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**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 March 31, 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 o No
x





The
      number of shares outstanding of the Registrant's Common Stock, $.001 par value
      (the "Common Stock") as of May 9, 2008 was 172,484,838.







**THEGLOBE.COM,
      INC.**


**FORM
      10-Q**





TABLE
      OF
      CONTENTS





PART
                I:
            FINANCIAL
                INFORMATIONItem
                1.
            Financial
                StatementsCondensed
                Consolidated Balance Sheets at March 31, 2008 (unaudited) and December
                31,
                2007
            2Unaudited
                Condensed Consolidated Statements of Operations for the three months
                ended
                March 31, 2008 and 2007
            3Unaudited
                Condensed Consolidated Statements of Cash Flows for the three months
                ended
                March 31, 2008 and 2007
            4Notes
                to Unaudited Condensed Consolidated Financial Statements
            5Item
                2.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            13Item
                4T.
            Controls
                and Procedures
            20PART
                II:
            OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings
            20Item
                1A.
            Risk
                Factors
            20Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            23Item
                3.
            Defaults
                Upon Senior Securities
            23Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            23Item
                5.
            Other
                Information
            23Item
                6.
            Exhibits
            23SIGNATURES
            24





**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


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


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**




MARCH 31,
              
              DECEMBER 31,2008
              
              2007(UNAUDITED)ASSETSCurrent
                  Assets:Cash
                  and cash equivalents
              
              $
              335,828
              
              $
              631,198Accounts
                  receivable from related parties
              
              
              16,568
              
              
              416,566Accounts
                  receivable
              
              
              26,636
              
              
              12,213Prepaid
                  expenses
              
              
              186,251
              
              
              173,794Other
                  current assets
              
              
              3,200
              
              
              4,219Net
                  assets of discontinued operations
              
              
              21,574
              
              
              30,000Total
                  current assets
              
              
              590,057
              
              
              1,267,990Property
                  and equipment, net
              
              
              25,037
              
              
              35,748Intangible
                  assets, net
              
              
              329,265
              
              
              368,777Other
                  assets
              
              
              40,000
              
              
              40,000Total
                  assets
              
              $
              984,359
              
              $
              1,712,515LIABILITIES
                  AND STOCKHOLDERS' DEFICITCurrent
                  Liabilities:Accounts
                  payable to related parties
              
              $
              643,846
              
              $
              499,631Accounts
                  payable
              
              
              253,769
              
              
              263,683Accrued
                  expenses and other current liabilities
              
              
              537,358
              
              
              953,826Accrued
                  interest due to related parties
              
              
              1,070,726
              
              
              954,795Notes
                  payable due to related parties
              
              
              4,650,000
              
              
              4,650,000Deferred
                  revenue
              
              
              1,444,142
              
              
              1,443,589Net
                  liabilities of discontinued operations
              
              
              1,878,298
              
              
              1,902,344Total
                  current liabilities
              
              
              10,478,139
              
              
              10,667,868Deferred
                  revenue
              
              
              403,616
              
              
              401,248Total
                  liabilities
              
              
              10,881,755
              
              
              11,069,116Stockholders'
                  Deficit:Common
                  stock, $0.001 par value; 500,000,000 shares authorized;172,484,838
                  shares issued at March 31, 2008 and December 31, 2007
              
              
              172,485
              
              
              172,485Additional
                  paid-in capital
              
              
              290,494,783
              
              
              290,486,232Accumulated
                  deficit
              
              
              (300,564,664
              )
              
              (300,015,318
              )Total
                  stockholders' deficit
              
              
              (9,897,396
              )
              
              (9,356,601
              )Total
                  liabilities and stockholders’ deficit
              
              $
              984,359
              
              $
              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 March 31,2008
              
              2007(UNAUDITED)Net
                  Revenue
              
              $
              543,933
              
              $
              431,742Operating
                  Expenses:Cost
                  of revenue
              
              
              31,692
              
              
              102,185Sales
                  and marketing
              
              
              127,822
              
              
              639,781General
                  and administrative
              
              
              618,066
              
              
              1,088,464Related
                  party transactions
              
              
              153,464
              
              
              136,302Depreciation
              
              
              10,710
              
              
              19,520Intangible
                  asset amortization
              
              
              39,512
              
              
              39,511981,266
              
              
              2,025,763Operating
                  Loss from Continuing Operations
              
              
              (437,333
              )
              
              (1,594,021
              )Other
                  Income (Expense), net:Related
                  party interest expense
              
              
              (115,932
              )
              
              (83,836
              )Interest
                  income
              
              
              2,782
              
              
              50,277Other
                  income
              
              
              172
              
              
              —(112,978
              )
              
              (33,559
              )Loss
                  from Continuing OperationsBefore
                  Income Tax
              
              
              (550,311
              )
              
              (1,627,580
              )Income
                  Tax Provision
              
              
              —
              
              
              —Loss
                  from Continuing Operations
              
              
              (550,311
              )
              
              (1,627,580
              )Discontinued
                  Operations, net of tax
              
              
              965
              
              
              (1,161,036
              )Net
                  Loss
              
              $
              (549,346
              )
              $
              (2,788,616
              )Loss
                  Per Share -Basic
                  and Diluted:Continuing
                  Operations
              
              $
              —
              
              $
              (0.01
              )Discontinued
                  Operations
              
              $
              —
              
              $
              (0.01
              )Net
                  Loss
              
              $
              —
              
              $
              (0.02
              )Weighted
                  Average Common Shares Outstanding
              
              
              172,485,000
              
              
              172,485,000




See
      notes
      to unaudited condensed consolidated financial statements.


3




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


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


Three Months
                Ended March 31,2008
              
              2007(UNAUDITED)Cash
                  Flows from Operating Activities:Net
                  loss
              
              $
              (549,346
              )
              $
              (2,788,616
              )Add
                  back: (income) loss from discontinued operations
              
              
              (965
              )
              
              1,161,036Net
                  loss from continuing operations
              
              
              (550,311
              )
              
              (1,627,580
              )Adjustments
                  to reconcile net loss from continuing operations to net cash flows
                  fromoperating
                  activitiesDepreciation
                  and amortization
              
              
              50,223
              
              
              59,031Employee
                  stock compensation
              
              
              8,125
              
              
              101,520Compensation
                  related to non-employee stock options
              
              
              426
              
              
              3,136Changes
                  in operating assets and liabilitiesAccounts
                  receivable from related parties
              
              
              399,998
              
              
              6,433Accounts
                  receivable
              
              
              (14,423
              )
              
              (7,602
              )Prepaid
                  and other current assets
              
              
              (11,438
              )
              
              1,651Accounts
                  payable to related parties
              
              
              144,215
              
              
              (13,466
              )Accounts
                  payable
              
              
              (9,914
              )
              
              156,694Accrued
                  expenses and other current liabilities
              
              
              (416,468
              )
              
