
            
            40,000
            
            
            40,000Total
                assets
            
            $
            311,004
            
            $
            1,712,515LIABILITIES
                AND STOCKHOLDERS' DEFICITCurrent
                Liabilities:Accounts
                payable to related parties
            
            $
            667
            
            $
            499,631Accounts
                payable
            
            
            223,845
            
            
            263,683Accrued
                expenses and other current liabilities
            
            
            744,399
            
            
            953,826Accrued
                interest due to related parties
            
            
            10,630
            
            
            954,795Notes
                payable due to related parties
            
            
            500,000
            
            
            4,650,000Deferred
                revenue
            
            
            —
            
            
            1,443,589Net
                liabilities of discontinued operations
            
            
            1,843,060
            
            
            1,902,344Total
                current liabilities
            
            
            3,322,601
            
            
            10,667,868Deferred
                revenue
            
            
            —
            
            
            401,248Total
                liabilities
            
            
            3,322,601
            
            
            11,069,116Stockholders'
                Deficit:Common
                stock, $0.001 par value; 500,000,000 shares authorized; 441,484,838
                and  172,484,838 shares issued at September 30, 2008 and
                December 31, 2007, respectively
            
            
            441,485
            
            
            172,485Additional
                paid-in capital
            
            
            294,316,249
            
            
            290,486,232Accumulated
                deficit
            
            
            (297,769,331
            )
            
            (300,015,318
            )Total
                stockholders' deficit
            
            
            (3,011,597
            )
            
            (9,356,601
            )Total
                liabilities and stockholders’ deficit
            
            $
            311,004
            
            $
            1,712,515





See
      notes
      to unaudited condensed consolidated financial statements.


2


**THEGLOBE.COM,
      INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**





Three Months Ended September 30,
            
            Nine Months Ended September 30,2008
            
            2007
            
            2008
            
            2007(UNAUDITED)
            
            (UNAUDITED)Net
                Revenue
            
            $
            2,074,562
            
            $
            599,580
            
            $
            3,165,587
            
            $
            1,676,644Operating
                Expenses:Cost
                of revenue
            
            
            125,505
            
            
            183,532
            
            
            274,334
            
            
            376,835Sales
                and marketing
            
            
            90,263
            
            
            439,008
            
            
            386,664
            
            
            1,669,688General
                and administrative
            
            
            435,973
            
            
            615,207
            
            
            1,626,593
            
            
            2,798,238Related
                party transactions
            
            
            105,424
            
            
            83,576
            
            
            388,806
            
            
            367,368Depreciation
            
            
            8,802
            
            
            21,738
            
            
            30,379
            
            
            64,792Intangible
                asset amortization
            
            
            289,753
            
            
            39,512
            
            
            368,777
            
            
            118,535Total
                Operating Expenses
            
            
            1,055,720
            
            
            1,382,573
            
            
            3,075,553
            
            
            5,395,456Operating
                Income (Loss) from Continuing Operations
            
            
            1,018,842
            
            
            (782,993
            )
            
            90,034
            
            
            (3,718,812
            )Other
                Income (Expense), net:Gain
                on Tralliance Asset Sale
            
            
            2,524,711
            
            
            —
            
            
            2,524,711
            
            
            —Related
                party interest expense
            
            
            (115,576
            )
            
            (860,151
            )
            
            (346,151
            )
            
            (1,531,425
            )Interest
                income (expense), net
            
            
            (35
            )
            
            (908
            )
            
            3,201
            
            
            55,585Other
                income
            
            
            —
            
            
            10,048
            
            
            247
            
            
            10,0482,409,100
            
            
            (851,011
            )
            
            2,182,008
            
            
            (1,465,792
            )Income
                (Loss) from Continuing Operations Before Income Tax
            
            
            3,427,942
            
            
            (1,634,004
            )
            
            2,272,042
            
            
            (5,184,604
            )Income
                Tax Provision
            
            
            44,919
            
            
            —
            
            
            44,919
            
            
            —Income
                (Loss) from Continuing Operations
            
            
            3,383,023
            
            
            (1,634,004
            )
            
            2,227,123
            
            
            (5,184,604
            )Discontinued
                Operations, net of tax:
            
            
            (3,096
            )
            
            251,196
            
            
            18,864
            
            
            (752,816
            )Net
                Income (Loss)
            
            $
            3,379,927
            
            $
            (1,382,808
            )
            $
            2,245,987
            
            $
            (5,937,420
            )Loss
                Per Share:Basic
                and Diluted:Continuing
                Operations
            
            $
            0.02
            
            $
            (0.01
            )
            $
            0.01
            
            $
            (0.03
            )Discontinued
                Operations
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —Net
                Income (Loss)
            
            $
            0.02
            
            $
            (0.01
            )
            $
            0.01
            
            $
            (0.03
            )Weighted
                Average Common Shares Outstanding
            
            
            214,974,068
            
            
            172,484,838
            
            
            189,670,966
            
            
            172,484,838




See
      notes
      to consolidated financial statements.


3





**THEGLOBE.COM,
      INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**





Nine Months
              Ended September 30,2008
            
            2007(UNAUDITED)Cash
                Flows from Operating Activities:Net
                Income (Loss)
            
            $
            2,245,987
            
            $
            (5,937,420
            )Add
                back: (income) loss from discontinued operations
            
            
            (18,864
            )
            
            752,816Net
                loss from continuing operations
            
            
            2,227,123
            
            
            (5,184,604
            )Adjustments
                to reconcile net loss from continuing operations to net cash flows
                from
                operating activitiesGain
                on Tralliance Asset Sale
            
            
            (2,524,711
            )
            
            —Depreciation
                and amortization
            
            
            399,156
            
            
            183,327Non-cash
                interest expense related to beneficial conversion features of
                debt
            
            
            —
            
            
            1,250,000Employee
                stock compensation
            
            
            19,429
            
            
            131,076Compensation
                related to non-employee stock options
            
            
            1,278
            
            
            5,796Changes
                in operating assets and liabilitiesAccounts
                receivable from related parties
            
            
            404,540
            
            
            6,433Accounts
                receivable
            
            
            (116,251
            )
            
            (119,831
            )Prepaid
                and other current assets
            
            
            52,124
            
            
            146,250Accounts
                payable to related parties
            
            
            370,539
            
            
            188,947Accounts
                payable
            
            
            (39,838
            )
            
            126,490Accrued
                expenses and other current liabilities
            
            
            (209,427
            )
            
            (305,602
            )Accrued
                interest due to related parties
            
            
            346,150
            
            
            281,425Deferred
                revenue
            
            
            (1,844,837
            )
            
            117,582Net
                cash flows from operating activities of continuing
                operations
            
            
            (914,725
            )
            
            (3,172,711
            )Net
                cash flows from operating activities of discontinued
                operations
            
            
            (17,420
            )
            
            (3,063,222
            )Net
                cash flows from operating activities
            
            
            (932,145
            )
            
            (6,235,933
            )Cash
                Flows from Investing Activities:Purchases
                of property and equipment
            
            
            (3,301
            )
            
            (26,345
            )Tralliance
                Asset Sale transaction costs
            
            
            (64,919
            )
            
            —Proceeds
                from the sale of property and equipment
            
            
            7,000
            
            
            108,294Net
                cash flows from investing activities
            
            
            (61,220
            )
            
            81,949Cash
                Flows from Financing Activities:Borrowing
                on Notes Payable
            
            
            500,000
            
            
            1,250,000Share
                Issuance transaction costs
            
            
            (92,778
            )
            
            —Net
                cash flows from financing activities
            
            
            407,222
            
            
            1,250,000Net
                Decrease in Cash and Cash Equivalents
            
            
            (586,143
            )
            
            (4,903,984
            )Cash
                and Cash Equivalents, at beginning of period
            
            
            631,198
            
            
            5,316,218Cash
                and Cash Equivalents, at end of period
            
            $
            45,055
            
            $
            412,234





See
      notes
      to unaudited condensed consolidated financial statements.


4





**THEGLOBE.COM,
      INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(continued)**





Nine Months
              Ended September
                30,2008
            
            2007(UNAUDITED)Supplemental
                Disclosure of Non-Cash Investing and Financing Activities:Conversion
                of debt securities into common stock
            
            $
            400,000
            
            
            —Cancellation
                of debt and other liabilities related to Purchase
                Transaction
            
            
            6,409,818
            
            
            —Issuance
                of common stock related to Purchase Transaction
            
            
            3,771,088
            
            
            —Additional
                paid-in capital attributable to beneficial conversion of convertible
                debt
                securities
            
            $
            —
            
            $
            1,250,000


5




**THEGLOBE.COM,
      INC. AND SUBSIDIARIES**


**NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS**





**(1)
      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





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.
      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. The Company continued to operate its Computer Games print magazine
      and the associated CGOnline website ( www.cgonline.com ),
      as
      well as the e-commerce games distribution business of Chips & Bits, Inc.
      ( www.chipsbits.com ).
      On
      June 1, 2002, Chairman Michael S. Egan and Director Edward A. Cespedes became
      Chief Executive Officer and President of the Company, respectively. On November
      14, 2002, the Company entered into the Voice over Internet Protocol (“VoIP”)
      business by acquiring certain VoIP assets.





On
      May 9,
      2005, the Company exercised an option to acquire all of the outstanding capital
      stock of Tralliance Corporation (“Tralliance”), an entity which had been
      designated as the registry for the “.travel” top-level domain through an
      agreement with the Internet Corporation for Assigned Names and Numbers
      (“ICANN”). The purchase price consisted of the issuance of 2,000,000 shares of
      theglobe’s Common Stock, warrants to acquire 475,000 shares of theglobe’s Common
      Stock and $40,000 in cash.





As
      more
      fully discussed in Note 5, “Discontinued Operations,” in March 2007, management
      and the Board of Directors of the Company made the decision to cease all
      activities related to its computer games businesses, including discontinuing
      the
      operations of its magazine publications, games distribution business and related
      websites.   In addition, in March 2007, management and the Board of
      Directors of the Company decided to discontinue the operating, research and
      development activities of its VoIP telephony services business and terminate
      all
      of the remaining employees of that business.





On
      September 29, 2008, the Company closed upon a transaction whereby it sold its
      Tralliance business and issued 229,000,000 shares of its Common Stock to a
      company controlled by Michael S. Egan, the Company’s Chairman and Chief
      Executive Officer (see Note 3, “Sale of Tralliance and Share Issuance”). As a
      result of the sale of its Tralliance business, the Company became a shell
      company (as defined in Rule 12b-2 of the Securities and Exchange Act of 1934)
      with no material operations or assets. The Company presently intends to continue
      as a public company and make all the requisite filings under the Securities
      and
      Exchange Act of 1934.





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.




UNAUDITED
      INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION





The
      unaudited interim condensed consolidated financial statements of the Company
      as
      of September 30, 2008 and for the three and nine months ended September 30,
      2008
      and 2007 included herein have been prepared in accordance with the instructions
      for Form 10-Q 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 September 30, 2008 and the results of its operations and its cash
      flows for the three and nine months ended September 30, 2008 and 2007. The
      results of operations and cash flows for such periods are not necessarily
      indicative of results expected for the full year or for any future
      period.





USE
      OF
      ESTIMATES





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States 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 collectability
      of
      accounts receivable, the valuations of fair values of options and warrants,
      the
      impairment of long-lived assets, accounts payable and accrued expenses and
      other
      factors. At September 30, 2008 and December 31, 2007, a significant portion
      of
      our net liabilities of discontinued operations relate to charges that have
      been
      disputed by the Company and for which estimates have been required. Our
      estimates, judgments and assumptions are continually evaluated based upon
      available information and experience. Because of estimates inherent in the
      financial reporting process, actual results could differ from those estimates.


6





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.





PREPAID
      EXPENSES





Prepaid
      expenses at September 30, 2008 consist primarily of prepaid travel, legal,
      insurance and technology license costs, which are amortized to expense based
      upon the terms of the underlying service contracts. Prepaid expenses at December
      31, 2007 also consisted of fees paid to Tralliance third party service providers
      for various services related to domain name registrations. Such fees have been
      amortized to cost of revenue over the term of the related domain name
      registration. In connection with the Company’s sale of its Tralliance business
      on September 29, 2008, the remaining book value of prepaid expenses related
      to
      Tralliance third party service providers fees at the date of closing, totaling
      $101,308, was written off to cost of revenue during the quarter ended September
      30, 2008. Additionally, a total of $37,230 in prepaid travel costs, which were
      sold to the buyer of Tralliance’s business, were written off and included as a
      component of the gain recognized on such sale.





LONG-LIVED
      ASSETS





Long-lived
      assets, including property and equipment and intangible assets are stated at
      cost, net of accumulated depreciation and amortization. In connection with
      the
      Company’s sale of its Tralliance business on September 29, 2008, the remaining
      net book value of intangible assets at the date of closing, totaling $250,241
      was written off to intangible asset amortization expense during the quarter
      ended September 30, 2008. Additionally, the net book value of property and
      equipment sold to the buyer of Tralliance’s business, totaling $8,670, was
      written off and included as a component of the gain recognized on such
      sale.





COMPREHENSIVE
      INCOME (LOSS)





The
      Company reports comprehensive income (loss) in accordance with Statement of
      Financial Accounting Standards (“SFAS”) No. 130, "Reporting Comprehensive
      Income." Comprehensive income (loss) generally represents all changes in
      stockholders' equity during the year except those resulting from investments
      by,
      or distributions to, stockholders. The Company’s comprehensive income was
      approximately $2.2 million for the nine months ended September 30, 2008 and
      the
      Company's comprehensive loss was approximately $5.9 million for the nine months
      ended September 30, 2007, which amounts approximated the Company's reported
      net
      income and net loss for such periods.





CONCENTRATION
      OF CREDIT RISK





Financial
      instruments which subject the Company to concentrations of credit risk consist
      primarily of cash and cash equivalents 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.




REVENUE
      RECOGNITION





The
      Company’s revenue from continuing operations consists principally of
      registration fees for Internet domain registrations, which generally had terms
      of one year, but were up to ten years. Such registration fees have been reported
      net of transaction fees paid to an unrelated third party which serves as the
      registry operator for the Company. Payments of registration fees had been
      deferred when initially received and recognized as revenue on a straight-line
      basis over the registrations’ terms. In connection with the Company’s sale of
      its Tralliance business on September 29, 2008, the remaining balance of deferred
      revenue related to such registration fees at the date of closing, totaling
      $1,527,697, was written off and is included as a component of net revenue for
      the quarter ended September 30, 2008.





SEGMENT
      REPORTING





Effective
      with the March 2007 decision by management and the Board of Directors of the
      Company to cease all activities related to its computer games and VoIP telephony
      services businesses, the Company has been involved in one operating segment,
      the
      Internet services business.





NET
      LOSS
      PER SHARE





The
      Company reports net loss per common share in accordance with SFAS No. 128,
      "Computation of Earnings Per Share." In accordance with SFAS 128 and the
      Securities and Exchange Commission (“SEC’) Staff Accounting Bulletin No. 98,
      basic earnings per share is computed using the weighted average number of common
      shares outstanding during the period. Common equivalent shares consist of the
      incremental common shares issuable upon the conversion of convertible notes
      (using the if-converted method), if any, and the shares issuable upon the
      exercise of stock options and warrants (using the treasury stock method). Common
      equivalent shares are excluded from the calculation if their effect is
      anti-dilutive.




