As filed with the Securities and Exchange Commission on December 23, 1998

                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                 FORM 10-Q

[X]  Quarterly  report  pursuant  to Section 13 or 15(d) of the  Securities
Exchange Act of 1934

For the quarterly period ended September 30, 1998

                                     or

[  ]  Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the transition period from _______________ to ___________________

Commission File No. 0-25053

                              theglobe.com, inc.
            -----------------------------------------------------
            (Exact Name of Registrant as Specified in Its Charter)

           State of Delaware                           14-1781422
     -------------------------------      -------------------------------
     (State or Other Jurisdiction of               (I.R.S. Employer
     Incorporation or Organization)               Identification No.)

          31 West 21st Street
           New York, New York                             10010
     -------------------------------      -------------------------------
(Address of Principal Executive Offices)               (Zip Code)

                                (212) 886-0800
              --------------------------------------------------
              Registrant's Telephone Number, Including Area Code

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

Yes     No  X

     The number of shares  outstanding  of the  Registrant's  Common Stock,
$.001  par  value  (the  "Common  Stock"),  as of  December  17,  1998  was
10,308,756.


<PAGE>


                             theglobe.com, inc.
                                 FORM 10-Q
                                   INDEX



                                                                PAGE NUMBER
                                                                -----------

PART I.   FINANCIAL INFORMATION



Item 1.  Financial Statements                                            1

         Balance Sheets at September 30, 1998 (unaudited)
         and December 31, 1997                                           1

         Unaudited Statements of Operations for the Three and Nine
         Month Period Ended September 30, 1998 and 1997                  2

         Unaudited Statements of Cash Flows for the Nine Month
         Period Ended September 30, 1998 and 1997                        3

         Notes to Unaudited Financial Statements                         4

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                          10

Item 3.  Qualitative and Quantitative Disclosure about Market
         Risk                                                           43


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings                                            II-1

Item 2.  Changes in Securities and Use of Proceeds                    II-1

Item 3.  Defaults Upon Senior Securities                              II-2

Item 4.  Submission of Matters to a Vote of Security Holders          II-2

Item 5.  Other Information                                            II-2

Item 6.  Exhibits and Reports on Form 8-K                              II-3

         A.  Exhibits
         B.  Reports on Form 8-K

Signatures


<PAGE>

                                   PART I

                           FINANCIAL INFORMATION
Item 1.  Financial Statements
                             theglobe.com, inc.

                               BALANCE SHEETS

                                             September 30,     December 31,
                                                1998              1997
                                             -------------     ------------
                                              (Unaudited)

                    Assets
Current assets:
  Cash and cash equivalents................. $       9,189    $  5,871,291
  Short-term investments....................     6,924,471      13,003,173
  Accounts receivable, net..................     1,268,790         254,209
  Prepaids and other current assets.........       296,036              --
                                             -------------    ------------

      Total current assets..................     8,498,486      19,128,673

Property and equipment, net.................     2,311,111         325,842
Other assets................................     1,057,746           7,657
                                             -------------    ------------

      Total assets.......................... $  11,867,343    $ 19,462,172
                                             -------------    ------------

     Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable.......................... $   1,234,919    $    396,380
  Accrued expense...........................       496,997         325,454
  Accrued compensation......................       376,729       1,148,999
  Deferred revenue..........................       486,119         113,290
  Current installments of obligations
   under capital leases.....................       670,522          27,174
                                             -------------    ------------

      Total current liabilities.............     3,265,286       2,011,297

Obligations under capital leases,
  excluding current installments............     1,326,418          98,826

Stockholders' equity:
  Preferred stock...........................         1,450           1,450
  Common stock..............................         1,218           1,154
  Additional paid-in capital................    23,365,798      21,866,965
  Net unrealized loss on securities.........       (29,491)        (41,201)
  Deferred compensation.....................      (149,645)        (76,033)
  Accumulated deficit.......................   (15,913,691)     (4,400,286)
                                             -------------    ------------

      Total stockholders' equity............     7,275,639      17,352,049

Commitments................................. -------------    ------------
      Total liabilities and stockholders'
        equity.............................. $  11,867,343    $ 19,462,172
                                             -------------    ------------
               See accompanying notes to financial statements.