              (239,438
              )Accrued
                  interest due to related parties
              
              
              115,931
              
              
              83,836Deferred
                  revenue
              
              
              2,921
              
              
              165,284Net
                  cash flows from operating activities of continuing
                  operations
              
              
              (280,715
              )
              
              (1,310,501
              )Net
                  cash flows from operating activities of discontinued
                  operations
              
              
              (21,655
              )
              
              (496,872
              )Net
                  cash flows from operating activities
              
              
              (302,370
              )
              
              (1,807,373
              )Cash
                  Flows from Investing Activities:Purchases
                  of property and equipment
              
              
              —
              
              
              (30,593
              )Proceeds
                  from the sale of property and equipment of discontinued
                  operations
              
              
              7,000
              
              
              28,800Net
                  cash flows from investing activities
              
              
              7,000
              
              
              (1,793
              )Net
                  Decrease in Cash and Cash Equivalents
              
              
              (295,370
              )
              
              (1,809,166
              )Cash
                  and Cash Equivalents, at beginning of period
              
              
              631,198
              
              
              5,316,218Cash
                  and Cash Equivalents, at end of period
              
              $
              335,828
              
              $
              3,507,052





See
      notes
      to unaudited condensed consolidated financial statements.


4


**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
      November 14, 2002, the Company entered into the Voice over Internet Protocol
      (“VoIP”) business by acquiring certain VoIP assets. On June 1, 2002, Chairman
      Michael S. Egan and Director Edward A. Cespedes became Chief Executive Officer
      and President of the Company, respectively.





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 4, “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.





As
      of
      March 31, 2008, the Company managed a single line of business consisting of
      Tralliance. See Note 3, “Proposed Tralliance Transaction,” regarding a proposed
      transaction whereby the Company would sell its Tralliance business and issue
      approximately 269,000,000 shares of its Common Stock to a company controlled
      by
      Michael S. Egan, the Company’s Chairman and Chief Executive
      Officer.





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 March 31, 2008 and for the three months ended March 31, 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 March 31, 2008 and the results of its operations and its cash flows
      for the three months ended March 31, 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 collectibility
      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 March 31, 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.


5





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.





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 loss was
      approximately $549 thousand and $2.8 million for the three months ended March
      31, 2008 and 2007, respectively, which approximated the Company's reported
      net
      loss.





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 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. Payments of registration fees are deferred
      when initially received and recognized as revenue on a straight-line basis
      over
      the registrations’ terms.





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 is now 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 preferred
      stock and 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 or if a loss from continuing
      operations is reported.







Due
      to
      the Company's net losses from continuing operations, the effect of potentially
      dilutive securities or common stock equivalents that could be issued was
      excluded from the diluted net loss per common share calculation due to the
      anti-dilutive effect. Such potentially dilutive securities and common stock
      equivalents consisted of the following for the periods ended March
      31:





2008
            
            2007Options
                to purchase common stock
            
            
            15,601,000
            
            
            18,923,000Common
                shares issuable upon exercise of warrants
            
            
            16,911,000
            
            
            16,911,000Common
                shares issuable upon conversion of Convertible Notes
            
            
            193,000,000
            
            
            68,000,000Total
            
            
            225,512,000
            
            
            103,834,000





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).


6





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.





In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how
      the effects of prior year uncorrected misstatements should be considered when
      quantifying misstatements in current year financial statements. SAB No. 108
      requires companies to quantify misstatements using a balance sheet and income
      statement approach and to evaluate whether either approach results in
      quantifying an error that is material in light of relevant quantitative and
      qualitative factors. SAB No. 108 permits existing public companies to initially
      apply its provisions either by (i) restating prior financial statements as
      if
      the “dual approach” had always been used or (ii) recording the cumulative effect
      of initially applying the “dual approach” as adjustments to the carrying value
      of assets and liabilities as of January 1, 2006 with an offsetting adjustment
      recorded to the opening balance of retained earnings. Use of the “cumulative
      effect” transition method requires detailed disclosure of the nature and amount
      of each individual error being corrected through the cumulative adjustment
      and
      how and when it arose. The adoption of this standard did not have a material
      impact on the Company’s financial condition, results of operations or
      liquidity.





In
      June
      2006, the FASB issued Interpretation (“FIN”) No. 48, “Accounting for Uncertainty
      in Income Taxes,” an interpretation of FASB Statement No. 109, “Accounting for
      Income Taxes,” which clarifies accounting for and disclosure of uncertainty in
      tax positions. FIN No. 48 prescribes a recognition threshold and measurement
      attribute for the financial recognition and measurement of a tax position taken
      or expected to be taken in a tax return. The interpretation is effective for
      fiscal years beginning after December 15, 2006. The adoption of FIN No. 48
      did
      not have a material effect on our consolidated financial position, cash flows
      and results of operations.





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 the operation of its businesses beyond a short period of time. These
      reasons raise significant doubt about the Company’s ability to continue as a
      going concern.


7


During
      the year ended December 31, 2007 and the first quarter of 2008, the Company
      was
      able to continue operating as a going concern due principally to funding of
      $1,250,000 received from the sale of secured convertible demand promissory
      notes
      to an entity controlled by Michael Egan, its Chairman and Chief Executive
      Officer. Additionally, in December 2007, additional funding of $380,000 was
      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. At March 31, 2008, the Company had a net working capital deficit of
      approximately $9,888,000, inclusive of a cash and cash equivalents balance
      of
      approximately $336,000. Such working capital deficit included an aggregate
      of
      $4,650,000 in secured convertible demand debt, related accrued interest of
      approximately $1,071,000 and accounts payable totaling approximately $644,000
      due to entities controlled by Mr. Egan (See Note 7, “Related Party Transactions”
for further details). Additionally, such working capital deficit included
      approximately $1,878,000 of net liabilities of discontinued operations, with
      a
      significant portion of such liabilities related to charges which have been
      disputed by the Company.





Notwithstanding
      previous cost reduction actions taken by the Company and its decision to
      shutdown its unprofitable computer games and VoIP telephony services businesses
      in March 2007 (see Note 4, “Discontinued Operations” for further details), the
      Company continues to incur substantial consolidated net losses, although reduced
      in comparison with prior periods, and management believes that the Company
      will
      continue to be unprofitable in the foreseeable future. Based upon the Company’s
      current financial condition, as discussed above, and without the infusion of
      additional capital, management does not believe that the Company will be able
      to
      fund its operations beyond the end of May 2008.