Due
      to
      the anti-dilutive effect of potentially dilutive securities or common stock
      equivalents that could be issued, such securities were excluded from the diluted
      net loss per common share calculation for all periods presented. Such
      potentially dilutive securities and common stock equivalents consisted of the
      following for the periods ended September 30:





2008
            
            2007Options
                to purchase common stock
            
            
            14,964,000
            
            
            17,792,000Common
                shares issuable upon exercise of warrants
            
            
            13,439,000
            
            
            16,911,000Common
                shares issuable upon conversion of Convertible Notes
            
            
            —
            
            
            193,000,000Total
            
            
            28,403,000
            
            
            227,703,000





RECENT
      ACCOUNTING PRONOUNCEMENTS





In
      December 2007 the FASB issued SFAS 141R, “Business Combinations” (“SFAS 141R”)
      which requires an acquirer to recognize the assets acquired, the liabilities
      assumed, and any non-controlling interest in the acquiree at the acquisition
      date, measured at their fair values as of that date. SFAS 141R requires, among
      other things, that in a business combination achieved through stages (sometimes
      referred to as a “step acquisition”) that the acquirer recognize the
      identifiable assets and liabilities, as well as the non-controlling interest
      in
      the acquiree, at the full amounts of their fair values (or other amounts
      determined in accordance with this Statement).


7





SFAS
      141R
      also requires the acquirer to recognize goodwill as of the acquisition date,
      measured as a residual, which in most types of business combinations will result
      in measuring goodwill as the excess of the consideration transferred plus the
      fair value of any non-controlling interest in the acquiree at the acquisition
      date over the fair values of the identifiable net assets acquired. SFAS 141R
      applies prospectively to business combinations for which the acquisition date
      is
      on or after the beginning of the first annual reporting period beginning on
      or
      after December 15, 2008. We do not expect that the adoption of SFAS 141R will
      have a material impact on our financial statements.





In
      December 2007, the FASB issued SFAS 160, “Non-controlling Interests in
      Consolidated Financial Statements” (“SFAS 160”). This Statement changes the way
      the consolidated income statement is presented. SFAS 160 requires consolidated
      net income to be reported at amounts that include the amounts attributable
      to
      both the parent and the non-controlling interest. It also requires disclosure,
      on the face of the consolidated statement of income, of the amounts of
      consolidated net income attributable to the parent and to the non-controlling
      interest. Currently, net income attributable to the non-controlling interest
      generally is reported as an expense or other deduction in arriving at
      consolidated net income. It also is often presented in combination with other
      financial statement amounts. SFAS 160 results in more transparent reporting
      of
      the net income attributable to the non-controlling interest. This Statement
      is
      effective for fiscal years, and interim periods within those fiscal years,
      beginning on or after December 15, 2008. The Company does not believe that
      SFAS
      160 will have a material impact on its financial statements.





In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      159, “The Fair Value Option for Financial Assets and Financial Liabilities.”
SFAS No. 159 expands the scope of what entities may carry at fair value by
      offering an irrevocable option to record many types of financial assets and
      liabilities at fair value. Changes in fair value would be recorded in an
      entity’s income statement. This accounting standard also establishes
      presentation and disclosure requirements that are intended to facilitate
      comparisons between entities that choose different measurement attributes for
      similar types of assets and liabilities. SFAS No. 159 was effective for the
      Company on January 1, 2008. The Company does not believe that SFAS No. 159
      will
      have a material impact on its financial statements.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This
      standard defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles and expands disclosure about fair
      value
      measurements. SFAS No. 157 applies to other accounting standards that require
      or
      permit fair value measurements. Accordingly, this statement does not require
      any
      new fair value measurement. SFAS No. 157 was effective for the Company on
      January 1, 2008. The Company does not believe that SFAS No. 157 will have a
      material impact on its financial statements.





RECLASSIFICATIONS





Certain
      amounts in the prior year financial statements have been reclassified to conform
      to the current year presentation.




**(2)
      GOING CONCERN CONSIDERATIONS AND MANAGEMENT’S PLAN**





The
      accompanying consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      on
      a going concern basis, which contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business. Accordingly,
      the
      consolidated financial statements do not include any adjustments relating to
      the
      recoverability of assets and classification of liabilities that might be
      necessary should the Company be unable to continue as a going concern. However,
      for the reasons described below, Company management does not believe that cash
      on hand and cash flow generated internally by the Company will be adequate
      to
      fund its limited overhead and other cash requirements beyond a short period
      of
      time. These reasons raise significant doubt about the Company’s ability to
      continue as a going concern.





During
      the year ended December 31, 2007 and the nine months ended September 30, 2008,
      the Company was able to continue operating as a going concern due principally
      to
      funding of $1,250,000 received during 2007 from the sale of secured convertible
      demand promissory notes (the “2007 Convertible Notes”) to an entity controlled
      by Michael S. Egan, its Chairman and Chief Executive Officer, additional funding
      of $380,000 provided from the sale of all of the Company’s rights related to its
      www.search.travel domain name and website to an entity also controlled by Mr.
      Egan in December 2007 and funding of $500,000 received during 2008 under a
      Revolving Loan Agreement with an entity also controlled by Mr. Egan (See Note
      4,
“Debt” and Note 9, “Related Party Transactions” for further
      details).





At
      September 30, 2008, the Company had a net working capital deficit of
      approximately $3,052,000, inclusive of a cash and cash equivalents balance
      of
      approximately $45,000. Such working capital deficit included (i) a total of
      approximately $511,000 in principal and accrued interest owed under the
      aforementioned Revolving Loan Agreement to an entity controlled by Mr. Egan,
      and
      (ii) an aggregate of approximately $2,800,000 in unsecured accounts payable
      and
      accrued expenses owed to vendors and other non-related third parties (of which
      approximately $1,800,000 relates to liabilities of our VOIP telephony service
      discontinued business, with a significant portion of such liabilities related
      to
      charges which have been disputed by theglobe). theglobe believes that its
      ability to continue as a going concern for any significant length of time in
      the
      future will be heavily dependent, among other things, on its ability to prevail
      and avoid making any payments with respect to such disputed vendor charges
      and/or to negotiate favorable settlements (including discounted payment and/or
      payment term concessions) with the aforementioned creditors.


8





As
      more
      fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
      29, 2008, the Company closed upon an agreement whereby it (i) sold the business
      and substantially all of the assets of its Tralliance Corporation subsidiary
      to
      Tralliance Registry Management Company, LLC (“Tralliance Registry Management”)
      and (ii) issued 229,000,000 shares of its Common Stock, (the “Shares”), to The
      Registry Management Company, LLC (“Registry Management”), (the “Purchase
      Transaction”). Tralliance Registry Management and Registry Management are
      entities controlled by Michael S. Egan. The closing of the Purchase Transaction
      resulted in the cancellation of all of the Company’s remaining Convertible Debt,
      related accrued interest and rent and accounts payable owed to entities
      controlled by Mr. Egan as of the date of closing (totaling approximately
      $6,409,800). However, the Company continues to be obligated to repay its
      principal borrowings totaling $500,000, plus accrued interest at the rate of
      10%
      per annum, due to an entity controlled by Mr. Egan under the aforementioned
      Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
      Agreement, including accrued interest, are due and payable by the Company in
      one
      lump sum on the earlier of (i) June 6, 2009, or (ii) the occurrence of an event
      of default as defined in the Revolving Loan Agreement. The Company currently
      has
      no ability to repay this loan when due. All borrowings under the Revolving
      Loan
      Agreement are secured by a pledge of all of the assets of the Company and its
      subsidiaries. After giving effect to the closing of the Purchase Transaction
      and
      the issuance of the Shares thereunder, Mr. Egan now beneficially owns 76.68%
      of
      the Company’s issued and outstanding Common Stock.





As
      additional consideration under the Purchase Transaction, Tralliance Registry
      Management is obligated to pay an earn-out to theglobe equal to 10% (subject
      to
      certain minimums) of Tralliance Registry Management’s “net revenue” (as defined)
      derived from “.travel” names registered by Tralliance Registry Management from
      September 29, 2008 through May 5, 2015 (the “Earn-out”). The minimum Earn-out
      payable by Tralliance Registry Management to theglobe will be at least $300,000
      in the first year, increasing by $25,000 in each subsequent year (pro-rated
      for
      the final year of the Earn-out).





In
      connection with the closing of the Purchase Transaction, the Company also
      entered into a Master Services Agreement with an entity controlled by Mr. Egan
      whereby for a fee of $20,000 per month ($240,000 per annum) such entity will
      provide personnel and services to the Company so as to enable it to continue
      its
      existence as a public company without the necessity of any full-time employees
      of its own. Additionally, commensurate with the closing of the Purchase
      Transaction, Termination Agreements with each of its current executive officers,
      which terminated their previous and then existing employment agreements, were
      executed. Notwithstanding the termination of these employment agreements, each
      of our current executive officers and directors remain as executive officers
      and
      directors of the Company.





Immediately
      following the closing of the Purchase Transaction, theglobe became a shell
      company with no material operations or assets, and no source of revenue other
      than under the “net revenue” earn-out arrangement with Tralliance Registry
      Management. It is expected that theglobe’s future operating expenses as a public
      shell company will consist primarily of expenses incurred under the
      aforementioned Master Services Agreement and other customary public company
      expenses, including legal, audit and other miscellaneous public company
      costs.





**MANAGEMENT’S
      PLANS**





Despite
      the significant reductions in operating and cash flow losses expected to be
      realized from selling its Tralliance business, and as a result of becoming
      a
      shell company, management believes that theglobe will most likely continue
      to
      incur operating and cash flow losses for the foreseeable future. However,
      assuming that no significant unplanned costs are incurred, management believes
      that theglobe’s future losses will be limited. Further, in the event that
      Registry Management is successful in substantially increasing net revenue
      derived from “.travel” name registrations (and as the result maximizing
      theglobe’s earn-out revenue) in the future, theglobe’s prospects for achieving
      profitability will be enhanced.





It
      is the
      Company’s preference to avoid filing for protection under the U.S. Bankruptcy
      Code. However, based upon the Company’s current financial condition as discussed
      above, management believes that additional debt or equity capital will need
      to
      be raised in order for theglobe to continue to operate as a going concern.
      Such
      capital will be needed both to (i) fund expected future operating losses and
      (ii) repay the $500,000 of secured debt and related accrued interest due under
      the Revolving Loan Agreement and a portion of the $2,800,000 unsecured
      indebtedness (assuming theglobe is successful in favorably resolving and
      settling certain disputed and non-disputed vendor charges related to such
      unsecured indebtedness).





Without
      the infusion of additional capital, management does not believe the Company
      will
      have the ability to operate as a going concern for any significant length of
      time beyond December 31, 2008. Any such additional capital would likely come
      from Mr. Egan, or affiliates of Mr. Egan, as the Company currently has no access
      to credit facilities and has traditionally relied upon borrowings from related
      parties to meet short-term liquidity needs. Any such equity capital raised
      would
      likely result in very substantial dilution in the number of outstanding shares
      of the Company’s Common Stock. Given theglobe’s current financial condition and
      the state of the current United States capital markets, it has no current intent
      to seek to acquire, or start, any other business.


9





**(3)****SALE
      OF TRALLIANCE AND SHARE ISSUANCE**





On
      September 29, 2008, theglobe closed upon a previously announced Purchase
      Agreement (the “Purchase Agreement”) dated as of June 10, 2008, by and between
      theglobe.com, its subsidiary, Tralliance, Registry Management and Tralliance
      Registry Management, a wholly-owned subsidiary of Registry Management. In
      connection with the closing, Registry Management assigned certain of its rights
      and obligations with respect to the purchased assets of Tralliance to Tralliance
      Registry Managment. Pursuant to the provisions of the Purchase Agreement,
      theglobe (i) issued two hundred twenty nine million (229,000,000) shares of
      its
      common stock (the “Shares”) (the “Share Issuance”) and (ii) sold the business
      and substantially all of the assets of its subsidiary, Tralliance to Tralliance
      Registry Management (the “Asset Sale” and, together with the Share Issuance, the
“Sale” or “Purchase Transaction”) for (i) consideration totaling approximately
      $6,409,800 and consisting of surrender to theglobe and satisfaction of secured
      demand convertible promissory notes issued by theglobe and held by the Registry
      Management in the aggregate principal amount of $4,250,000, together with all
      accrued and unpaid interest of approximately $1,290,300 through the date of
      the
      closing of the Purchase Transaction and satisfaction of approximately $869,500
      in outstanding rent and miscellaneous fees due and unpaid to Registry Management
      through the date of closing of the Purchase Transaction, and (ii) an earn-out
      equal to 10% of Tralliance Registry Management’s “net revenue” (as defined)
      derived from “.travel” names registered by Tralliance Registry Management from
      September 29, 2008 through May 5, 2015 (the “Earn-out”). Registry Management and
      Tralliance Registry Management are directly or indirectly controlled by Michael
      S. Egan, our Chairman and Chief Executive Officer and principal stockholder
      and
      each of our two remaining Board members own a minority interest in Registry
      Management. After giving effect to the closing of the Purchase Transaction,
      and
      the issuance of the Shares thereunder, Mr. Egan now beneficially owns 76.68%
      of
      the Company’s issued and outstanding Common Stock.





The
      consideration of $6,409,800 received by theglobe has been allocated between
      the
      Share Issuance and the Tralliance Asset Sale based upon proportionate fair
      values as of the date of closing of the Purchase Transaction. Additionally,
      transaction costs consisting primarily of legal, accounting and other
      professional fees, totaling approximately $158,000, were also incurred in
      connection with the Purchase Transaction and allocated between the Share
      Issuance and the Tralliance Asset Sale on the same proportionate fair value
      basis. Such allocations resulted in a net allocation of approximately $3,678,000
      to the Share Issuance, which has been credited to the Company’s Common Stock and
      additional paid in capital accounts in its Unaudited Condensed Consolidated
      Balance Sheet as of September 30, 2008, and a net allocation of approximately
      $2,574,000 to the Tralliance Asset Sale. As a result of such allocations and
      the
      related write-off of assets sold to Tralliance Registry Management of
      approximately $49,000, the Company recorded a gain on the Tralliance Asset
      Sale
      of approximately $2,525,000 in its Unaudited Condensed Consolidated Statement
      of
      Operations for the three and nine months ended September 30, 2008. The Company’s
      operating results for the three and nine months ended September 30, 2008 also
      reflect a net benefit of approximately $1,176,000 related to the write-off
      of
      certain assets and liabilities, including prepaid assets, intangible assets
      and
      deferred revenue, which although not sold to Tralliance Registry Management,
      were deemed to have either no future value to the Company or require no future
      obligations by the Company subsequent to the Tralliance Asset Sale.