As
      more
      fully discussed in Note 3, “Proposed Tralliance Transaction”, on February 1,
      2008, the Company announced that it had entered into a letter of intent to
      sell
      substantially all of the business and net assets of its Tralliance Corporation
      subsidiary and to issue approximately 269,000,000 shares of its Common Stock
      to
      an entity controlled by Mr. Egan (the “Proposed Tralliance Transaction”). In the
      event that this Proposed Tralliance Transaction is consummated, all of the
      Company’s remaining secured and unsecured debt owed to entities controlled by
      Mr. Egan (which was approximately $5,721,000 and $644,000 at March 31, 2008,
      respectively) will be exchanged or cancelled. Additionally, the consummation
      of
      the Proposed Tralliance Transaction would also result in significant reductions
      in the Company’s cost structure, based upon the elimination of Tralliance’s
      operating expenses. Although substantially all of Tralliance’s revenue would
      also be eliminated, approximately 10% of Tralliance’s future net revenue through
      May 5, 2015 would be essentially retained through the contemplated net revenue
      earn-out provisions of the Proposed Tralliance Transaction. Additionally, the
      consummation of the Proposed Tralliance Transaction would increase Mr. Egan’s
      ownership in the Company to approximately 84% (assuming exercise of all
      outstanding stock options and warrants) and would significantly dilute all
      other
      existing shareholders. The foregoing description is preliminary in nature and
      there may be significant changes between such preliminary terms and the terms
      of
      any final definitive purchase agreement.





**MANAGEMENT’S
      PLANS**





Management
      expects that the consummation of the Proposed Tralliance Transaction will
      significantly reduce the amount of net losses currently being sustained by
      the
      Company. However, management does not believe that the consummation of the
      Proposed Tralliance Transaction 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. Accordingly, assuming
      that the Proposed Tralliance Transaction is consummated, management believes
      that additional capital infusions (although reduced in comparison with the
      amounts of capital required during the Company’s recent past) will continue to
      be needed in order for the Company to continue to operate as a going concern.





In
      the
      event that the Proposed Tralliance Transaction is not consummated, management
      expects that significantly more capital will need to be invested in the Company
      in the near term than would be required in the event that the Proposed
      Tralliance Transaction is consummated. Also, inasmuch as substantially all
      of
      the assets of the Company and its subsidiaries secure the convertible demand
      debt owed to entities controlled by Mr. Egan, in connection with any resulting
      proceeding to collect this debt, such entities could seize and sell the assets
      of the Company and it subsidiaries, any or all of which would have a material
      adverse effect on the financial condition and future operations of the Company,
      including the potential bankruptcy or cessation of business of the
      Company.





It
      is our
      preference to avoid filing for protection under the U.S. Bankruptcy Code.
      However, in order to continue operating as a going concern for any length of
      time beyond May 2008, we believe that we must quickly raise capital. Although
      there is no commitment to do so, any such funds would most likely come from
      Michael Egan or affiliates of Mr. Egan or the Company as the Company currently
      has no access to credit facilities with traditional third parties and has
      historically relied upon borrowings from related parties to meet short-term
      liquidity needs. Any such capital raised would not be registered under the
      Securities Act of 1933 and would not be offered or sold in the United States
      absent registration requirements. Further, any securities issued (or issuable)
      in connection with any such capital raise will likely result in very substantial
      dilution of the number of outstanding shares of the Company’s Common
      Stock.





The
      amount of capital required to be raised by the Company will be dependent upon
      a
      number of factors, including (i) whether or not the Proposed Tralliance
      Transaction is consummated; (ii) our ability to increase Tralliance net revenue
      levels; (iii) our ability to control and reduce operating expenses; and (iv)
      our
      ability to successfully settle disputed and other outstanding liabilities
      related to our discontinued operations. There can be no assurance that the
      Proposed Tralliance Transaction will be consummated nor that the Company will
      be
      successful in raising a sufficient amount of capital, executing any of its
      current or future business plans or in continuing to operate as a going concern
      on a long-term basis. The consolidated financial statements do not include
      any
      adjustments that may result from the outcome of this uncertainty.


8
 **(3)**  **PROPOSED TRALLIANCE TRANSACTION**





On
      February 1, 2008 the Company announced that it had entered into a letter of
      intent to sell substantially all of the business and net assets of its
      Tralliance Corporation subsidiary and to issue approximately 269,000,000 shares
      of its Common Stock, to The Registry Management Company, LLC, a privately held
      entity controlled by Michael S. Egan, theglobe.com’s Chairman, CEO and
      controlling investor (the “Proposed Tralliance Transaction”).





As
      part
      of the purchase consideration for the Proposed Tralliance Transaction, Mr.
      Egan
      and certain of his affiliates will exchange and surrender all of their right,
      title and interest to certain secured demand convertible notes (the “2005
      Convertible Notes and 2007 Convertible Notes”), accrued and unpaid interest
      thereon, as well as accrued and unpaid rent and miscellaneous fees that are
      due
      and outstanding as of the date of the closing of the Proposed Tralliance
      Transaction. At March 31, 2008, amounts due under the 2005 Convertible Notes
      and
      2007 Convertible Notes, accrued and unpaid interest thereon, and accrued and
      unpaid rent and miscellaneous fees totaled approximately $4,650,000, $1,071,000
      and $644,000, respectively, which amounts collectively equal $6,365,000 (see
      Note 7, “Related Party Transactions” for additional details).





As
      additional consideration, The Registry Management Company will pay an earn-out
      to theglobe equal to 10% (subject to certain minimums) of The Registry
      Management Company’s net revenue derived from “.travel” names registered by The
      Registry Management Company through May 5, 2015. The total net present value
      of
      the minimum guaranteed earn-out payments is estimated to be approximately
      $1,300,000, bringing the total purchase consideration for the Proposed
      Tralliance Transaction to approximately $7,665,000 (based upon March 31, 2008
      liability balances as discussed above).





The
      Proposed Tralliance Transaction is subject to the negotiation and closing of
      a
      definitive purchase agreement, receipt of an independent fairness opinion,
      and
      shareholder approval. The Proposed Tralliance Transaction is expected to close
      no earlier that the second quarter of 2008. The foregoing description is
      preliminary in nature and there may be significant changes between such
      preliminary terms and the terms of any final definitive purchase agreement.
      As
      of May 9, 2008, the Company and The Registry Management Company continue to
      work
      toward finalizing a definitive agreement, however as of such date, no definitive
      agreement has been entered into.





**(4)
      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 March 31, 2008, all significant elements of its computer
      games business shutdown plan have been completed by the Company, except for
      the
      collection and payment of remaining outstanding accounts receivables and
      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 6, “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 March 31, 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 consolidate 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.





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 March
      31, 2008 and December 31, 2007 relate to charges that have been disputed by
      the
      Company and for which estimates have been required.


9




March 31,
            
            December 31,2008
            
            2007Assets:Computer
                GamesAccounts
                receivable, net
            
            $
            21,574
            
            $
            30,00021,574
            
            
            30,000VoIP
                Telephony Services
            
            
            —
            
            
            —Total
                assets of discontinued operations
            
            $
            21,574
            
            $
            30,000




March 31,
            
            December 31,2008
            
            2007Liabilities:Computer
                GamesAccounts
                payable
            
            $
            35,583
            
            $
            35,583Subscriber
                liability, net
            
            
            4,989
            
            
            5,39840,572
            
            
            40,981VoIP
                Telephony ServicesAccounts
                payable
            
            
            1,609,016
            
            
            1,632,653Other
                accrued expenses
            
            
            228,710
            
            
            228,7101,837,726
            
            
            1,861,363Total
                liabilities of discontinued operations
            
            $
            1,878,298
            
            $
            1,902,344





Summarized
      results of operations financial information for the discontinued operations
      was
      as follows:





Periods
                Ended March 31,
            
            2008
            
            2007Computer
                Games:Net
                revenue
            
            $
            —
            
            $
            588,499Loss
                from operations, net of tax
            
            $
            (3,906
            )
            $
            (364,474
            )VoIP
                Telephony Services:Net
                revenue
            
            $
            —
            
            $
            374Income
                (Loss) from operations, net of tax
            
            $
            4,871
            
            $
            (796,562
            )


10





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 March 31, 2008, as follows:





Computer
              Games
            
            VoIP
              Telephony
              ServicesTotal
                Estimated Shut-Down Costs Charged to
              Discontinued
                Operations Through March 31, 2008:Contract
                termination costs
            
            $
            —
            
            $
            416,466Other
                costs
            
            $
            24,235
            
            $
            —$
            24,235
            
            $
            416,466Included
                in Liabilities at March 31, 2008:Charged
                to discontinued operations
            
            $
            245,235
            
            $
            428,966Payment
                of costs
            
            
            (24,235
            )
            
            (61,000
            )Settlements
                credited to discontinued operations
            
            
            (221,000
            )
            
            (12,500
            )$
            —
            
            $
            355,466





Net
      current liabilities of discontinued operations at March 31, 2008 include
      accounts payable and accruals totaling approximately $355,466 related to the
      estimated shut-down costs summarized above.




**(5)
      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 March 31, 2008, there were approximately
      7,383,000 shares available for grant under the Company’s stock option
      plans.





No
      stock
      options were granted by the Company during the three months ended March 31,
      2008. A total of 100,000 stock options were granted during the three months
      ended March 31, 2007, with a weighted-average fair value of $0.07. There were
      no
      stock option exercises during the three months ended March 31, 2008 and 2007.




Stock
      option activity during the three months ended March 31, 2008 was as
      follows:


Total Options
              
              Weighted
                Average Exercise
                PriceOutstanding at December
                  31, 2007
              
              
              16,340,660
              
              $
              0.40Granted
              
              
              —Exercised
              
              
              —Canceled
              
              
              (739,500
              )
              
              0.39Outstanding
                  at March 31, 2008
              
              
              15,601,160
              
              $
              0.41Options
                  exercisable at March 31, 2008
              
              
              15,319,552
              
              $
              0.41





The
      weighted-average remaining contractual terms of stock options outstanding and
      stock options exercisable at March 31, 2008 were 6.0 years and 5.9 years,
      respectively. The aggregate intrinsic value of both options outstanding and
      stock options exercisable at March 31, 2008 was $0.





Stock
      compensation cost is recognized on a straight-line basis over the vesting
      period. Stock compensation expense totaling $8,551 was charged to continuing
      operations during the three months ended March 31, 2008, including $426 of
      expense resulting from the vesting of non-employee stock options. During the
      three months ended March 31, 2007, stock compensation expense of $104,656
      charged to continuing operations included $3,136 of expense related to the
      vesting of non-employee stock options and $34,423 from the accelerated vesting
      of stock options issued to terminated employees.


11


At
      March
      31, 2008, there was approximately $38,000 of unrecognized compensation expense
      related to unvested stock options which is expected to be recognized over a
      weighted-average period of 1.3 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.





**(6)
      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.


12


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. We are awaiting a decision from the Court on the class certification
      motion.





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 4, “Discontinued
      Operations”).





**(7)**  **RELATED
      PARTY TRANSACTIONS**





During
      fiscal 2005 and 2007, the Company entered into convertible note purchase
      agreements (the “Agreements”) with certain entities controlled by the Company’s
      Chairman and Chief Executive Officer. At March 31, 2008, outstanding principal
      and accrued interest owed under the Agreements totaled $4,650,000 and
      $1,070,726, respectively. During the three months ended March 31, 2008 and
      2007,
      interest expense related to the Agreements of $115,932 and $83,836,
      respectively, was recorded.





Several
      entities controlled by the Company’s Chairman and Chief Executive Officer 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 three months ended March 31, 2008 and 2007, $142,214
      and
      $128,416 of expense related to these services was recorded, respectively. A
      total of $643,846 incurred during 2007 and the first quarter of 2008 related
      to
      these services remains unpaid and is included within current liabilities at
      March 31, 2008.





During
      the three months ended March 31, 2007, a total of $7,886 in rent expense related
      to office space in New York City, which was subleased from Tralliance’s former
      President, was recorded. This sub-lease was terminated in June
      2007.





Tralliance
      is 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 three months ended March 31, 2008, Labigroup registered
      4,285 “.travel” domain names and was charged $17,140 in fees and costs by
      Tralliance under the Co-Marketing Agreement. A total of $12,724 of such fees
      and
      costs remain unpaid at March 31, 2008. Additionally, during the three months
      ended March 31, 2008, Labigroup paid in full the $412,050 balance of fees and
      costs owed to Tralliance as of December 31, 2007.







**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:


13




·
            executing
                our business plans;·
            our
                ability to increase revenue levels;·
            our
                ability to control and reduce operating expenses;·
            potential
                governmental regulation and taxation;·
            the
                outcome of pending litigation;·
            our
                ability to successfully resolve disputed liabilities;·
            our
                estimates or expectations of continued losses;·
            our
                expectations regarding future revenue and expenses;·
            attracting
                and retaining customers and employees;·
            our
                ability to sell our Tralliance business, including pursuant to the
                Proposed Tralliance Transaction;·
            our
                ability to raise 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
      of
      March 31, 2008, theglobe.com, inc. (the "Company" or "theglobe") managed a
      single line of business, Internet services, consisting of Tralliance Corporation
      (“Tralliance”) which is the registry for the “.travel” top-level Internet
      domain. We acquired Tralliance on May 9, 2005. 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
      businesses have been included in the captions, “Assets of Discontinued
      Operations” and “Liabilities of Discontinued Operations” in the accompanying
      condensed consolidated balance sheets.