Due
      to
      various factors related to the collectability of Earn-out payments from
      Tralliance Registry Management, including the current weak financial condition
      of Tralliance Registry Management, the uncertainty of its ability to become
      profitable in the future, and the fact that such Earn-out payments are payable
      to theglobe over an extended period of time (approximately 6 1⁄2 years), no
      portion of the Earn-out was included in the purchase price for the Purchase
      Transaction. Instead, the Company intends to recognize income related to the
      Earn-out on a prospective basis as and to the extent that future Earn-out
      payment are collected.





Commensurate
      with the closing of the Purchase Agreement on September 29, 2008, the Company
      also entered into several ancillary agreements. These agreements included an
      Earn-out Agreement pursuant to which the aforementioned “net revenue” Earn-out
      would be paid (the “Earn-out Agreement”), and Termination Agreements with each
      of our executive officers (each a “Termination Agreement”). The minimum Earn-out
      amount payable under the Earn-out Agreement will be at least $300,000 in the
      first year of the Earn-out Agreement increasing by $25,000 in each subsequent
      year (pro-rated for the final year of the Earn-out) with incremental Earn-out
      payments to be determined and paid to the Company on an annual basis to the
      extent that 10% of Tralliance Registry Management’s “net revenue” (as defined)
      exceeds the minimum Earn-out amount payable for such year. Pursuant to the
      Termination Agreements, the Company’s employment agreements with each of Michael
      S. Egan, Edward A. Cespedes and Robin Segaul Lebowitz, the Company’s Chief
      Executive Officer, President and Vice President of Finance, all dated August
      1,
      2003, respectively, were terminated. Notwithstanding the termination of these
      employment agreements, each of Messrs. Egan, Cespedes and Ms. Lebowitz remains
      as an officer and director of the Company.





In
      connection with the closing of the Purchase Agreement, the Company also entered
      into a Master Services Agreement (“Services Agreement”) with Dancing Bear
      Investments, Inc. (“Dancing Bear”), which is controlled by Mr. Egan. Under the
      terms of the Services Agreement, for a fee of $20,000 per month ($240,000 per
      annum), Dancing Bear will provide personnel and services to the Company so
      as to
      enable it to continue its existence as a public company without the necessity
      of
      any full-time employees of its own (after an initial transition period that
      ends
      December 31, 2008). The Services Agreement has an initial term of one year
      and
      is subject to renewal or early termination under certain events. Services under
      the Services Agreement include, without limitation, accounting, assistance
      with
      financial reporting, accounts payable, treasury/financial planning, record
      retention and secretarial and investor relations functions.





After
      giving effect to the closing of the Purchase Transaction, theglobe has no
      material operations or assets and no source of revenue other than the Earn-out.
      The Purchase Transaction was not intended to result in theglobe “going private”
and theglobe presently intends to continue as a public company and make all
      requisite filings under the Securities and Exchange Act of 1934 to remain a
      public company.





**(4)
      DEBT**





Debt
      consists of notes payable due to related parties, as summarized
      below:


10





September 30, 2008
            
            December 31, 20072008
                Revolving Loan Notes due to affiliates; due June 6, 2009
            
            $
            500,000
            
            $
            —2007
                Convertible Notes due to affiliates; due on demand
            
            
            —
            
            
            1,250,0002005
                Convertible Notes due to affiliates; due on demand
            
            
            *—*
            
            
            3,400,000500,000
            
            
            4,650,000LESS:
                Short-term portion
            
            
            500,000
            
            
            4,650,000Long-term
                portion
            
            $
            —
            
            $
            —





On
      June
      6, 2008, the Company and its subsidiaries, as guarantors, entered into a
      Revolving Loan Agreement with Dancing Bear Investments, Inc. (“Dancing Bear”),
      pursuant to which Dancing Bear may loan up to $500,000 to the Company on a
      revolving basis (the “Credit Line”). In connection with its entry into the
      Credit Line, the Company borrowed $100,000 under the Credit Line. Subsequently,
      on June 19, 2008, July 10, 2008 and August 6, 2008, the Company made additional
      borrowings of $100,000 each under the Credit Line. On September 3, 2008, the
      Company borrowed the final $100,000 available under the Credit Line. As of
      September 30, 2008, outstanding principal and accrued interest of $500,000
      and
      $10,630, respectively, related to this Credit Line have been reflected as
      current liabilities in our Condensed Consolidated Balance Sheet. All amounts
      under the Credit Line, including principal and accrued interest, will become
      due
      and payable in one lump sum on the first anniversary date of the Credit Line,
      or
      sooner upon the occurrence of an event of default under the loan documentation.
      All funds borrowed under the Credit Line may be prepaid in whole or in part,
      without penalty, at any time during the term of the Credit Line. The Company
      currently has no ability to repay this loan when due. Dancing Bear is controlled
      by Michael S. Egan, our Chairman and Chief Executive Officer. In connection
      with
      the Credit Line, the Company executed and delivered a promissory note to Dancing
      Bear in the amount of $500,000 bearing interest at ten percent (10%) per annum
      on the principal amount then outstanding. The Company’s subsidiaries
      unconditionally guaranteed the Credit Line by entering into an Unconditional
      Guaranty Agreement. All amounts outstanding from time to time under the Credit
      Line are secured by a lien on all of the assets of the Company and its
      subsidiaries pursuant to a Security Agreement with Dancing Bear.





On
      June
      10, 2008, Dancing Bear converted an aggregate of $400,000 of then outstanding
      2007 Convertible Notes due to them by the Company into an aggregate of
      40,000,000 shares of the Company’s Common Stock. Additionally, as more fully
      described in Note 3, “Sale of Tralliance and Stock Issuance,” on September 29,
      2008, the Company closed upon a Purchase Transaction with certain entities
      controlled by Mr. Egan whereby the Company (i) sold the business and
      substantially all of the assets of its Tralliance Corporation subsidiary and
      (ii) issued 229,000,000 shares of its Common Stock to such entities. As part
      of
      the consideration for the Purchase Transaction, the Company’s obligation to
      repay all remaining outstanding principal and accrued interest due under secured
      demand convertible promissory notes to entities controlled by Mr. Egan through
      the date of closing of the Purchase Transaction, including outstanding principal
      and accrued interest related to the 2007 Convertible Notes of $850,000 and
      $139,850, respectively, and outstanding principal and accrued interest related
      to the 2005 Convertible Notes of $3,400,000 and $1,150,465, respectively, were
      terminated.





**(5)
      DISCONTINUED OPERATIONS**





In
      March
      2007, management and the Board of Directors of the Company made the decision
      to
      cease all activities related to its Computer Games businesses, including
      discontinuing the operations of its magazine publications, games distribution
      business and related websites. The Company’s decision to shutdown its computer
      games businesses was based primarily on the historical losses sustained by
      these
      businesses during the recent past and management’s expectations of continued
      future losses. As of September 30, 2008, all significant elements of its
      computer games business shutdown plan have been completed by the Company, except
      for the resolution and payment of remaining outstanding accounts
      payables.





In
      addition, in March 2007, management and the Board of Directors of the Company
      decided to discontinue the operating, research and development activities of
      its
      VoIP telephony services business and terminate all of the remaining employees
      of
      the business. **** The
      Company’s decision to discontinue the operations of its VoIP telephony services
      business was based primarily on the historical losses sustained by the business
      during the past several years, management’s expectations of continued losses for
      the foreseeable future and estimates of the amount of capital required to
      attempt to successfully monetize its business. On April 2, 2007, theglobe agreed
      to transfer to Michael Egan all of its VoIP intellectual property in
      consideration for his agreement to provide the Security in connection with
      the
      MySpace litigation Settlement Agreement (See Note 8, “Litigation,” for further
      discussion). The Company had previously written off the value of the VoIP
      intellectual property as a result of its evaluation of the VoIP telephony
      services business’ long-lived assets in connection with the preparation of the
      Company’s 2004 year-end consolidated financial statements. As of September 30,
      2008, all significant elements of its VoIP telephony services business shutdown
      plan have been completed by the Company, except for the resolution of certain
      vendor disputes and the payment of remaining outstanding vendor
      payables.





Results
      of operations for the Computer Games and VoIP telephony services businesses
      have
      been reported separately as “Discontinued Operations” in the accompanying
      condensed consolidated statements of operations for all periods presented.
      The
      assets and liabilities of the computer games and VoIP telephony services
      businesses have been included in the captions, “Assets of Discontinued
      Operations” and “Liabilities of Discontinued Operations” in the accompanying
      condensed consolidated balance sheets.


11





The
      following is a summary of the assets and liabilities of the discontinued
      operations of the computer games and VoIP telephony services businesses as
      included in the accompanying condensed consolidated balance sheets. A
      significant portion of the net liabilities of discontinued operations at
      September 30, 2008 relate to charges that have been disputed by the Company
      and
      for which estimates have been required.





September 30,
              2008
            
            December 31,
              2007Assets:Computer
                GamesAccounts
                receivable, net
            
            $
            —
            
            $
            30,000—
            
            
            30,000VoIP
                Telephony Services
            
            
            —
            
            
            —Total
                assets of discontinued operations
            
            $
            —
            
            $
            30,000




September 30,
            
            December 31,2008
            
            2007Liabilities:Computer
                GamesAccounts
                payable
            
            $
            35,584
            
            $
            35,584Subscriber
                liability, net
            
            
            4,971
            
            
            5,39740,555
            
            
            40,981VoIP
                Telephony ServicesAccounts
                payable
            
            
            1,573,795
            
            
            1,632,653Other
                accrued expenses
            
            
            228,710
            
            
            228,7101,802,505
            
            
            1,861,363Total
                liabilities of discontinued operations
            
            $
            1,843,060
            
            $
            1,902,344


12





Summarized
      results of operations financial information for the discontinued operations
      of
      our computer games and VoIP telephony services businesses was as
      follows:




Three Months Ended September 30,
            
            Nine Months Ended September 30,2008
            
            2007
            
            2008
            
            2007Computer
                Games:Net
                revenue
            
            $
            —
            
            $
            —
            
            $
            21,695
            
            $
            608,415Income
                (Loss) from operations, net of tax
            
            $
            (979
            )
            $
            3,009
            
            $
            16,810
            
            $
            (143,247
            )VoIP
                Telephony ServicesNet
                revenue
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            630Income
                (Loss) from operations, net of tax
            
            $
            (2,117
            )
            $
            248,187
            
            $
            2,054
            
            $
            (609,569
            )




The
      Company has estimated the costs expected to be incurred in shutting down its
      computer games and VoIP telephony services businesses and has accrued charges
      as
      of September 30, 2008, as follows:




Computer
                Games Division
            
            Contract
              Termination
              Costs
            
            Purchase Commitment
            
            Other
              Costs
            
            TotalShut-Down
                costs expected to be incurred
            
            $
            —
            
            $
            —
            
            $
            24,235
            
            $
            24,235Included
                in liabilities:Charged
                to discontinued operations
            
            $
            115,000
            
            $
            106,000
            
            $
            24,235
            
            
            245,235Payment
                of costs
            
            
            —
            
            
            —
            
            
            (24,235
            )
            
            (24,235
            )Settlements
                credited to discontinued operations
            
            
            (115,000
            )
            
            (106,000
            )
            
            —
            
            
            (221,000
            )$
            —
            
            $
            —
            
            $
            —
            
            $
            —




VoIP
                Telephony Services Division
            
            Contract
              Termination
              CostsShut-Down
                costs expected to be incurred
            
            $
            416,466Included
                in liabilities:Charged
                to discontinued operations
            
            
            428,966Payment
                of costs
            
            $
            (61,000
            )Settlements
                credited to discontinued operations
            
            
            (12,500
            )$
            355,466





Net
      current liabilities of discontinued operations at September 30, 2008 include
      accounts payable and accruals totaling $355,466 related to the estimated
      shut-down costs summarized above.


13





**(6)
      STOCK OPTION PLANS**





We
      have
      several stock option plans under which nonqualified stock options may be granted
      to officers, directors, other employees, consultants and advisors of the
      Company. In general, options granted under the Company’s stock option plans
      expire after a ten-year period and generally vest no later than three years
      from
      the date of grant. Incentive options granted to stockholders who own greater
      than 10% of the total combined voting power of all classes of stock of the
      Company must be issued at 110% of the fair market value of the stock on the
      date
      the options are granted. As of September 30, 2008, there were approximately
      8,021,000 shares available for grant under the Company’s stock option
      plans.





No
      stock
      options were granted by the Company during the nine months ended September
      30,
      2008. A total of 100,000 stock options were granted during the nine months
      ended
      September 30, 2007, with a weighted-average fair value of $0.07. There were
      no
      stock option exercises during the nine months ended September 30, 2008 and
      2007.




Stock
      option activity during the nine months ended September 30, 2008 was as
      follows:





Total Options
            
            Weighted
              Average Exercise
              PriceOutstanding at December
                31, 2007
            
            
            16,340,660
            
            $
            0.40Granted
            
            
            —Exercised
            
            
            —Canceled
                / Expired
            
            
            (1,377,000
            )
            
            1.27Outstanding
                at September 30, 2008
            
            
            14,963,660
            
            $
            0.33Options
                exercisable at September 30, 2008
            
            
            14,841,168
            
            $
            0.33





The
      weighted-average remaining contractual terms of both stock options outstanding
      and stock options exercisable at September 30, 2008 was 5.5 years. The
      aggregate intrinsic value of both options outstanding and stock options
      exercisable at September 30, 2008 was $0.





Stock
      compensation cost is recognized on a straight-line basis over the vesting
      period. Stock compensation expense totaling $20,707 was charged to operations
      during the nine months ended September 30, 2008, including $1,278 of expense
      resulting from the vesting of non-employee stock options. During the nine months
      ended September 30, 2007, stock compensation expense of $136,872 charged to
      operations included $5,796 of expense related to the vesting of non-employee
      stock options and $35,468 from the accelerated vesting of stock options issued
      to terminated employees.





At
      September 30, 2008, there was approximately $10,400 of unrecognized compensation
      expense related to unvested stock options which is expected to be recognized
      over a weighted-average period of 0.9 years.





The
      Company estimates the fair value of each stock option at the grant date by
      using
      the Black Scholes option-pricing model using the following assumptions: no
      dividend yield; a risk free interest rate based on the U.S. Treasury yield
      in
      effect at the time of grant; an expected option life based on historical and
      expected exercise behavior; and expected volatility based on the historical
      volatility of the Company’s stock price, over a time period that is consistent
      with the expected life of the option.





**(7)
      INCOME TAXES**





As
      of
      December 31, 2007, we had net operating loss carryforwards which may be
      potentially available for U.S. tax purposes of approximately $167 million.
      These
      carryforwards expire through 2027. 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 various
      significant changes in our ownership interests, as defined in the Internal
      Revenue Code of 1986, as amended, that occurred prior to December 31, 2007,
      we
      have substantially limited the availability of our net operating loss
      carryforwards.





Primarily
      as a result of the sale of its Tralliance business on September 29, 2008 (see
      Note 3, “Sale of Tralliance and Share Issuance”), the Company recorded total
      income before income taxes of approximately $2,291,000 for the nine months
      ended
      September 30, 2008. The Company believes that it has sufficient net operating
      loss carryforwards available to offset such income for regular income tax
      purposes, and as a result has recorded no federal or state income tax provision
      for the nine months ended September 30, 2008. However, a federal Alternative
      Minimum Tax is expected to be payable on such income. In this regard, an income
      tax expense of $44,919 was provided and accrued as of September 30,
      2008.