**PROPOSED
      TRALLIANCE TRANSACTION**





As
      more
      fully discussed in Note 3, “Proposed Tralliance Transaction” in the accompanying
      Notes to Unaudited Condensed Consolidated Financial Statements, on February
      1,
      2008 the Company announced that it had entered into a letter of intent to sell
      substantially all of the business and net assets of its Tralliance Corporation
      subsidiary and to issue approximately 269 million shares of its common stock
      to
      The Registry Management Company, LLC, a privately held entity controlled by
      Michael S. Egan, theglobe.com’s Chairman, CEO and controlling investor (the
“Proposed Tralliance Transaction”).





As
      part
      of the purchase consideration for the Proposed Tralliance Transaction, Mr.
      Egan
      and certain of his affiliates will exchange and surrender all of their right,
      title and interest to secured convertible demand promissory notes, accrued
      and
      unpaid interest thereon, as well as outstanding rent and miscellaneous fees
      that
      are due and outstanding as of the Closing Date of the Proposed Tralliance
      Transaction. Such liabilities totaled approximately $6.4 million at March 31,
      2008.


14


The
      Proposed Tralliance Transaction is subject to the negotiation and closing of
      a
      definitive purchase agreement, receipt of an independent fairness opinion,
      and
      shareholder approval. The foregoing description is preliminary in nature and
      there may be significant changes between such preliminary terms and the terms
      of
      any final definitive purchase agreement. The Proposed Tralliance Transaction
      is
      expected to close no earlier than the second quarter of 2008 .





**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. The Company continues
      to
      incur substantial consolidated net losses and management believes the Company
      will continue to be unprofitable and use cash in its operations for 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 beyond the end of May 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.





**RESULTS
      OF OPERATIONS**





**THREE
      MONTHS ENDED MARCH 31, 2008 COMPARED TO**


**THE
      THREE MONTHS ENDED MARCH 31, 2007**





**CONTINUING
      OPERATIONS**





NET
      REVENUE. Net revenue totaled $544 thousand for the three months ended March
      31,
      2008 as compared to $432 thousand for the three months ended March 31, 2007,
      an
      increase of approximately $112 thousand, or 26%, from the prior year period.
        Net revenue attributable to domain name registrations is recognized as
      revenue on a straight-line basis over the term of the registrations. Total
      domain names registered as of the end of the first quarter of 2008 was 199,510,
      of which 168,993 were registered under our bulk purchase program established
      in
      December 2007 and 30,517 names registered under our standard program. As of
      March 31, 2007, there were 25,240 .travel names registered.





COST
      OF
      REVENUE. Cost of revenue totaled $32 thousand for the three months ended March
      31, 2008, a decline of $70 thousand, or 69%, from the $102 thousand reported
      for
      the three months ended March 31, 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 are generally deferred and
      amortized to cost of revenue over the term of the related domain name
      registration. Cost of revenue as a percent of net revenue was approximately
      6%
      for the first quarter of 2008 as compared to 24% for the same period of 2007.
      The decline in cost of revenue as compared to the 2007 first quarter was due
      primarily to Tralliance’s continued emphasis on performing verification of
      registration eligibility in-house rather than utilizing third party providers,
      as well as the termination of an agreement to outsource this process.
      Additionally, Tralliance brought the hosting of the .travel directory in-house
      in October 2007 generating a savings of approximately $29 thousand in the three
      months ended March 31, 2008 as compared to the same period of 2007.





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 $128 thousand for the three
      months ended March 31, 2008 versus $640 thousand for the same period in 2007.
      Beginning in the third quarter of 2006 and continuing through 2007, Tralliance
      engaged several outside parties to promote our registry operations and the
      www.search.travel website internationally. These engagements were either
      terminated or renegotiated by the end of 2007 which resulted in a decrease
      in
      sales and marketing costs of approximately $241 thousand as compared to the
      first quarter of 2007. Additional decreases in public relations, $99 thousand,
      and advertising, $75 thousand, contributed to the overall decline in sales
      and
      marketing expenses in the first quarter of 2008 as compared to the first quarter
      of 2007. We sold our rights to the www.search.travel website
      in December 2007 and as a result incurred no sales or marketing expenses related
      to such website in the quarter ended March 31, 2008.





GENERAL
      AND ADMINISTRATIVE. 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 $618 thousand in the first quarter of 2008 as compared to
      approximately $1.1 million for the same quarter of the prior year, a decline
      of
      $470 thousand, or approximately 43%. During the second quarter of 2007 the
      Company reduced its administrative headcount resulting in a decrease in
      personnel costs of approximately $384 thousand in the three months ended March
      31, 2008 as compared to the prior year. Travel and entertainment expense also
      declined by $124 thousand in the first quarter of 2008 as compared to the three
      months ended March 31, 2007.


15


RELATED
      PARTY TRANSACTIONS. Related party transactions expense consist of rent for
      the
      Company’s office space and the fees associated with the outsourcing of the
      customer service, human resource and payroll processing functions to entities
      controlled by theglobe’s management. Related party transactions expense totaled
      approximately $153 thousand for the three months ended March 31, 2008, a $17
      thousand increase from the $136 thousand recognized in the same period in 2007.
      In November 2007, the Company increased the scope of customer services provided
      by an entity controlled by our Chairman, which resulted in a $93 thousand
      increase in related party transactions expense in the three months ended March
      31, 2008 versus the three months ended March 31, 2007. Partially offsetting
      this
      increase was a $69 thousand reduction in related party rent expense in the
      first
      quarter of 2008 as compared to the same period the previous year.




DEPRECIATION
      AND AMORTIZATION. Depreciation and amortization expense totaled $50 thousand
      for
      the three months ended March 31, 2008 as compared to $59 thousand for the three
      months ended March 31, 2007, or a decline of $9 thousand.





RELATED
      PARTY INTEREST EXPENSE. Related party interest expense for the first quarter
      of
      2008 was $116 thousand as compared to $84 thousand for the same quarter of
      2007,
      reflecting increased borrowings made by the Company during the second and third
      quarters of 2007.





INTEREST
      INCOME. Interest income of $3 thousand was reported for the first quarter of
      2008 compared to interest income of $50 thousand reported for the first quarter
      of the prior year. As a result of the Company’s net loss incurred during 2007,
      the Company had a lower level of funds available for investment during the
      first
      quarter of 2008 as compared to the same quarter of the prior year.




INCOME
      TAXES. No tax benefit was recorded for the losses incurred during the first
      quarter of 2008 or the first quarter of 2007 as we recorded a 100% valuation
      allowance against our otherwise recognizable deferred tax assets due to the
      uncertainty surrounding the timing or ultimate realization of the benefits
      of
      our net operating loss carryforwards in future periods. 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 2026. 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, we have substantially limited the availability of our net operating
      loss carryforwards. These net operating loss carryforwards may be further
      adversely impacted if the Proposed Tralliance Transaction is consummated. There
      can be no assurance that we will be able to utilize any net operating loss
      carryforwards in the future.