14





**(8)
      LITIGATION**





On
      June
      1, 2006, MySpace, Inc. (“MySpace”), a Delaware corporation, filed a lawsuit in
      the United States District Court for the Central District of California against
      theglobe.com, inc. (the “Company”). We were served with the lawsuit on June 6,
      2006. MySpace alleged that the Company sent at least 100,000 unsolicited and
      unauthorized commercial email messages to MySpace members using MySpace user
      accounts improperly established by the Company, that the user accounts were
      used
      in a false and misleading fashion and that the Company's alleged activities
      constituted violations of the CAN-SPAM Act, the Lanham Act and California
      Business & Professions Code § 17529.5 (the “California Act”), as well as
      trademark infringement, false advertising, breach of contract, breach of the
      covenant of good faith and fair dealing, and unfair competition. MySpace sought
      monetary penalties, damages and injunctive relief for these alleged violations.
      It asserted entitlement to recover "a minimum of" $62.3 million of damages,
      in
      addition to three times the amount of MySpace's actual damages and/or
      disgorgement of the Company's purported profits from alleged violations of
      the
      Lanham Act, punitive damages and attorneys’ fees. Subsequent discovery in the
      case disclosed that the total number of unsolicited messages was approximately
      400,000.





On
      February 28, 2007, the Court entered an order (the “Order”) granting in part
      MySpace’s motion for summary judgment, finding that the Company was liable for
      violation of the CAN-SPAM Act and the California Business & Professions
      Code, and for breach of contract (as embodied in MySpace’s “Terms of Service”
contract). The Order also upheld as valid that portion of MySpace’s Terms of
      Service contract which provides for liquidated damages of $50 per email message
      sent after March 17, 2006 in violation of such Terms. The Company estimated
      that
      approximately 110,000 of the emails in question were sent after such date,
      which
      could have resulted in damages of approximately $5.5 million. In addition,
      the
      CAN-SPAM Act provided for statutory damages of between $100 and $300 per email
      sent in violation of the statute. Total damages under CAN-SPAM could therefore
      have ranged between about $40 million to about $120 million. In addition, under
      the California Act, statutory damages of $1,000,000 “per incident” could have
      been assessed.





On
      March
      15, 2007, the Company entered into a Settlement Agreement with MySpace whereby
      it agreed to pay MySpace $2,550,000 on or before April 5, 2007 in exchange
      for a
      mutual release of all claims against one another, including any claims against
      the Company’s directors and officers. As part of the settlement, Michael Egan,
      the Company’s CEO, who is also an affiliate of the Company, agreed to enter into
      an agreement with MySpace on or before April 5 th pursuant
      to which he would, among other things, provide a letter of credit, cash or
      other
      equivalent security (collectively, “Security”) in form and substance
      satisfactory to MySpace. Such Security was to expire and be released (and in
      fact did expire and was released) on the 100 th day
      following the Company’s payment of the foregoing $2,550,000 so long as no
      bankruptcy petition, assignment for the benefit of creditors or like
      liquidation, reorganization or insolvency proceeding was instituted or filed
      related to the Company during such 100-day period. In accordance with SFAS
      No.
      5, “Accounting for Contingencies,” the $2,550,000 payment required by the
      Settlement Agreement was accrued and has been included in current liabilities
      in
      the consolidated balance sheet as of December 31, 2006 and has been reflected
      as
      an expense of discontinued operations in the consolidated statement of
      operations for the year ended December 31, 2006.





On
      April
      2, 2007, theglobe agreed to transfer to Michael Egan all of its VoIP
      intellectual property in consideration for his agreement to provide the Security
      in connection with the Settlement Agreement. On April 13, 2007, Michael Egan
      and
      an entity wholly-owned by Michael Egan, and MySpace entered into a Security
      Agreement, an Indemnity Agreement and an Escrow Agreement (the “Security
      Agreements”) providing for the Security. On April 18, 2007, theglobe paid
      MySpace $2,550,000 in cash as settlement of the claims. MySpace and theglobe
      filed a consent judgment and stipulated permanent injunction with the Court
      on
      April 19, 2007, which among other things, dismissed all claims alleged in the
      lawsuit with prejudice.





On
      and
      after August 3, 2001 six putative shareholder class action lawsuits were filed
      against the Company, certain of its current and former officers and directors
      (the “Individual Defendants”), and several investment banks that were the
      underwriters of the Company's initial public offering and secondary offering.
      The lawsuits were filed in the United States District Court for the Southern
      District of New York. A Consolidated Amended Complaint, which is now the
      operative complaint, was filed in the Southern District of New York 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. The purported class action alleges violations of Sections 11 and 15 of
      the
      Securities Act of 1933 (the “1933 Act”) and Sections 10(b), Rule 10b-5 and 20(a)
      of the Securities Exchange Act of 1934 (the “1934 Act”). Plaintiffs allege that
      the underwriter defendants agreed to allocate stock in the Company's initial
      public offering and its secondary 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 Prospectuses for the Company's initial public
      offering and its secondary offering were 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. On October 9, 2002, the Court
      dismissed the Individual Defendants from the case without prejudice. This
      dismissal disposed of the Section 15 and 20(a) control person claims without
      prejudice. On December 5, 2006, the Second Circuit vacated a decision by the
      district court granting class certification in six of the coordinated cases,
      which are intended to serve as test, or “focus,” cases. The plaintiffs selected
      these six cases, which do not include the Company. On April 6, 2007, the Second
      Circuit denied a petition for rehearing filed by the plaintiffs, but noted
      that
      the plaintiffs could ask the district court to certify more narrow classes
      than
      those that were rejected.





On
      August
      14, 2007, the plaintiffs filed amended complaints in the six focus cases. The
      amended complaints include a number of changes, such as changes to the
      definition of the purported class of investors, and the elimination of the
      individual defendants as defendants. On September 27, 2007, the plaintiffs
      moved
      to certify a class in the six focus cases. On November 14, 2007, the issuers
      and
      the underwriters named as defendants in the six focus cases filed motions to
      dismiss the amended complaints against them. On March 26, 2008, the District
      Court dismissed the Section 11 claims of those members of the putative classes
      in the focus cases who sold their securities for a price in excess of the
      initial offering price and those who purchased outside the previously certified
      class period. With respect to all other claims, the motions to dismiss were
      denied. On October 10, 2008, at the request of the plaintiffs, the plaintiffs’
motion for class certification was withdrawn, without prejudice.





Due
      to
      the inherent uncertainties of litigation, the Company cannot accurately predict
      the ultimate outcome of the matter. We cannot predict whether we will be able
      to
      renegotiate a settlement that complies with the Second Circuit’s mandate.  
If the Company is found liable, we are unable to estimate or predict the
      potential damages that might be awarded, whether such damages would be greater
      than the Company’s insurance coverage, and whether such damages would have a
      material impact on our results of operations or financial condition in any
      future period.





The
      Company is currently a party to certain other claims and disputes arising in
      the
      ordinary course of business, including certain disputes related to vendor
      charges incurred primarily as the result of the failure and subsequent shutdown
      of its discontinued VoIP telephony services business. The Company believes
      that
      it has recorded adequate accruals on its balance sheet to cover such disputed
      charges and is seeking to resolve and settle such disputed charges for amounts
      substantially less than recorded amounts. An adverse outcome in any of these
      matters, however, could materially and adversely effect our financial position,
      utilize a significant portion of our cash resources and adversely affect our
      ability our ability to continue as a going concern (see Note 5, “Discontinued
      Operations”).


15




**(9)**  **RELATED
      PARTY TRANSACTIONS**





As
      more
      fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
      29, 2008, the Company closed upon a definitive agreement whereby it (i) sold
      the
      business and substantially all of the assets of its Tralliance Corporation
      subsidiary to Tralliance Registry Management and (ii) issued 229,000,000 shares
      of its Common Stock (the “Shares”) to Registry Management (the “Purchase
      Transaction”). Tralliance Registry Management and Registry Management are
      entities directly or indirectly controlled by Michael S. Egan, our Chairman
      and
      Chief Executive Officer and principal stockholder, and each of our two remaining
      executive officers and Board members, Edward A. Cespedes, our President, and
      Robin Segaul Lebowitz, our Vice President of Finance, own a minority interest
      in
      Registry Management. After giving effect to the closing of the Purchase
      Transaction and the issuance of the Shares thereunder, Mr. Egan now beneficially
      owns 76.68% of the Company’s issued and outstanding Common Stock.





In
      connection with the Purchase Transaction, the Company received (i) consideration
      totaling approximately $6,409,800 and consisting of the surrender to theglobe
      and satisfaction of secured demand convertible promissory notes issued by
      theglobe and held by Registry Management in the aggregate principal amount
      of
      $4,250,000, together with all accrued and unpaid interest of approximately
      $1,290,300 through the date of closing of the Purchase Transaction and
      satisfaction of approximately $869,500 in outstanding rent and miscellaneous
      fees due and unpaid to the Registry Management through the date of closing
      of
      the Purchase Transaction, and (ii) an earn-out equal to 10% (subject to certain
      minimums) of Tralliance Registry Management’s “net revenue” (as defined) derived
      from “.travel” names registered by Tralliance Registry Management from September
      29, 2008 through May 5, 2015 (the “Earn-out”). The minimum Earn-out payable by
      Tralliance Registry Management to theglobe will be at least $300,000 in the
      first year of the Earn-out Agreement, increasing by $25,000 each subsequent
      year
      (pro-rated for the final year of the Earn-out).





Commensurate
      with the closing of the Purchase Transaction, on September 29, 2008, the Company
      also entered into Termination Agreements with each of its executive officers
      (each a “Termination Agreement”). Pursuant to the Termination Agreements, the
      Company’s employment agreements with each of Michael S. Egan, Edward A. Cespedes
      and Robin Segaul Lebowitz, the Chief Executive Officer, President and Vice
      President of Finance, all dated August 1, 2003, respectively, were terminated.
      Notwithstanding the termination of these employment agreements, each of Messrs.
      Egan, Cespedes and Ms. Lebowitz remains as an officer and director of the
      Company.





In
      connection with the closing of the Purchase Transaction, the Company also
      entered into a Master Services Agreement (“Services Agreement”) with Dancing
      Bear Investments, Inc. (“Dancing Bear”), an entity which is controlled by Mr.
      Egan. Under the terms of the Services Agreement, for a fee of $20,000 per month
      ($240,000 per annum), Dancing Bear will provide personnel and services to the
      Company so as to enable it to continue its existence as a public company without
      the necessity of any full-time employees of its own (after an initial transition
      period that ends December 31, 2008). The Services Agreement has an initial
      term
      of one year and is subject to renewal or early termination under certain events.
      Services under the Services Agreement include, without limitation, accounting,
      assistance with financial reporting, accounts payable, treasury/financial
      planning, record retention and secretarial and investor relations functions.
      A
      total of $667 related to the Services Agreement has been expensed and accrued
      as
      of September 30, 2008.





As
      more
      fully discussed in Note 4 “Debt,” on June 6, 2008, the Company and its
      subsidiaries, as guarantors, entered into a Revolving Loan Agreement with
      Dancing Bear, pursuant to which Dancing Bear may loan up to $500,000 to the
      Company on a revolving basis (the “Credit Line”). In connection with its entry
      into the Credit Line, the Company borrowed $100,000 under the Credit Line.
      Subsequently, on June 19, 2008, July 10, 2008 and August 6, 2008, the Company
      made additional borrowings of $100,000 each under the Credit Line. On September
      3, 2008, the Company borrowed the final $100,000 available under the Credit
      Line. All borrowings under the Credit Line, including accrued interest on
      borrowed funds at the rate of 10% per annum, are due and payable in one lump
      sum
      on the first anniversary date of the Credit Line, or June 6, 2009, or sooner
      upon the occurrence of an event of default under the loan documentation. All
      amounts outstanding from time to time under the Credit Line are secured by
      a
      lien on all of the assets of the Company and its subsidiaries.





Also,
      as
      more fully described in Note 4, “Debt,” on June 10, 2008 Dancing Bear converted
      an aggregate of $400,000 of outstanding 2007 Convertible Notes due to them
      by
      the Company into an aggregate of 40,000,000 shares of the Company’s Common
      Stock.





Several
      entities controlled by the Company’s Chairman and Chief Executive Officer (the
“Related Entities”) have provided services to the Company, including: the lease
      of office space; and the outsourcing of customer services, human resources
      and
      payroll processing functions. During the nine months ended September 30, 2008
      and 2007, $354,389 and $339,298 of expense related to these services was
      recorded, respectively. In connection with the Purchase Transaction discussed
      above and in Note 3, “Sale of Tralliance and Share Issuance,” all of the
      receivables owed by the Company to the Related Entities as of the date of
      closing of the Purchase Transaction, totaling $869,500, were assigned and
      contributed to Registry Management, who then surrendered their right to receive
      payment for such obligations from the Company as part of the consideration
      for
      the Purchase Transaction.





Tralliance
      was a party to a Bulk Registration Co-Marketing Agreement (the “Co-Marketing
      Agreement”) entered into in December 2007 with Labigroup Holdings, LLC
      (“Labigroup”), a private entity controlled by the Company’s Chairman and Chief
      Executive Officer. Our remaining directors also own a minority interest in
      Labigroup. During the nine months ended September 30, 2008, Labigroup registered
      10,595 “.travel” domain names and was charged $42,380 in fees and costs by
      Tralliance under the Co-Marketing Agreement. A total of $12,026 of such fees
      and
      costs remain unpaid at September 30, 2008. Additionally, during the first
      quarter of 2008, Labigroup paid in full the $412,050 balance of fees and costs
      owed to Tralliance under the Co-Marketing Agreement as of December 31, 2007.
      As
      part of the sale of its Tralliance business on September 29, 2008, all of the
      Company’s rights and obligations under the Co-Marketing Agreement were assigned
      to Tralliance Registry Management.




**ITEM
                2.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS**





**FORWARD
      LOOKING STATEMENTS**





This
      Form
      10-Q contains forward-looking statements within the meaning of the federal
      securities laws that relate to future events or our future financial
      performance. In some cases, you can identify forward-looking statements by
      terminology, such as "may," "will," "should," "could," "expect," "plan,"
      "anticipate," "believe," "estimate," "project," "predict," "intend," "potential"
      or "continue" or the negative of such terms or other comparable terminology,
      although not all forward-looking statements contain such terms. In addition,
      these forward-looking statements include, but are not limited to, statements
      regarding:




·
            the
                outcome of pending litigation;·
            our
                ability to negotiate favorable settlements with unsecured
                creditors;·
            our
                ability to successfully resolve certain disputed
                liabilities;·
            our
                estimates or expectations of continued losses;·
            our
                expectations regarding future revenue and
                expenses;




16




·
            our
                ability to raise additional and sufficient capital; and·
            our
                ability to continue to operate as a going
                concern.





These
      statements are only predictions. Although we believe that the expectations
      reflected in these forward-looking statements are reasonable, we cannot
      guarantee future results, levels of activity, performance or achievements.
      We
      are not required to and do not intend to update any of the forward-looking
      statements after the date of this Form 10-Q or to conform these statements
      to
      actual results. In light of these risks, uncertainties and assumptions, the
      forward-looking events discussed in this Form 10-Q might not occur. Actual
      results, levels of activity, performance, achievements and events may vary
      significantly from those implied by the forward-looking statements. A
      description of risks that could cause our results to vary appears under "Risk
      Factors" and elsewhere in this Form 10-Q. 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-K for the year ended December 31, 2007.




**OVERVIEW**





As
      more
      fully discussed in the section below entitled “Sale of Tralliance and Share
      Issuance,” on September 29, 2008, theglobe.com, inc. (the “Company” or
“theglobe”) consummated the sale of the business and substantially all of the
      assets of its Tralliance Corporation subsidiary (“Tralliance”) to an entity
      controlled by Michael S. Egan, the Company’s Chairman and Chief Executive
      Officer. We acquired Tralliance on May 9, 2005 and from the date of acquisition
      until September 29, 2008, Tralliance operated as the registry for the “.travel”
top-level Internet domain.





As
      part
      of the consideration for the sale of its Tralliance business, theglobe will
      receive an earn-out equal to 10% of the “net revenue” derived from “.travel”
names registered by the acquirer, Tralliance Registry Management, from September
      29, 2008 through May 5, 2015 (the “Earn-out”). The minimum Earn-out payable to
      theglobe will be at least $300 thousand in the first year following closing,
      increasing by $25 thousand in each subsequent year (pro-rated for the final
      year
      of the Earn-out). Immediately following the sale of its Tralliance business,
      theglobe became a shell company with no material operations or assets and no
      source of revenue other than under the Earn-out. theglobe presently intends
      to
      continue as a public company and make all the requisite filings under the
      Securities and Exchange Act of 1934. It has no current intent to seek to acquire
      or start any other businesses. It is expected that theglobe’s future operating
      expenses as a public shell company will consist of customary public company
      expenses, including accounting, financial reporting, legal, audit and other
      related public company costs. For financial reporting purposes, theglobe will
      continue to report the financial position and results of operation of its
      Tralliance business as a component of its continuing operations.





In
      March
      2007, management and the Board of Directors of the Company made the decision
      to
      cease all activities related to its computer games and VoIP telephony services
      businesses. Results of operations for the computer games and VoIP telephony
      services businesses have been reported separately as “Discontinued Operations”
in the accompanying condensed consolidated statements of operations for all
      periods presented. The assets and liabilities of the computer games and VoIP
      telephony services have been included in the captions, “Assets of Discontinued
      Operations” and “Liabilities of Discontinued Operations” in the accompanying
      condensed consolidated balance sheets.





**SALE
      OF TRALLIANCE AND SHARE ISSUANCE**





On
      September 29, 2008, the Company closed upon a definitive agreement whereby
      it
      (i) sold the business and substantially all of the assets of its Tralliance
      Corporation subsidiary to Tralliance Registry Management and (ii) issued 229
      million shares of its Common Stock (the “Shares”) to Registry Management (the
“Purchase Transaction”) (see Note 3, “Sale of Tralliance and Share Issuance” in
      the accompanying Notes to Unaudited Condensed Consolidated Financial
      Statements). Tralliance Registry Management and Registry Management are entities
      directly or indirectly controlled by Michael S. Egan, our Chairman and Chief
      Executive Officer and principal stockholder, and each of our two remaining
      executive officers and Board members, Edward A. Cespedes, our President, and
      Robin Segaul Lebowitz, our Vice President of Finance, own a minority interest
      in
      Registry Management. After giving effect to the closing of the Purchase
      Transaction and the issuance of the Shares thereunder, Mr. Egan now beneficially
      owns 76.68% of the Company’s issued and outstanding Common Stock.





In
      connection with the Purchase Transaction, the Company received (i) consideration
      totaling approximately $6.4 million which consisted of the surrender to theglobe
      and satisfaction of secured demand convertible promissory notes issued by
      theglobe and held by Registry Management in the aggregate principal amount
      of
      $4.25 million, together with all accrued and unpaid interest of approximately
      $1.3 million through the date of closing of the Purchase Transaction and
      satisfaction of approximately $870 thousand in outstanding rent and
      miscellaneous fees due and unpaid to the Registry Management through the date
      of
      closing of the Purchase Transaction, and (ii) an earn-out equal to 10% (subject
      to certain minimums) of Tralliance Registry Management’s “net revenue” (as
      defined) derived from “.travel” names registered by Tralliance Registry
      Management from September 29, 2008 through May 5, 2015 (the “Earn-out”). The
      minimum Earn-out payable by Tralliance Registry Management to theglobe will
      be
      at least $300 thousand in the first year of the Earn-out Agreement, increasing
      by $25 thousand each subsequent year (pro-rated for the final year of the
      Earn-out).





Commensurate
      with the closing of the Purchase Transaction, on September 29, 2008, the Company
      also entered into Termination Agreements with each of its executive officers
      (each a “Termination Agreement”). Pursuant to the Termination Agreements, the
      Company’s employment agreements with each of Michael S. Egan, Edward A. Cespedes
      and Robin Segaul Lebowitz, the Chief Executive Officer, President and Vice
      President of Finance, all dated August 1, 2003, respectively, were terminated.
      Notwithstanding the termination of these employment agreements, each of Messrs.
      Egan, Cespedes and Ms. Lebowitz remains as an officer and director of the
      Company.





In
      connection with the closing of the Purchase Transaction, the Company also
      entered into a Master Services Agreement (“Services Agreement”) with Dancing
      Bear Investments, Inc. (“Dancing Bear”), an entity which is controlled by Mr.
      Egan. Under the terms of the Services Agreement, for a fee of $20 thousand
      per
      month ($240 thousand per annum), Dancing Bear will provide personnel and
      services to the Company so as to enable it to continue its existence as a public
      company without the necessity of any full-time employees of its own (after
      an
      initial transition period that ends December 31, 2008). The Services Agreement
      has an initial term of one year and is subject to renewal or early termination
      under certain events. Services under the Services Agreement include, without
      limitation, accounting, assistance with financial reporting, accounts payable,
      treasury/financial planning, record retention and secretarial and investor
      relations functions.




17




**BASIS
      OF PRESENTATION OF CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS**





We
      received a report from our independent accountants, relating to our December
      31,
      2007 audited financial statements, containing a paragraph stating that our
      recurring losses from operations and our accumulated deficit raise substantial
      doubt about our ability to continue as a going concern. Management believes
      that
      the recent sale of its Tralliance business on September 29, 2008 will
      significantly reduce the amount of operating and cash flow losses previously
      sustained by the Company. However, management does not believe that the sale
      of
      its Tralliance business will in itself allow the Company to become profitable
      and generate operating cash flows sufficient to fund its operations and pay
      its
      existing current liabilities (including those liabilities related to its
      discontinued operations) in the foreseeable future. Based upon our current
      cash
      resources and without the infusion of additional capital, management does not
      believe the Company can operate as a going concern for any significant length
      of
      time beyond the end of December 2008. See “Future and Critical Need for Capital”
section of this Management’s Discussion and Analysis of Financial Condition and
      Results of Operations for further details.





Our
      condensed consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      on
      a going concern basis, which contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business. Accordingly,
      our
      condensed consolidated financial statements do not include any adjustments
      relating to the recoverability of assets and classification of liabilities
      that
      might be necessary should we be unable to continue as a going
      concern.





Due
      to
      the sale of Tralliance and the Share Issuance on September 29, 2008, the results
      of operations for the three month period ended September 30, 2008 and the nine
      month period ended September 30, 2008 are not comparable with their
      corresponding periods in the prior year.





**THREE
      MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO**


**THE
      THREE MONTHS ENDED SEPTEMBER 30, 2007**





**CONTINUING
      OPERATIONS**





NET
      REVENUE. Net revenue totaled approximately $2.1 million for the three months
      ended September 30, 2008 as compared to approximately $600 thousand for the
      three months ended September 30, 2007, an increase of approximately $1.5 million
      from the prior year period.   The increase is primarily attributable to
      revenue recognized during the current quarter of approximately $1.5 million
      related to the write-off of deferred revenue as a result of the sale of the
      Company’s Tralliance business on September 29, 2008. See Note 3, “Sale of
      Tralliance and Share Issuance” in the accompanying Notes to Unaudited Condensed
      Consolidated Financial Statements.




COST
      OF
      REVENUE. Cost of revenue totaled approximately $125 thousand for the three
      months ended September 30, 2008, a decrease of $58 thousand from the $183
      thousand reported for the three months ended September 30, 2007.   Cost of
      revenue consists primarily of fees paid to third party service providers which
      furnish outsourced services, including verification of registration eligibility,
      maintenance of the “.travel” directory of consumer-oriented registrant travel
      data, as well as other services. Fees for some of these services vary based
      on
      transaction levels or transaction types. Fees for outsourced services have
      generally been deferred and amortized to cost of revenue over the term of the
      related domain name registration. The decrease in cost of revenue as compared
      to
      the 2007 third quarter was due primarily to a decrease in registration
      eligibility verification costs of approximately $139 thousand due mainly to
      Tralliance’s continued emphasis on performing verification of registration
      eligibility in-house rather than utilizing third party providers. Such decrease
      was partially offset by cost of revenue charges of approximately $101 thousand
      related to the write-off of prepaid registration eligibility verification and
      other prepaid registration fees which were deemed to have no future value as
      a
      result of the sale of the Company’s Tralliance business on September 29, 2008.





SALES
      AND
      MARKETING. Sales and marketing expenses consist primarily of salaries and
      related expenses of sales and marketing personnel, commissions, consulting,
      advertising and marketing costs, public relations expenses and promotional
      activities. Sales and marketing expenses totaled approximately $90 thousand
      for
      the three months ended September 30, 2008 versus $439 thousand for the same
      period in 2007, a decrease of $349. Beginning in the third quarter of 2006
      and
      continuing through 2007, Tralliance engaged several outside parties to promote
      its registry operations and the www.search.travel website internationally.
      These
      engagements were either terminated or renegotiated by the end of 2007 resulting
      in an expense decrease of approximately $150 thousand in the three months ended
      September 30, 2008 as compared to the same period of 2007. Additional decreases
      in web development and software expense of $116 thousand, travel and
      entertainment expense of $44 thousand and advertising expense of $28 thousand
      contributed to the overall decline in sales and marketing expense in the third
      quarter of 2008 as compared to the third quarter of 2007.




18




GENERAL
      AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist
      primarily of salaries and other personnel costs related to management, finance
      and accounting functions, facilities, outside legal and professional fees,
      information-technology consulting, directors and officers insurance, and general
      corporate overhead costs. General and administrative expenses totaled
      approximately $436 thousand in the third quarter of 2008 as compared to $615
      thousand for the same quarter of the prior year, a decrease of approximately
      $179 thousand. Legal and professional fees in the third quarter of 2008
      decreased $159 thousand as compared to the same period of 2007.





RELATED
      PARTY TRANSACTIONS. Related party transaction expense consists of rent for
      the
      Company’s office space and the fees associated with outsourcing the customer
      service, human resources and payroll processing functions to entities controlled
      by theglobe’s management. Related party transactions totaled approximately $105
      thousand in the third quarter of 2008 as compared to $84 thousand in the third
      quarter of 2007; an increase of $21 thousand.





DEPRECIATION
      AND AMORTIZATION. Depreciation and amortization expense totaled approximately
      $299 thousand for the three months ended September 30, 2008 as compared to
      $61
      thousand for the three months ended September 30, 2007. The $238 thousand
      increase is attributable mainly to intangible asset amortization expense of
      approximately $250 thousand recorded in the current year and related to the
      write-off of the remaining net book value of intangible assets which were deemed
      to have no future value as the result of the sale of the Company’s Tralliance
      business on September 29, 2008.





GAIN
      ON
      TRALLIANCE ASSET SALE. During the three months ended September 30, 2008, the
      Company recorded a gain of approximately $2.5 million related to the sale of
      its
      Tralliance business on September 29, 2008.





RELATED
      PARTY INTEREST EXPENSE. Related party interest expense for the third quarter
      of
      2008 was approximately $116 thousand as compared to $860 thousand for the same
      period of 2007, a decrease of approximately $744 thousand. During the third
      quarter of 2007, $750 thousand of non-cash interest expense was recorded related
      to the beneficial conversion features of the $750 thousand in convertible
      promissory notes acquired by an entity controlled by our Chairman and Chief
      Executive Officer during that quarter.





INCOME
      TAXES. The provision for income taxes for the third quarter of 2008 consists
      of
      $45 thousand in federal alternative minimum taxes recorded and accrued as of
      September 30, 2008 (see Note 7,”Income Taxes” in the accompanying Notes to
      Unaudited Condensed Consolidated Financial Statements for further
      details).





**DISCONTINUED
      OPERATIONS**





Discontinued
      operations generated a net loss of approximately $3 thousand for the third
      quarter of 2008 as compared to a net income of $251 thousand during the third
      quarter of 2007 and is summarized as follows:




Computer
              Games
            
            VoIP
              Telephony
              Services
            
            TotalThree
                months ended September 30, 2008:Net
                revenue
            
            $
            —
            
            $
            —
            
            $
            —Operating
                expenses
            
            
            979
            
            
            2,117
            
            
            3,096Other
                income, net
            
            
            —
            
            
            —
            
            
            —$
            (979
            )
            $
            (2,117
            )
            $
            (3,096
            )




Computer
              Games
            
            VoIP
              Telephony
              Services
            
            TotalThree
                months ended September 30, 2007:Net
                revenue
            
            $
            —
            
            $
            —
            
            $
            —Operating
                expenses
            
            
            2,288
            
            
            (231,385
            )
            
            (229,097
            )Other
                income, net
            
            
            5,297
            
            
            16,802
            
            
            22,099$
            3,009
            
            $
            248,187
            
            $
            251,196


The
      net
      credit in operating expenses reported by the VoIP telephony services division
      for the three months ended September 30, 2007 resulted principally from the
      favorable settlement of a disputed vendor contract during that
      quarter.




19




**NINE
      MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO**


**THE
      NINE MONTHS ENDED SEPTEMBER 30, 2007**





**CONTINUING
      OPERATIONS**





NET
      REVENUE. Net revenue totaled approximately $3.2 million for the nine months
      ended September 30, 2008 as compared to approximately $1.7 million for the
      nine
      months ended September 30, 2007, an increase of $1.5 million. The increase
      is
      primarily attributable to revenue recognized during the current period of
      approximately $1.5 million related to the write-off of deferred revenue as
      a
      result of the sale of the Company’s Tralliance business on September 29,
      2008.





COST
      OF
      REVENUE. Cost of revenue totaled $274 thousand for the nine months ended
      September 30, 2008, a decrease of approximately $103 thousand from the $377
      thousand reported for the nine months ended September 30, 2007. The decrease
      in
      cost of revenue as compared to the prior year period was due primarily to a
      decrease in registration eligibility verification costs of approximately $144
      thousand due mainly to Tralliance’s continued emphasis on performing
      verification of registration eligibility in-house rather than utilizing third
      party providers. Additionally, Tralliance brought the hosting of the .travel
      directory in-house in October 2007, generating a cost savings of approximately
      $53 thousand in the current period compared to the prior year. Such decreases
      were partially offset by cost of revenue charges of approximately $101 thousand
      related to the write-off of prepaid registration eligibility verification and
      other prepaid registration fees which were deemed to have no future value as
      a
      result of the sale of the Company’s Tralliance business on September 29, 2008.