**DISCONTINUED
      OPERATIONS**





The
      income from discontinued operations, net of income taxes totaled $965 in the
      first quarter of 2008 as compared to a net loss of approximately $1.2 million
      during the first quarter of 2007 and is summarized as follows:




Computer
              Games
            
            VoIP
              Telephony
              Services
            
            TotalThree
                months ended March 31, 2008:Net
                revenue
            
            $
            —
            
            $
            —
            
            $
            —Operating
                expenses
            
            
            (4,048
            )
            
            (2,129
            )
            
            (6,177
            )Other
                income, net
            
            
            142
            
            
            7000
            
            
            7142$
            (3,906
            )
            $
            4,871
            
            $
            965




Computer
              Games
            
            VoIP
              Telephony
              Services
            
            TotalThree
                months ended March 31, 2007:Net
                revenue
            
            $
            588,499
            
            $
            374
            
            $
            588,873Operating
                expenses
            
            
            (952,973
            )
            
            (830,529
            )
            
            (1,783,502
            )Other
                income, net
            
            
            —
            
            
            33,593
            
            
            33,593$
            (364,474
            )
            $
            (796,562
            )
            $
            (1,161,036
            )




16





**LIQUIDITY
      AND CAPITAL RESOURCES**


**CASH
      FLOW ITEMS**





As
      of
      March 31, 2008, we had approximately $336 thousand in cash and cash equivalents
      as compared to $631,000 as of December 31, 2007. Net cash flows used in
      operating activities of continuing operations totaled approximately $281
      thousand and $1.3 million, for the three months ended March 31, 2008 and 2007,
      respectively, or a decrease of approximately $1.0 million. Such decrease was
      attributable primarily to a lower net loss from continuing operations for the
      three months ended March 31, 2008 compared to the three months ended March
      31,
      2007.





A
      total
      of $22 thousand in net cash flows were used in the operating activities of
      discontinued operations during the first quarter of 2008 as compared to a use
      of
      approximately $497 thousand of cash in operating activities of discontinued
      operations 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 31, 2007





**FUTURE
      AND CRITICAL NEED FOR CAPITAL**





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
      the
      operation of its businesses beyond a short period of time. Additionally, we
      have
      received a report from our independent registered public accountants, relating
      to our December 31, 2007 audited financial statements, containing an explanatory
      paragraph stating that our recurring losses from operations and our accumulated
      deficit raise substantial doubts about our ability to continue as a going
      concern.





During
      the year ended December 31, 2007 and the first quarter of 2008, the Company
      was
      able to continue operating as a going concern due principally to funding of
      $1.25 million received from the sale of secured convertible demand promissory
      notes to an entity controlled by Michael Egan, its Chairman and Chief Executive
      Officer. Additionally, in December 2007, funding of $380 thousand was provided
      from the sale of all of the Company’s rights related to its www.search.travel
      domain name and website to an entity controlled by Mr. Egan. At March 31, 2008,
      the Company had a net working capital deficit of approximately $9.9 million,
      inclusive of a cash and cash equivalents balance of approximately $336 thousand.
      Such working capital deficit included an aggregate of $4.65 million in secured
      convertible demand debt, related accrued interest of approximately $1.1 million
      and accounts payable totaling approximately $644 thousand due to entities
      controlled by Mr. Egan (See Note 7, “Related Party Transactions” in the
      accompanying Notes to Unaudited Condensed Consolidated Financial Statements
      for
      further details). Additionally, such working capital deficit included
      approximately $1.9 million of net liabilities of discontinued operations, with
      a
      significant portion of such liabilities related to charges which are disputed
      by
      the Company.





Notwithstanding
      previous cost reduction actions taken by the Company and its decision to
      shutdown its unprofitable computer games and VoIP telephony services businesses
      in March 2007 (see Note 4, “Discontinued Operations” in the accompanying Notes
      to Consolidated Financial Statements), the Company continues to incur
      substantial consolidated net losses, although reduced in comparison with prior
      periods, and management believes that the Company will continue to be
      unprofitable in the foreseeable future. Based upon the Company’s current
      financial condition, as discussed above, and without the infusion of additional
      capital, management does not believe that the Company will be able to fund
      its
      operations beyond the end of May 2008.





As
      more
      fully discussed in Note 3, “Proposed Tralliance Transaction” in the Notes to
      Unaudited Condensed Consolidated Financial Statements, on February 1, 2008,
      the
      Company announced that it had entered into a letter of intent to sell
      substantially all of the business and net assets of its Tralliance Corporation
      subsidiary and to issue approximately 269 million shares of its common stock
      to
      an entity controlled by Mr. Egan (the “Proposed Tralliance Transaction”). In the
      event that this Proposed Tralliance Transaction is consummated, all of the
      Company’s remaining secured and unsecured debt owed to entities controlled by
      Mr. Egan (which was approximately $5.7 million and $644 thousand at March 31,
      2008, respectively) will be exchanged or cancelled. Additionally, the
      consummation of the Proposed Tralliance Transaction would result in significant
      reductions in the Company’s cost structure, based upon the elimination of
      Tralliance’s operating expenses. Although substantially all of Tralliance’s
      revenue would also be eliminated, approximately 10% of Tralliance’s future net
      revenue through May 5, 2015 would essentially be retained through the
      contemplated net revenue earn-out provisions of the Proposed Tralliance
      Transaction. Additionally, the consummation of the Proposed Tralliance
      Transaction would increase Mr. Egan’s ownership in the Company to approximately
      84% (assuming exercise of all outstanding stock options and warrants) and would
      significantly dilute all other existing shareholders. The foregoing description
      is preliminary in nature and there may be significant changes between such
      preliminary terms and the terms of any final definitive purchase
      agreement.





Management
      expects that the consummation of the Proposed Tralliance Transaction will
      significantly reduce the amount of net losses currently being sustained by
      the
      Company. However, management does not believe that the consummation of the
      Proposed Tralliance Transaction 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. Accordingly, assuming
      that the Proposed Tralliance Transaction is consummated, management believes
      that additional capital infusions (although reduced in comparison with the
      amounts of capital required during the Company’s recent past) will continue to
      be needed in order for the Company to continue to operate as a going concern.


17


In
      the
      event that the Proposed Tralliance Transaction is not consummated, management
      expects that significantly more capital will need to be invested in the Company
      in the near term than would be required in the event that the Proposed
      Tralliance Transaction is consummated. Also, inasmuch as substantially all
      of
      the assets of the Company and its subsidiaries secure the convertible demand
      debt owed to entities controlled by Mr. Egan, in connection with any resulting
      proceeding to collect this debt, such entities could seize and sell the assets
      of the Company and it subsidiaries, any or all of which would have a material
      adverse effect on the financial condition and future operations of the Company,
      including the potential bankruptcy or cessation of business of the
      Company.