SALES
      AND
      MARKETING. Sales and marketing expenses totaled $387 thousand for the nine
      months ended September 30, 2008 versus $1.7 million for the same period in
      2007,
      a decrease of approximately $1.3 million. During the first nine months of 2007,
      sales and marketing costs related to the Company’s search.travel website were
      $467 thousand; the Company sold the www.search.travel website in December 2007.
      In April 2007 Tralliance introduced the .travel domain name in China; the
      one-time cost associated with the launch event was approximately $155 thousand.
      Beginning in the third quarter of 2006 and continuing through 2007 Tralliance
      engaged several outside parties to promote its registry operations
      internationally. These relationships were either terminated or renegotiated
      in
      the fourth quarter of 2007 which resulted in a decrease in sales and marketing
      costs of approximately $468 thousand in the nine months ended September 30,
      2008
      as compared to the same period of 2007. Additionally, public relations cost
      declined $112 thousand in the first nine months of 2008 compared to the same
      period of 2007.





GENERAL
      AND ADMINISTRATIVE EXPENSES. General and administrative expenses totaled
      approximately $1.6 million in the first nine months of 2008 as compared to
      approximately $2.8 million for the same period of the prior year, a decrease
      of
      approximately $1.2 million. During the first nine months of 2007 the Company
      restructured and reduced administrative staff resulting in a $712 thousand
      decrease in personnel cost for the nine months ended September 30, 2008 compared
      to the same period of 2007. Travel and entertainment expense was reduced by
      approximately $165 thousand in the first nine months of 2008 from the comparable
      period of 2007. Also contributing to the overall reduction in general and
      administrative expenses in the first nine months of 2008 as compared to the
      same
      period of 2007 was a reduction of approximately $77 thousand in professional
      fees and an approximate $41 thousand reduction in insurance
      expenses.




RELATED
      PARTY TRANSACTIONS. Related party transaction expense consists of rent for
      the
      Company’s office space and the fees associated with outsourcing the customer
      service, human resources and payroll processing functions to entities controlled
      by theglobe’s management. Related party transactions totaled approximately $389
      thousand for the first nine months of 2008 as compared to approximately $367
      thousand for the first nine months of 2007.




DEPRECIATION
      AND AMORTIZATION. Depreciation and amortization expense totaled approximately
      $399 thousand for the nine months ended September 30, 2008 as compared to $183
      thousand for the nine months ended September 30, 2007. The $216 thousand
      increase is attributable mainly to intangible asset amortization expense of
      approximately $250 thousand recorded in the current year and related to the
      write-off of the remaining net book value of intangible assets which were deemed
      to have no future value as a result of the sale of the Company’s Tralliance
      business on September 29, 2008.





GAIN
      ON
      TRALLIANCE ASSET SALE. During the nine months ended September 30, 2008, the
      Company recorded a gain of approximately $2.5 million related to the sale of
      its
      Tralliance business on September 29, 2008.





RELATED
      PARTY INTEREST EXPENSE. Related party interest expense for the nine months
      ended
      September 30, 2008 was approximately $346 thousand compared to $1.5 million
      in
      the same period of 2007, a $1.2 million decrease. During the second quarter
      and
      third quarter of 2007, a total of 1.25 million of non-cash interest expense
      was
      recorded related to the beneficial conversion features of a total of $1.25
      million in convertible promissory notes acquired by an entity controlled by
      its
      Chairman and Chief Executive Officer.





INTEREST
      INCOME (EXPENSE), NET. Net interest income of approximately $3 thousand was
      reported for the first nine months of 2008 compared to total net interest income
      of $56 thousand reported for the same period of the prior year. As a result
      of
      the Company’s net losses incurred during 2007 and 2008 the Company had a lower
      level of funds available for investment during the 2008 period as compared
      to
      the same period of the prior year.




INCOME
      TAXES. The
      provision for income taxes for the nine months ended September 30, 2008 consists
      of $45 thousand in federal alternative minimum taxes recorded and accrued as
      of
      September 30, 2008 (see Note 7, “Income Taxes” in the accompanying Notes to
      Unaudited Condensed Consolidated Financial Statements for further
      details).




20




**DISCONTINUED
      OPERATIONS**





The
      net
      income from discontinued operations totaled approximately $19 thousand in the
      first nine months of 2008 as compared to a net loss of approximately $753
      thousand during the first nine months of 2007 and is summarized as
      follows:




Computer
              Games
            
            VoIP
              Telephony
              Services
            
            TotalNine
                months ended September 30, 2008:Net
                revenue
            
            $
            21,695
            
            $
            —
            
            $
            21,695Operating
                expenses
            
            
            5,027
            
            
            4,946
            
            
            9,973Other
                income, net
            
            
            142
            
            
            7,000
            
            
            7,142$
            16,810
            
            $
            2,054
            
            $
            18,864




Computer
              Games
            
            VoIP
              Telephony
              Services
            
            TotalNine
                months ended September 30, 2007:Net
                revenue
            
            $
            608,415
            
            $
            630
            
            $
            609,045Operating
                expenses
            
            
            786,218
            
            
            702,634
            
            
            1,488,852Other
                income (expense), net
            
            
            34,556
            
            
            92,435
            
            
            126,991$
            (143,247
            )
            $
            (609,569
            )
            $
            (752,816
            )




As
      discussed earlier, the Company made the decision to shutdown the operation
      of
      both its computer games and VoIP telephony services lines of business in March
      2007.





**LIQUIDITY
      AND CAPITAL RESOURCES**





**CASH
      FLOW ITEMS**





As
      of
      September 30, 2008, theglobe had approximately $45 thousand in cash and cash
      equivalents as compared to approximately $631 thousand as of December 31, 2007.
      Net cash flows used in operating activities of continuing operations totaled
      approximately $915 thousand and $3.2 million, for the nine months ended
      September 30, 2008 and 2007, respectively, or a decrease of approximately $2.3
      million. Such decrease was attributable primarily to a lower net loss from
      continuing operations (after adjustments for the non-cash impacts attributable
      to the Tralliance Asset Sale in the current period and the non-cash impact
      related to beneficial conversion features of debt in the prior year) for the
      nine months ended September 30, 2008 compared to the nine months ended September
      30, 2007.





Approximately
      $17 thousand in net cash flows were used in the operating activities of
      discontinued operations during the nine months ended September 30, 2008 as
      compared to a net cash flow usage of approximately $3.1 million during the
      same
      period of the prior year. Such decrease was attributable to the shutdown of
      the
      Company’s computer games and VoIP telephony services businesses in March
      2007.





Net
      cash
      flows from investing activities and net cash flows from financing activities
      for
      the nine months ended September 30, 2008, included allocations of $65 thousand
      and $93 thousand, respectively, related to transaction costs incurred in
      connection with the Purchase Transaction that was consummated on September
      29,
      2008. Net cash flows from financing activities for the nine months ended
      September 30, 2008 also included proceeds of $500 thousand borrowed under a
      Revolving Loan Agreement with Dancing Bear Investments, Inc., an entity
      controlled by the Company Chairman and Chief Executive Officer. Net cash flows
      from financing activities for the nine months ended September 30, 2007 included
      proceeds of $1.25 million related to secured demand convertible notes issued
      to
      Dancing Bear Investments, Inc.




21




**FUTURE
      AND CRITICAL NEED FOR CAPITAL**





The
      accompanying consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      on
      a going concern basis, which contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business. Accordingly,
      the
      consolidated financial statements do not include any adjustments relating to
      the
      recoverability of assets and classification of liabilities that might be
      necessary should the Company be unable to continue as a going concern. However,
      for the reasons described below, Company management does not believe that cash
      on hand and cash flow generated internally by the Company will be adequate
      to
      fund its limited overhead and other cash requirements beyond a short period
      of
      time. These reasons raise significant doubt about the Company’s ability to
      continue as a going concern.





During
      the year ended December 31, 2007 and the nine months ended September 30, 2008,
      the Company was able to continue operating as a going concern due principally
      to
      funding of $1.25 million received during 2007 from the sale of secured
      convertible demand promissory notes (the “2007 Convertible Notes”) to an entity
      controlled by Michael S. Egan, its Chairman and Chief Executive Officer,
      additional funding of $380 thousand provided from the sale of all of the
      Company’s rights related to its www.search.travel domain name and website to an
      entity also controlled by Mr. Egan in December 2007 and funding of $500 thousand
      received during 2008 under a Revolving Loan Agreement with an entity also
      controlled by Mr. Egan (See Note 4, “Debt” and Note 9, “Related Party
      Transactions” for further details).





At
      September 30, 2008, the Company had a net working capital deficit of
      approximately $3.1 million, inclusive of a cash and cash equivalents balance
      of
      approximately $45 thousand. Such working capital deficit included (i) a total
      of
      approximately $511 thousand in principal and accrued interest owed under the
      aforementioned Revolving Loan Agreement to an entity controlled by Mr. Egan,
      and
      (ii) an aggregate of approximately $2.8 million in unsecured accounts payable
      and accrued expenses owed to vendors and other non-related third parties (of
      which approximately $1.8 million relates to liabilities of our VOIP telephony
      service discontinued business, with a significant portion of such liabilities
      related to charges which have been disputed by theglobe). theglobe believes
      that
      its ability to continue as a going concern for any significant length of time
      in
      the future will be heavily dependent, among other things, on its ability to
      prevail and avoid making any payments with respect to such disputed vendor
      charges and/or to negotiate favorable settlements (including discounted payment
      and/or payment term concessions) with the aforementioned creditors.





As
      more
      fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
      29, 2008, the Company closed upon an agreement whereby it (i) sold the business
      and substantially all of the assets of its Tralliance Corporation subsidiary
      to
      Tralliance Registry Management Company, LLC (“Tralliance Registry Management”)
      and (ii) issued 229 million shares of its Common Stock, (the “Shares”), to The
      Registry Management Company, LLC (“Registry Management”), (the “Purchase
      Transaction”). Tralliance Registry Management and Registry Management are
      entities controlled by Michael S. Egan. The closing of the Purchase Transaction
      resulted in the cancellation of all of the Company’s remaining Convertible Debt,
      related accrued interest and rent and accounts payable owed to entities
      controlled by Mr. Egan as of the date of closing (totaling approximately $6.4
      million). However, the Company continues to be obligated to repay its principal
      borrowings totaling $500 thousand, plus accrued interest at the rate of 10%
      per
      annum, due to an entity controlled by Mr. Egan under the aforementioned
      Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
      Agreement, including accrued interest, are due and payable by the Company in
      one
      lump sum on the earlier of (i) June 6, 2009, or (ii) the occurrence of an event
      of default as defined in the Revolving Loan Agreement. The Company currently
      has
      no ability to repay this loan when due. All borrowings under the Revolving
      Loan
      Agreement are secured by a pledge of all of the assets of the Company and its
      subsidiaries. After giving effect to the closing of the Purchase Transaction
      and
      the issuance of the Shares thereunder, Mr. Egan now beneficially owns 76.68%
      of
      the Company’s issued and outstanding Common Stock.





As
      additional consideration under the Purchase Transaction, Tralliance Registry
      Management is obligated to pay an earn-out to theglobe equal to 10% (subject
      to
      certain minimums) of Tralliance Registry Management’s net revenue (as defined)
      derived from “.travel” names registered by Tralliance Registry Management from
      September 29, 2008 through May 5, 2015 (the “Earn-out”). The minimum Earn-out
      payable by Tralliance Registry Management to theglobe will be at least $300
      thousand in the first year, increasing by $25 thousand in each subsequent year
      (pro-rated for the final year of the Earn-out).





In
      connection with the closing of the Purchase Transaction, the Company also
      entered into a Master Services Agreement with an entity controlled by Mr. Egan
      whereby for a fee of $20 thousand per month ($240 thousand per annum) such
      entity will provide personnel and services to the Company so as to enable it
      to
      continue its existence as a public company without the necessity of any
      full-time employees of its own. Additionally, commensurate with the closing
      of
      the Purchase Transaction, Termination Agreements with each of its current
      executive officers, which terminated their previous and then existing employment
      agreements, were executed. Notwithstanding the termination of these employment
      agreements, each of our current executive officers and directors remain as
      executive officers and directors of the Company.





Immediately
      following the closing of the Purchase Transaction, theglobe became a shell
      company with no material operations or assets, and no source of revenue other
      than under the “net revenue” earn-out arrangement with Tralliance Registry
      Management. It is expected that theglobe’s future operating expenses as a public
      shell company will consist primarily of expenses incurred under the
      aforementioned Master Services Agreement and other customary public company
      expenses, including legal, audit and other miscellaneous public company
      costs.




22




Despite
      the significant reductions in operating and cash flow losses expected to be
      realized from selling its Tralliance business, and as a result of becoming
      a
      shell company, management believes that theglobe will most likely continue
      to
      incur operating and cash flow losses for the foreseeable future. However,
      assuming that no significant unplanned costs are incurred, management believes
      that theglobe’s future losses will be limited. Further, in the event that
      Registry Management is successful in substantially increasing net revenue
      derived from “.travel” name registrations (and as the result maximizing
      theglobe’s earn-out revenue) in the future, theglobe’s prospects for achieving
      profitability will be enhanced.





It
      is the
      Company’s preference to avoid filing for protection under the U.S. Bankruptcy
      Code. However, based upon the Company’s current financial condition as discussed
      above, management believes that additional debt or equity capital will need
      to
      be raised in order for theglobe to continue to operate as a going concern.
      Such
      capital will be needed both to (i) fund expected future operating losses and
      (ii) repay the $500 thousand of secured debt and related accrued interest due
      under the Revolving Loan Agreement and a portion of the $2.8 million unsecured
      indebtedness (assuming theglobe is successful in favorably resolving and
      settling certain disputed and non-disputed vendor charges related to such
      unsecured indebtedness).





Without
      the infusion of additional capital, management does not believe the Company
      will
      have the ability to operate as a going concern for any significant length of
      time beyond December 31, 2008. Any such additional capital would likely come
      from Mr. Egan, or affiliates of Mr. Egan, as the Company currently has no access
      to credit facilities and has traditionally relied upon borrowings from related
      parties to meet short-term liquidity needs. Any such equity capital raised
      would
      likely result in very substantial dilution in the number of outstanding shares
      of the Company’s Common Stock. Given theglobe’s current financial condition and
      the state of the current United States capital markets, it has no current intent
      to seek to acquire, or start, any other business.





**EFFECTS
      OF INFLATION**





Management
      believes that 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. At September 30, 2008 and December 31, 2007, a significant portion
      of
      our net liabilities of discontinued operations relate to charges that have
      been
      disputed by the Company and for which estimates have been required. 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 have required higher degrees of judgment than others
      in their application. These include revenue recognition, valuation of
      receivables, valuation of intangible assets and other long-lived assets and
      capitalization of computer software costs. Our accounting policies and
      procedures related to these areas are summarized below.