It
      is our
      preference to avoid filing for protection under the U.S. Bankruptcy Code.
      However, in order to continue operating as a going concern for any length of
      time beyond May 2008, we believe that we must quickly raise capital. Although
      there is no commitment to do so, any such funds would most likely come from
      Michael Egan or affiliates of Mr. Egan or the Company as the Company currently
      has no access to credit facilities with traditional third parties and has
      historically relied upon borrowings from related parties to meet short-term
      liquidity needs. Any such capital raised would not be registered under the
      Securities Act of 1933 and would not be offered or sold in the United States
      absent registration requirements. Further, any securities issued (or issuable)
      in connection with any such capital raise will likely result in very substantial
      dilution of the number of outstanding shares of the Company’s common
      stock.





The
      amount of capital required to be raised by the Company will be dependent upon
      a
      number of factors, including (i) whether or not the Proposed Tralliance
      Transaction is consummated; (ii) our ability to increase Tralliance net revenue
      levels; (iii) our ability to control and reduce operating expenses; and (iv)
      our
      ability to successfully settle disputed and other outstanding liabilities
      related to our discontinued operations. There can be no assurance that the
      Proposed Tralliance Transaction will be consummated nor that the Company will
      be
      successful in raising a sufficient amount of capital, executing any of its
      current or future business plans or in continuing to operate as a going concern
      on a long-term basis.





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.” 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 also 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. We may also incur additional costs under state blue sky laws if we
      sell
      equity due to our delisting.





**EFFECTS
      OF INFLATION**





Due
      to
      relatively low levels of inflation in 2008 and 2007, 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 March 31, 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 require higher degrees of judgment than others in
      their application. These include revenue recognition, valuation of receivables,
      valuation of goodwill, 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.





**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.


18


**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.


19


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.





In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how
      the effects of prior year uncorrected misstatements should be considered when
      quantifying misstatements in current year financial statements. SAB No. 108
      requires companies to quantify misstatements using a balance sheet and income
      statement approach and to evaluate whether either approach results in
      quantifying an error that is material in light of relevant quantitative and
      qualitative factors. SAB No. 108 permits existing public companies to initially
      apply its provisions either by (i) restating prior financial statements as
      if
      the “dual approach” had always been used or (ii) recording the cumulative effect
      of initially applying the “dual approach” as adjustments to the carrying value
      of assets and liabilities as of January 1, 2006 with an offsetting adjustment
      recorded to the opening balance of retained earnings. Use of the “cumulative
      effect” transition method requires detailed disclosure of the nature and amount
      of each individual error being corrected through the cumulative adjustment
      and
      how and when it arose. The adoption of this standard did not have a material
      impact on the Company’s financial condition, results of operations or
      liquidity.





In
      June
      2006, the FASB issued Interpretation (“FIN”) No. 48, “Accounting for Uncertainty
      in Income Taxes,” an interpretation of FASB Statement No. 109, “Accounting for
      Income Taxes,” which clarifies accounting for and disclosure of uncertainty in
      tax positions. FIN No. 48 prescribes a recognition threshold and measurement
      attribute for the financial recognition and measurement of a tax position taken
      or expected to be taken in a tax return. The interpretation is effective for
      fiscal years beginning after December 15, 2006. Tthe adoption of FIN No. 48
      did
      not have a material effect on our consolidated financial position, cash flows
      and results of operations.





**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 March 31, 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 March 31, 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
      6, "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.**





We
      have
      received a report from our independent accountants, relating to our December
      31,
      2007 audited financial statements containing an explanatory paragraph stating
      that our recurring losses from operations and our accumulated deficit raise
      substantial doubt about our ability to continue as a going concern. 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
      the
      operation of its businesses beyond a short period of time. These reasons raise
      significant doubt about the Company’s ability to continue as a going
      concern.


20


During
      the year ended December 31, 2007 and the first quarter of 2008, the Company
      was
      able to continue operating as a going concern due principally to funding of
      $1.25 million received from the sale of secured convertible demand promissory
      notes to an entity controlled by Michael Egan, its Chairman and Chief Executive
      Officer. Also, in December 2007, additional funding of $380 thousand was
      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. At March 31, 2008, the Company had a net working capital deficit of
      approximately $9.9 million, inclusive of a cash and cash equivalents balance
      of
      approximately $336 thousand. Such working capital deficit included an aggregate
      of $4.65 million in secured convertible demand debt and related accrued interest
      of approximately $1.1 million and accounts payable totaling approximately $644
      thousand due to entities controlled by Mr. Egan (See Note 7, “Related Party
      Transactions” in the accompanying Notes to Unaudited Condensed Consolidated
      Financial Statements for further details). Additionally, such working capital
      deficit included approximately $1.9 million of net liabilities of discontinued
      operations, with a significant portion of such liabilities related to charges
      which have been disputed by the Company.





Notwithstanding
      previous cost reduction actions taken by the Company and its decision to
      shutdown its unprofitable computer games and VoIP telephony services businesses
      in March 2007 (see Note 4, “Discontinued Operations” in the accompanying Notes
      to Unaudited Condensed Consolidated Financial Statements), the Company continues
      to incur substantial consolidated net losses, although reduced in comparison
      with prior periods, and management believes that the Company will continue
      to be
      unprofitable in the foreseeable future. Based upon the Company’s current
      financial condition, as discussed above, and without the infusion of additional
      capital, management does not believe that the Company will be able to fund
      its
      operations beyond the end of May 2008.





As
      more
      fully discussed in Note 3, “Proposed Tralliance Transaction” in the accompanying
      Notes to Unaudited Condensed Consolidated Financial Statements, on February
      1,
      2008, the Company announced that it had entered into a letter of intent to
      sell
      substantially all of the business and net assets of its Tralliance Corporation
      subsidiary and to issue approximately 269 million shares of its common stock
      to
      an entity controlled by Mr. Egan (the “Proposed Tralliance Transaction”). In the
      event that this Proposed Tralliance Transaction is consummated, all of the
      Company’s remaining secured and unsecured debt owed to entities controlled by
      Mr. Egan (which was approximately $5.7 million and $644 thousand at March 31,
      2008, respectively) will be exchanged or cancelled. Additionally, the
      consummation of the Proposed Tralliance Transaction would also result in
      significant reductions in the Company’s cost structure, based upon the
      elimination of Tralliance’s operating expenses. Although substantially all of
      Tralliance’s revenue would also be eliminated, approximately 10% of Tralliance’s
      future net revenue through May 5, 2015 would essentially be retained through
      the
      contemplated net revenue earn-out provisions of the Proposed Tralliance
      Transaction. Additionally, the consummation of the Proposed Tralliance
      Transaction would increase Mr. Egan’s ownership in the Company to approximately
      84% (assuming exercise of all outstanding stock options and warrants) and would
      significantly dilute all other existing shareholders. The foregoing description
      is preliminary in nature and there may be significant changes between such
      preliminary terms and the terms of any final definitive purchase
      agreement.




Management
      expects that the consummation of the Proposed Tralliance Transaction will
      significantly reduce the amount of net losses currently being sustained by
      the
      Company. However, management does not believe that the consummation of the
      Proposed Tralliance Transaction 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. Accordingly, assuming
      that the Proposed Tralliance Transaction is consummated, management believes
      that additional capital infusions (although reduced in comparison with the
      amounts of capital required during the Company’s recent past) will continue to
      be needed in order for the Company to continue to operate as a going
      concern.





In
      the
      event that the Proposed Tralliance Transaction is not consummated, management
      expects that significantly more capital will need to be invested in the Company
      in the near term than would be required in the event that the Proposed
      Tralliance Transaction is consummated. Also, inasmuch as substantially all
      of
      the assets of the Company and its subsidiaries secure the convertible demand
      debt owed to entities controlled by Mr. Egan, in connection with any resulting
      proceeding to collect this debt, such entities could seize and sell the assets
      of the Company and it subsidiaries, any or all of which would have a material
      adverse effect on the financial condition and future operations of the Company,
      including the potential bankruptcy or cessation of business of the
      Company.





It
      is our
      preference to avoid filing for protection under the U.S. Bankruptcy Code.
      However, in order to continue operating as a going concern for any length of
      time beyond May 2008, we believe that we must quickly raise capital. Although
      there is no commitment to do so, any such funds would most likely come from
      Michael Egan or affiliates of Mr. Egan or the Company as the Company currently
      has no access to credit facilities with traditional third parties and has
      historically relied upon borrowings from related parties to meet short-term
      liquidity needs. Any such capital raised would not be registered under the
      Securities Act of 1933 and would not be offered or sold in the United States
      absent registration requirements. Further, any securities issued (or issuable)
      in connection with any such capital raise will likely result in very substantial
      dilution of the number of outstanding shares of the Company’s Common
      Stock.


21


The
      amount of capital required to be raised by the Company will be dependent upon
      a
      number of factors, including (i) whether or not the Proposed Tralliance
      Transaction is consummated; (ii) our ability to increase Tralliance net revenue
      levels; (iii) our ability to control and reduce operating expenses; and (iv)
      our
      ability to successfully settle disputed and other outstanding liabilities
      related to our discontinued operations. There can be no assurance that the
      Proposed Tralliance Transaction will be consummated nor that the Company will
      be
      successful in raising a sufficient amount of capital, executing any of its
      current or future business plans or in continuing to operate as a going concern
      on a long-term basis.





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





Since
      our
      inception, we have incurred net losses each year and we expect that we will
      continue to incur net losses for the foreseeable future. We had net losses
      of
      approximately $549 thousand, $6.2 million and $17.0 million for the three months
      ended March 31, 2008 and the years ended December 31, 2007 and 2006,
      respectively. The principal causes of our losses are likely to continue to
      be:





·
            costs
                resulting from the operation of our
                business;





·
            failure
                to generate sufficient revenue; and




·
            selling,
                general and administrative
                expenses.





Although
      we have restructured our businesses, including the discontinuance of the
      operations of our computer games and VoIP telephony services businesses, we
      still expect to continue to incur losses as we attempt to improve the
      performance and operating results of our Internet services
      business.





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





Our
      balance sheet at March 31, 2008 includes certain 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. The
      legal and administrative costs of resolving these disputed charges may be
      expensive and divert management’s attention from day-to-day operations. 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. 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 adversely affect our ability
      to
      continue to operate as a going concern. See Note 4, “Discontinued Operations” in
      the Notes to Unaudited Condensed Consolidated Financial Statements for future
      details.





**RISKS
      RELATING TO OUR COMMON STOCK**





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





As
      of
      March 31, 2008, we had issued and outstanding approximately 172.5 million
      shares, of which approximately 88.7 million shares were freely tradable over
      the
      public markets. There is limited trading volume in our shares and we are now
      traded only in the over-the-counter market. Most of our outstanding restricted
      shares of Common Stock were issued more than one year ago and are therefore
      eligible to be resold over the public markets pursuant to Rule 144 promulgated
      under the Securities Act of 1933, as amended.





Sales
      of
      significant amounts of Common Stock in the public market in the future, the
      perception that sales will occur or the registration of additional shares
      pursuant to existing contractual obligations could materially and adversely
      drive down the price of our stock. In addition, such factors could adversely
      affect the ability of the market price of the Common Stock to increase even
      if
      our business prospects were to improve. Substantially all of our stockholders
      holding restricted securities, including shares issuable upon the exercise
      of
      warrants or the conversion of convertible notes to acquire our Common Stock
      (which are convertible into 193 million shares), have registration rights under
      various conditions and are or will become available for resale in the
      future.





In
      addition, as of March 31, 2008, there were outstanding options to purchase
      approximately 15.6 million shares of our Common Stock, which become eligible
      for
      sale in the public market from time to time depending on vesting and the
      expiration of lock-up agreements. The shares issuable upon exercise of these
      options are registered under the Securities Act and consequently, subject to
      certain volume restrictions as to shares issuable to executive officers, will
      be
      freely tradable.




Also
      as
      of March 31, 2008, we had issued and outstanding warrants to acquire
      approximately 16.9 million shares of our Common Stock. **** Many of
      the outstanding instruments representing the warrants contain anti-dilution
      provisions pursuant to which the exercise prices and number of shares issuable
      upon exercise may be adjusted.


22


**OUR
      CHAIRMAN MAY CONTROL US.**





Michael
      S. Egan, our Chairman and Chief Executive Officer, beneficially owns or
      controls, directly or indirectly, approximately 274.7 million shares of our
      Common Stock as of March 31, 2008, which in the aggregate represents
      approximately 72.1% of the outstanding shares of our Common Stock (treating
      as
      outstanding for this purpose the shares of Common Stock issuable upon exercise
      and/or conversion of the options, convertible promissory notes and warrants
      owned by Mr. Egan or his affiliates). If the proposed sale of substantially
      all
      of the business and net assets of Tralliance and the issuance of approximately
      269 million shares of the Company’s common stock to an entity controlled by Mr.
      Egan, is consummated, Mr. Egan’s beneficial ownership percentage would then be
      increased to approximately 84% of fully diluted shares outstanding (see Note
      3,
“Proposed Tralliance Transaction” in the Notes to Unaudited Condensed
      Consolidated Financial Statements for further details). **** Accordingly, Mr. Egan will be able to exercise significant influence over,
      if
      not control, any stockholder vote.





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





(a)
      Unregistered Sales of Equity Securities.





None.





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





Not
      applicable.




**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





None.





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





None.





**ITEM
      5. OTHER INFORMATION**





None.





**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. *





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.




*
      Incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K related
      to an event dated February 1, 2008.


23




**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*:*May
                9, 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)*




24


**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. *





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.





*
      Incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K related
      to an event dated February 1, 2008.


25