23





**REVENUE
      RECOGNITION**




The
      Company’s revenue from continuing operations consists principally of
      registration fees for Internet domain registrations, which generally have terms
      of one year, but may be up to ten years. Such registration fees are reported
      net
      of transaction fees paid to an unrelated third party which serves as the
      registry operator for the Company. Net registration fee revenue is recognized
      on
      a straight line basis over the registrations' terms.





**VALUATION
      OF ACCOUNTS RECEIVABLE**





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, subsequent period collection activity and the need
      to adjust for current economic conditions.





**LONG-LIVED
      ASSETS**





The
      Company's long-lived assets primarily consist of property and equipment,
      capitalized costs of internal-use software, and values attributable to covenants
      not to compete.





Long-lived
      assets held and used by the Company and intangible assets with determinable
      lives are reviewed for impairment whenever events or circumstances indicate
      that
      the carrying amount of assets may not be recoverable in accordance with SFAS
      No.
      144, "Accounting for the Impairment or Disposal of Long-Lived Assets." We
      evaluate recoverability of assets to be held and used by comparing the carrying
      amount of the assets, or the appropriate grouping of assets, to an estimate
      of
      undiscounted future cash flows to be generated by the assets, or asset group.
      If
      such assets are considered to be impaired, the impairment to be recognized
      is
      measured as the amount by which the carrying amount of the assets exceeds the
      fair value of the assets. Fair values are based on quoted market values, if
      available. If quoted market prices are not available, the estimate of fair
      value
      may be based on the discounted value of the estimated future cash flows
      attributable to the assets, or other valuation techniques deemed reasonable
      in
      the circumstances.





**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 the
      expected useful life, or three years.





**IMPACT
      OF RECENTLY ISSUED ACCOUNTING STANDARDS**





In
      December 2007, the FASB issued SFAS 141R, “Business Combinations” (“SFAS 141R”)
      which requires an acquirer to recognize the assets acquired, the liabilities
      assumed, and any non-controlling interest in the acquiree at the acquisition
      date, measured at their fair values as of that date. SFAS 141R requires, among
      other things, that in a business combination achieved through stages (sometimes
      referred to as a “step acquisition”) that the acquirer recognize the
      identifiable assets and liabilities, as well as the non-controlling interest
      in
      the acquiree, at the full amounts of their fair values (or other amounts
      determined in accordance with this Statement).





SFAS
      141R
      also requires the acquirer to recognize goodwill as of the acquisition date,
      measured as a residual, which in most types of business combinations will result
      in measuring goodwill as the excess of the consideration transferred plus the
      fair value of any non-controlling interest in the acquiree at the acquisition
      date over the fair values of the identifiable net assets acquired. SFAS 141R
      applies prospectively to business combinations for which the acquisition date
      is
      on or after the beginning of the first annual reporting period beginning on
      or
      after December 15, 2008. We do not expect that the adoption of SFAS 141R will
      have a material impact on our financial statements.





In
      December 2007, the FASB issued SFAS 160, “Non-controlling Interests in
      Consolidated Financial Statements” (“SFAS 160”). This Statement changes the way
      the consolidated income statement is presented. SFAS 160 requires consolidated
      net income to be reported at amounts that include the amounts attributable
      to
      both the parent and the non-controlling interest. It also requires disclosure,
      on the face of the consolidated statement of income, of the amounts of
      consolidated net income attributable to the parent and to the non-controlling
      interest. Currently, net income attributable to the non-controlling interest
      generally is reported as an expense or other deduction in arriving at
      consolidated net income. It also is often presented in combination with other
      financial statement amounts. SFAS 160 results in more transparent reporting
      of
      the net income attributable to the non-controlling interest. This Statement
      is
      effective for fiscal years, and interim periods within those fiscal years,
      beginning on or after December 15, 2008. The Company does not believe that
      SFAS
      160 will have a material impact on its financial statements.





In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      159, “The Fair Value Option for Financial Assets and Financial Liabilities.”
SFAS No. 159 expands the scope of what entities may carry at fair value by
      offering an irrevocable option to record many types of financial assets and
      liabilities at fair value. Changes in fair value would be recorded in an
      entity’s income statement. This accounting standard also establishes
      presentation and disclosure requirements that are intended to facilitate
      comparisons between entities that choose different measurement attributes for
      similar types of assets and liabilities. SFAS No. 159 was effective for the
      Company on January 1, 2008. The Company does not believe that SFAS No. 159
      will
      have a material impact on its financial statements.




24




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This
      standard defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles and expands disclosure about fair
      value
      measurements. SFAS No. 157 applies to other accounting standards that require
      or
      permit fair value measurements. Accordingly, this statement does not require
      any
      new fair value measurement. SFAS No. 157 was effective for the Company on
      January 1, 2008. The Company does not believe that SFAS No. 157 will have a
      material impact on its financial statements.





**ITEM
      4T. 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 as of September 30, 2008. Based on
      that evaluation, our Chief Executive Officer and our Chief Financial Officer
      have concluded that 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.





Our
      management, with the participation of our Chief Executive Officer and our Chief
      Financial Officer, have evaluated any change in our internal control over
      financial reporting that occurred during the quarter ended September 30, 2008
      that has materially affected, or is reasonably likely to materially affect
      our
      internal control over financial reporting, and have determined there to be
      no
      reportable changes.




**PART
      II - OTHER INFORMATION**


**ITEM
      1. LEGAL PROCEEDINGS**





See
      Note
      8, "Litigation," of the Financial Statements included in this
      Report.





**ITEM
      1A. RISK FACTORS**





In
      addition to the other information in this report and the risk factors set forth
      in our Annual Report on Form 10-K for the year ended December 31, 2007, the
      following factors should be carefully considered in evaluating our business
      and
      prospects.





**RISKS
      RELATING TO OUR BUSINESS GENERALLY**





**WE
      MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN.**





The
      accompanying consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      on
      a going concern basis, which contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business. Accordingly,
      the
      consolidated financial statements do not include any adjustments relating to
      the
      recoverability of assets and classification of liabilities that might be
      necessary should the Company be unable to continue as a going concern. However,
      for the reasons described below, Company management does not believe that cash
      on hand and cash flow generated internally by the Company will be adequate
      to
      fund its limited overhead and other cash requirements beyond a short period
      of
      time. These reasons raise significant doubt about the Company’s ability to
      continue as a going concern.





During
      the year ended December 31, 2007 and the nine months ended September 30, 2008,
      the Company was able to continue operating as a going concern due principally
      to
      funding of $1.25 million received during 2007 from the sale of secured
      convertible demand promissory notes (the “2007 Convertible Notes”) to an entity
      controlled by Michael S. Egan, its Chairman and Chief Executive Officer,
      additional funding of $380 thousand provided from the sale of all of the
      Company’s rights related to its www.search.travel domain name and website to an
      entity also controlled by Mr. Egan in December 2007 and funding of $500 thousand
      received during 2008 under a Revolving Loan Agreement with an entity also
      controlled by Mr. Egan (See Note 4, “Debt” and Note 9, “Related Party
      Transactions” for further details).





At
      September 30, 2008, the Company had a net working capital deficit of
      approximately $3.1 million, inclusive of a cash and cash equivalents balance
      of
      approximately $45 thousand. Such working capital deficit included (i) a total
      of
      approximately $511 thousand in principal and accrued interest owed under the
      aforementioned Revolving Loan Agreement to an entity controlled by Mr. Egan,
      and
      (ii) an aggregate of approximately $2.8 million in unsecured accounts payable
      and accrued expenses owed to vendors and other non-related third parties (of
      which approximately $1.8 million relates to liabilities of our VOIP telephony
      service discontinued business, with a significant portion of such liabilities
      related to charges which have been disputed by theglobe). theglobe believes
      that
      its ability to continue as a going concern for any significant length of time
      in
      the future will be heavily dependent, among other things, on its ability to
      prevail and avoid making any payments with respect to such disputed vendor
      charges and/or to negotiate favorable settlements (including discounted payment
      and/or payment term concessions) with the aforementioned creditors.




25




As
      more
      fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
      29, 2008, the Company closed upon an agreement whereby it (i) sold the business
      and substantially all of the assets of its Tralliance Corporation subsidiary
      to
      Tralliance Registry Management Company, LLC (“Tralliance Registry Management”)
      and (ii) issued 229 million shares of its Common Stock, (the “Shares”), to The
      Registry Management Company, LLC (“Registry Management”), (the “Purchase
      Transaction”). Tralliance Registry Management and Registry Management are
      entities controlled by Michael S. Egan. The closing of the Purchase Transaction
      resulted in the cancellation of all of the Company’s remaining Convertible Debt,
      related accrued interest and rent and accounts payable owed to entities
      controlled by Mr. Egan as of the date of closing (totaling approximately $6.4
      million). However, the Company continues to be obligated to repay its principal
      borrowings totaling $500 thousand, plus accrued interest at the rate of 10%
      per
      annum, due to an entity controlled by Mr. Egan under the aforementioned
      Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
      Agreement, including accrued interest, are due and payable by the Company in
      one
      lump sum on the earlier of (i) June 6, 2009, or (ii) the occurrence of an event
      of default as defined in the Revolving Loan Agreement. The Company currently
      has
      no ability to repay this loan when due. All borrowings under the Revolving
      Loan
      Agreement are secured by a pledge of all of the assets of the Company and its
      subsidiaries. After giving effect to the closing of the Purchase Transaction
      and
      the issuance of the Shares thereunder, Mr. Egan now beneficially owns 76.68%
      of
      the Company’s issued and outstanding Common Stock.





As
      additional consideration under the Purchase Transaction, Tralliance Registry
      Management is obligated to pay an earn-out to theglobe equal to 10% (subject
      to
      certain minimums) of Tralliance Registry Management’s net revenue (as defined)
      derived from “.travel” names registered by Tralliance Registry Management from
      September 29, 2008 through May 5, 2015 (the “Earn-out”). The minimum Earn-out
      payable by Tralliance Registry Management to theglobe will be at least $300
      thousand in the first year, increasing by $25 thousand in each subsequent year
      (pro-rated for the final year of the Earn-out).





In
      connection with the closing of the Purchase Transaction, the Company also
      entered into a Master Services Agreement with an entity controlled by Mr. Egan
      whereby for a fee of $20 thousand per month ($240 thousand per annum) such
      entity will provide personnel and services to the Company so as to enable it
      to
      continue its existence as a public company without the necessity of any
      full-time employees of its own. Additionally, commensurate with the closing
      of
      the Purchase Transaction, Termination Agreements with each of its current
      executive officers, which terminated their previous and then existing employment
      agreements, were executed. Notwithstanding the termination of these employment
      agreements, each of our current executive officers and directors remain as
      executive officers and directors of the Company.





Immediately
      following the closing of the Purchase Transaction, theglobe became a shell
      company with no material operations or assets, and no source of revenue other
      than under the “net revenue” earn-out arrangement with Tralliance Registry
      Management. It is expected that theglobe’s future operating expenses as a public
      shell company will consist primarily of expenses incurred under the
      aforementioned Master Services Agreement and other customary public company
      expenses, including legal, audit and other miscellaneous public company
      costs.





Despite
      the significant reductions in operating and cash flow losses expected to be
      realized from selling its Tralliance business, and as a result of becoming
      a
      shell company, management believes that theglobe will most likely continue
      to
      incur operating and cash flow losses for the foreseeable future. However,
      assuming that no significant unplanned costs are incurred, management believes
      that theglobe’s future losses will be limited. Further, in the event that
      Registry Management is successful in substantially increasing net revenue
      derived from “.travel” name registrations (and as the result maximizing
      theglobe’s earn-out revenue) in the future, theglobe’s prospects for achieving
      profitability will be enhanced.





It
      is the
      Company’s preference to avoid filing for protection under the U.S. Bankruptcy
      Code. However, based upon the Company’s current financial condition as discussed
      above, management believes that additional debt or equity capital will need
      to
      be raised in order for theglobe to continue to operate as a going concern.
      Such
      capital will be needed both to (i) fund expected future operating losses and
      (ii) repay the $500 thousand of secured debt and related accrued interest due
      under the Revolving Loan Agreement and a portion of the $2.8 million unsecured
      indebtedness (assuming theglobe is successful in favorably resolving and
      settling certain disputed and non-disputed vendor charges related to such
      unsecured indebtedness).





Without
      the infusion of additional capital, management does not believe the Company
      will
      have the ability to operate as a going concern for any significant length of
      time beyond December 31, 2008. Any such additional capital would likely come
      from Mr. Egan, or affiliates of Mr. Egan, as the Company currently has no access
      to credit facilities and has traditionally relied upon borrowings from related
      parties to meet short-term liquidity needs. Any such equity capital raised
      would
      likely result in very substantial dilution in the number of outstanding shares
      of the Company’s Common Stock. Given theglobe’s current financial condition and
      the state of the current United States capital markets, it has no current intent
      to seek to acquire, or start, any other business.




26




**WE
      MAY NOT BE SUCCESSFUL IN SETTLING DISPUTED VENDOR CHARGES.**





Our
      balance sheet at September 30, 2008 includes certain material estimated
      liabilities related to disputed vendor charges incurred primarily as the result
      of the failure and subsequent shutdown of our discontinued VoIP telephony
      services business. Although we are seeking to resolve and settle these disputed
      charges for amounts substantially less than recorded amounts, there can be
      no
      assurances that we will be successful in this regard. Additionally, the legal
      and administrative costs of resolving these disputed charges may be expensive.
      An adverse outcome in any of these matters could materially and adversely affect
      our financial position, utilize a significant portion of our cash resources
      and/or require additional capital to be infused into the Company, and adversely
      affect our ability to continue to operate as a going concern. See Note 5,
“Discontinued Operations” in the Notes to Unaudited Condensed Consolidated
      Financial Statements for future details.





**OUR
      NET OPERATING LOSS CARRYFORWARDS MAY BE SUBSTANTIALLY
      LIMITED.**





As
      of
      December 31, 2007, we had net operating loss carryforwards which may be
      potentially available for U.S. tax purposes of approximately **$** 167
      million. These carryforwards expire through 2027. 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
      various significant changes in our ownership interests, as defined in the
      Internal Revenue Code of 1986, as amended, that occurred prior to December
      31,
      2007, we have substantially limited the availability of our net operating loss
      carryforwards. We believe that we have sufficient net operating loss
      carryforwards available to offset taxable income generated during the nine
      months ended September 30, 2008 (except for approximately $45 thousand in
      federal alternative minimum taxes that we believe are payable and have been
      accrued at September 30, 2008).





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




27





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 The Registry Management Company, LLC, Dancing Bear
      Investments, Inc., E&C Capital Partners LLLP, and E&C Capital Partners
      II, LLC, which are our largest stockholders. Mr. Egan is also the controlling
      investor of Certified Vacations Group, Inc. and Labigroup Holdings, LLC,
      entities which have had various ongoing business relationships with the Company.
      Additionally, Mr. Egan is the controlling investor of Tralliance Registry
      Management Company, LLC, an entity which has recently acquired our Tralliance
      business (see Note 3, “Sale of Tralliance and Share Issuance” in the Notes to
      Unaudited Condensed Consolidated Financial Statements for further details).
      Mr.
      Egan has not committed to devote any specific percentage of his business time
      with us. Accordingly, we compete with Mr. Egan's aforementioned other related
      entities for his time.





Our
      President, Treasurer and Chief Financial Officer and Director, Mr. Edward A.
      Cespedes, is also an officer, director or shareholder of other companies,
      including E&C Capital Partners LLLP, E&C Capital Partners II, LLC,
      Labigroup Holdings LLC and The Registry Management Company, LLC. Accordingly,
      we
      must compete for his time.





Our
      Vice
      President of Finance and Director, Ms. Robin Lebowitz is also an officer of
      Dancing Bear Investments, Inc and Certified Vacations Group, Inc. She is also
      an
      officer, director or shareholder of other companies or entities controlled
      by
      Mr. Egan and Mr. Cespedes, including The Registry Management Company,
      LLC.





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. Furthermore, the Company's Board of Directors presently
      is comprised entirely of individuals which are executive officers of theglobe,
      and therefore are not "independent." We intend to review related party
      transactions in the future on a case-by-case basis.





**OUR
      INTERNAL CONTROL OVER FINANCIAL REPORTING WAS NOT EFFECTIVE AS OF DECEMBER
      31,
      2007.**





Based
      upon an evaluation and assessment completed by Company management, we have
      concluded that our internal control over financial reporting was not effective
      as of December 31, 2007.  Our conclusion was based upon the existence of
      certain “material weaknesses” related to the reporting of “.travel” name
      registration data as of December 31, 2007. Because we are a smaller company,
      we
      are not yet required to have our internal control over financial reporting
      audited by our independent public accountants. At the present time, this audit
      will be first required in connection with our annual report as of December
      31,
      2009.





We
      cannot
      assure you that we will be able to adequately remediate the material weaknesses
      that we have identified as of December 31, 2007. However, the existence of
      the
“material weaknesses” identified at December 31, 2007 related solely to internal
      control deficiencies within our Tralliance Corporation subsidiary. The sale
      of
      our Tralliance business to Tralliance Registry Management (as discussed in
      Note
      3, “Sale of Tralliance and Share Issuance” in the accompanying Notes to
      Unaudited Condensed Consolidated Financial Statements) may impact our evaluation
      and assessment of internal control over financial reporting as of December
      31,
      2008. Additionally, we cannot assure you that other material weaknesses will
      not
      be identified by either management or independent public accountants in the
      future. Our failure to remediate our existing material weaknesses, or to
      adequately protect against the occurrence of additional material weaknesses,
      could result in material misstatements of our financial statement, subject
      the
      Company to regulatory scrutiny and/or cause investors to lose confidence in
      our
      reported financial information. Such failure could also adversely affect the
      Company’s operating results or cause the Company to fail to meet its reporting
      obligations.





**WE
      CURRENTLY HAVE NO BUSINESS OPERATIONS AND ARE A SHELL
      COMPANY**





Immediately
      following the closing of the Purchase Transaction, theglobe became a shell
      company with no material operations or assets, and no source of revenue other
      than under the “net revenue” earn-out arrangement with Tralliance Registry
      Management. It is expected that theglobe’s future operating expenses as a public
      shell company will consist primarily of expenses incurred under the
      aforementioned Master Services Agreement and other customary public company
      expenses, including legal, audit and other miscellaneous public company costs.
      Given theglobe’s current financial condition and the state of the current United
      States capital markets, the Company has no current intent to seek to acquire,
      or
      start, any other business.





**RISKS
      RELATING TO OUR COMMON STOCK**




28




**WE
      ARE CONTROLLED BY OUR CHAIRMAN.**





On
      September 29, 2008, in connection with the closing of the Purchase Transaction
      more fully described in Note 3, “Sale of Tralliance and Share Issuance,” in the
      accompanying Unaudited Condensed Consolidated Financial Statements, the Company
      issued 229 million shares of its Common Stock to Registry Management, an entity
      controlled by Michael S. Egan, its Chairman and Chief Executive Officer.
      Previously on June 10, 2008, Dancing Bear Investments, Inc., also an entity
      controlled by Mr. Egan, converted an aggregate of $400 thousand of outstanding
      convertible secured promissory notes due to them by the Company into 40 million
      shares of our Common Stock. As a result of the issuance of the 269 million
      shares under the transactions described above, Mr. Egan’s beneficial ownership
      has been increased to 76.68% of the Company’s issued and outstanding Common
      Stock. Accordingly, Mr. Egan is now in a position to control the vote on all
      corporate actions in the future.





**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 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.





**OUR
      COMMON STOCK IS SUBJECT TO CERTAIN "PENNY STOCK" RULES WHICH MAY MAKE IT A
      LESS
      ATTRACTIVE INVESTMENT.**





Since
      the
      trading price of our Common Stock is less than $5.00 per share and our net
      tangible assets are less than $2.0 million, trading in our Common Stock is
      subject to the requirements of Rule 15g-9 of the Exchange Act. Under Rule 15g-9,
      brokers who recommend penny stocks to persons who are not established customers
      and accredited investors, as defined in the Exchange Act, must satisfy special
      sales practice requirements, including requirements that they make an
      individualized written suitability determination for the purchaser; and receive
      the purchaser's written consent prior to the transaction. The Securities
      Enforcement Remedies and Penny Stock Reform Act of 1990 also requires additional
      disclosures in connection with any trades involving a penny stock, including
      the
      delivery, prior to any penny stock transaction, of a disclosure schedule
      explaining the penny stock market and the risks associated with that market.
      Such requirements may severely limit the market liquidity of our Common Stock
      and the ability of purchasers of our equity securities to sell their securities
      in the secondary market. For all of these reasons, an investment in our equity
      securities may not be attractive to our potential investors.




29




**RISK
      FACTORS RELATING TO THE PURCHASE TRANSACTION AND THE DISPOSITION OF THE
      TRALLIANCE BUSINESS**





**THE
      ANTICIPATED BENEFITS OF THE PURCHASE TRANSACTION MAY NOT BE REALIZED; WE WILL
      CONTINUE TO HAVE A NEED FOR CAPITAL.**





As
      a
      result of the closing of the Purchase Transaction, the Company has been relieved
      of over $6.4 million of obligations under convertible secured demand promissory
      notes and unsecured accounts payables. Additionally, the Company will receive
      an
      Earn-out equal to 10% (subject to certain minimums) of Tralliance Registry
      Management’s “net revenue” (as defined) derived from “.travel” names registeted
      by Tralliance Registry Management from September 29, 2008 through May 5, 2015.
      The minimum Earn-out payable by Tralliance Registry Management to theglobe
      will
      be at least $300 thousand in the first year, increasing by $25 thousand in
      each
      subsequent year (pro-rated for the final year of the Earn-out).





However,
      notwithstanding the fact that the Company’s total liabilities have been
      significantly reduced as a result of the consummation of the Purchase
      Transaction, the Company’s remaining liabilities and obligations are expected to
      significantly exceed its assets for the foreseeable future. Additionally,
      although the consummation of the Purchase Transaction is expected to
      significantly reduce our future losses, we expect to continue to incur operating
      and cash flow losses for the foreseeable future, and be dependent upon our
      ability to raise equity or borrow funds in order to remain in business. There
      can be no assurance that the Company will be successful in raising equity or
      borrowing funds in order to continue as a going concern. Further, as a result
      of
      the sale of its Tralliance business, the Company will no longer have any active
      business operations and will be a shell company with no ability to generate
      future revenue or profits other than through the Earn-out arrangement with
      Tralliance Registry Management.





30





**AS
      A RESULT OF THE CLOSING OF THE PURCHASE AGREEMENT, WE ARE A SHELL COMPANY AND
      ARE SUBJECT TO MORE STRINGENT REPORTING REQUIREMENTS AND CERTAIN RULE 144
      RESTRICTIONS.**





As
      a
      result of the consummation of the Purchase Transaction, we have no or nominal
      operations and assets, and pursuant to Rule 405 and Exchange Act Rule 12b-2,
      we
      will be a shell company. Applicable securities rules prohibit shell companies
      from using a Form S-8 to register securities pursuant to employee compensation
      plans. However, the rules do not prevent us from registering securities pursuant
      to the registration statements. Additionally, Form 8-K requires shell companies
      to provide more detailed disclosure upon completion of a transaction that causes
      it to cease being a shell company. To the extent we acquire a business in the
      future, we must file a current report on Form 8-K containing the information
      required in a registration statement on Form 10, within four business days
      following completion of the transaction together with financial information
      of
      the private operating company. In order to assist the SEC in the identification
      of shell companies, we will also be required to check a box on Form 10-Q and
      Form 10-K indicating that we are a shell company. To the extent that we are
      required to comply with additional disclosure because we are a shell company,
      we
      may be delayed in executing any mergers or acquiring other assets that would
      cause us to cease being a shell company. In addition, the SEC adopted amendments
      to Rule 144 effective February 15, 2008, which do not allow a holder of
      restricted securities of a “shell company” to resell their securities pursuant
      to Rule 144. Preclusion from any prospective purchase using the exemptions
      from
      registration afforded by Rule 144 may make it more difficult for us to sell
      equity securities in the future. ****





**THE
      MARKET PRICE OF THEGLOBE.COM’S COMMON STOCK MAY DECLINE AS A RESULT OF THE
      PURCHASE TRANSACTION.**





The
      market price of our Common Stock may decline as a result of the Purchase
      Transaction if:





·
            the
                sale of the Tralliance business, theglobe’s only remaining business, is
                perceived negatively by investors;
                or




·
            investors
                remain skeptical that theglobe can continue as a going concern or
                identify
                and fund any future business operations or net losses sustained by
                theglobe, including existing and future liabilities related to secured
                debt and unsecured accounts
                payable.





The
      market price of theglobe.com’s Common Stock could also decline as a result of
      unforeseen factors related to the Purchase Transaction.





**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**





(a)
      Unregistered Sales of Equity Securities.





The
      registrant previously reported two separate sales of unregistered equity
      securities that were made during the nine months ended September 30, 2008.
      The
      registrant reported the conversion of $400,000 in principal amount of secured
      demand convertible notes into an aggregate of 40,000,000 shares of theglobe
      Common Stock by Dancing Bear Investments, Inc. on June 10, 2008 in its Report
      on
      Form 8-K filed on June 13, 2008. The registrant also reported the issuance
      of
      229,000,000 shares of theglobe Common Stock to the Registry Management Company,
      LLC in connection with the closing of the Purchase Agreement dated June 10,
      2008
      by and between theglobe, its subsidiary, Tralliance Corporation and The Registry
      Management Company, LLC (the “Purchase Agreement”) in its Report on Form 8-K
      filed on October 3, 2008.




31





(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**





On
      June
      12, 2008 and July 9, 2008, the holders of more than a majority of the
      outstanding shares of theglobe Common Stock acted by written consent without
      a
      meeting of stockholders, to adopt the Purchase Agreement described in Item
      2.
      above and approve the transactions contemplated thereby in accordance with
      Section 228 of Delaware Law. The actions by written consent were previously
      reported by the registrant in its Reports on Form 8-K filed on June 13, 2008
      and
      July 15, 2008, respectively. Reference is made to such Reports for further
      information relating to the vote of such holders.





**ITEM
      5. OTHER INFORMATION**





None.




**ITEM
      6. EXHIBITS**





10.1
            Letter
                of Intent Agreement dated as of February 1, 2008 by and between The
                Registry Management Company, LLC, Tralliance Corporation and theglobe.com,
                inc. (1).





10.2
            Revolving
                Loan Agreement dated as of June 6, 2008 by and between theglobe.com,
                inc.
                and Dancing Bear Investments, Inc.
                (2).





10.3
            $500,000
                Promissory Note dated June 6, 2008
                (2).





10.4
            Unconditional
                Guaranty Agreement dated June 6, 2008
                (2).





10.5
            Security
                Agreement dated June 6, 2008 (2).


10.6
            Purchase
                Agreement dated as of June 10, 2008 by and between theglobe.com,
                inc.,
                Tralliance Corporation and The Registry Management Company, LLC
                (3).





10.7
            Earn-out
                Agreement dated September 29, 2008 by and between theglobe.com, inc.
                and
                Tralliance Registry Management Company, LLC
                (4)





10.8
            Management
                Services Agreement dated September 29, 2008 with Dancing Bear Investments,
                Inc. (4)





10.9
            Termination
                Agreement dated September 29, 2008 with Michael S. Egan
                (4)





10.10
            Termination
                Agreement dated September 29, 2008 with Edward A. Cespedes
                (4)





10.11
            Termination
                Agreement dated September 29, 2008 with Robin Segaul-Lebowitz
                (4)





31.1
            Certification
                of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
                15d-14(a).





31.2
            Certification
                of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
                15d-14(a).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 from our Form 8-K filed on February 7,
      2008.





(2)
      Incorporated by reference from our Form 8-K filed on June 11, 2008.





(3)
      Incorporated by reference from our Form 8-K filed on June 13, 2008.





(4)
      Incorporated by reference from our Form 8-K filed on October 3,
      2008.




32




**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.


*theglobe.com,
                inc.**Dated*
                :  *November 14, 2008*
            By:
            /s/ 
                *Michael S. Egan**Michael
                S. Egan*
              *Chief
                Executive Officer*
              *(Principal
                Executive Officer)*




By:
            /s/ 
                *Edward A. Cespedes**Edward
                A. Cespedes*
              *President
                and Chief Financial Officer*
              *(Principal
                Financial Officer)*




33




**EXHIBIT
      INDEX**




10.1
            Letter
                of Intent Agreement dated as of February 1, 2008 by and between The
                Registry Management Company, LLC, Tralliance Corporation and theglobe.com,
                inc. (1).10.2
            Revolving
                Loan Agreement dated as of June 6, 2008 by and between theglobe.com,
                inc.
                and Dancing Bear Investments, Inc. (2).10.3
            $500,000
                Promissory Note dated June 6, 2008 (2).10.4
            Unconditional
                Guaranty Agreement dated June 6, 2008 (2).10.5
            Security
                Agreement dated June 6, 2008 (2).10.6
            Purchase
                Agreement dated as of June 10, 2008 by and between theglobe.com,
                inc.,
                Tralliance Corporation and The Registry Management Company, LLC
                (3).10.7
            Earn-out
                Agreement dated September 29, 2008 by and between theglobe.com, inc.
                and
                Tralliance Registry Management Company, LLC (4)10.8
            Management
                Services Agreement dated September 29, 2008 with Dancing Bear Investments,
                Inc. (4)10.9
            Termination
                Agreement dated September 29, 2008 with Michael S. Egan
                (4)10.10
            Termination
                Agreement dated September 29, 2008 with Edward A. Cespedes
                (4)10.11
            Termination
                Agreement dated September 29, 2008 with Robin Segaul-Lebowitz
                (4)31.1
            Certification
                of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
                15d-14(a).31.2
            Certification
                of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
                15d-14(a).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 from our Form 8-K filed on February 7,
      2008.





(2)
      Incorporated by reference from our Form 8-K filed on June 11, 2008.





(3)
      Incorporated by reference from our Form 8-K filed on June 13, 2008.




(4)
      Incorporated by reference from our Form 8-K filed on October 3,
      2008.




34