<PAGE>


                              theglobe.com, inc.

                           STATEMENTS OF OPERATIONS
                                 (UNAUDITED)

<TABLE>
<CAPTION>
                                 Three Months Ended            Nine Months Ended
                                    September 30,                September 30,
                              -------------------------   -------------------------
                                 1998           1997           1998          1997
                              -----------   -----------   -----------   -----------
                                     (Unaudited)                  (Unaudited)

<S>                           <C>          <C>          <C>            <C>        
Revenues..................    $ 1,560,963  $   206,723  $  2,734,361   $   414,964
Cost of revenues..........        614,656      132,439     1,117,837       238,471
                              -----------  -----------  ------------   -----------
     Gross profit.........        946,307       74,284     1,616,524       176,493

  Operating expenses:
  Sales and marketing.....      2,109,747      403,608     6,602,786       627,779
  Product development.....      1,149,424       37,500     1,400,293       100,000
  General and                   
   administrative.........      2,032,878    1,511,332     4,429,594     2,105,690
  Non-recurring charge....      1,370,250           --     1,370,250            --
                              -----------  -----------  ------------   -----------
     Loss from
      operations..........     (5,715,992)  (1,878,156)  (12,186,399)   (2,656,976)
                              -----------  -----------  ------------   -----------
Interest and other income,   
  net.....................         35,062      112,945       707,699       124,329
                              -----------  -----------  ------------   -----------

     Loss before
      provision for
      income taxes........     (5,680,930)  (1,765,211)  (11,478,700)   (2,532,647)

Provision for income taxes          8,205       18,050        34,705        18,050

     Net loss.............    $(5,689,135) $(1,783,261) $(11,513,405)  $(2,550,697)
                              -----------  -----------  ------------   -----------
Basic and diluted net
  loss per share..........    $     (4.74) $     (1.54) $      (9.80)    $   (2.23)

Weighted average basic
  and diluted shares
  outstanding.............      1,200,417    1,154,271     1,174,398     1,144,510
                              -----------  -----------  ------------   -----------
</TABLE>

               See accompanying notes to financial statements.



<PAGE>


                              theglobe.com, inc.

                           STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)

                                                     Nine Months Ended
                                                       September 30,
                                              --------------------------------
                                                     1998              1997
                                              ----------------  --------------
                                                  (Unaudited)      (Unaudited)

Cash flows from operating activities:

  Net loss....................................  $ (11,513,405)    $ (2,550,697)
   Adjustments to reconcile net loss to 
     net cash used in operating activities:
     Depreciation and amortization............        416,459           54,428
     Deferred compensation earned.............         44,513           21,087
     Nonrecurring charges.....................      1,370,250               --
   Changes in operating assets and liabilities:
     Accounts receivable, net.................     (1,014,581)          29,550
     Prepaids and other current assets........       (296,036)          (6,759)
     Other assets.............................       (883,087)          10,945
     Accounts payable.........................        838,539          330,046
     Accrued expense..........................        171,543          425,835
     Accrued compensation.....................       (772,270)       1,037,250
     Deferred revenue.........................        372,829           76,484
                                                -------------     ------------

      Net cash used in operating activities...    (11,265,246)        (571,831)

Cash flows used in investing activities:
  Purchase of property and equipment..........       (360,552)        (239,733)
  Proceeds from sale of short-term investments      6,090,412               --
  Purchase of short-term investments..........             --      (15,187,410)
                                                -------------     ------------

   Net cash provided by (used in) investing    
     activities...............................      5,729,860      (15,427,143)

Cash flows from financing activities:
  Payments under capital lease obligations....       (170,236)              --
  Proceeds from exercise of common stock 
   options....................................         10,522            4,507
  Proceeds from issuance of convertible C 
   stock......................................             --          280,000
  Proceeds from issuance of convertible
   preferred Series D stock...................             --       20,000,000
  Payment of offering/financing costs.........       (167,002)        (118,880)
                                                -------------     ------------

   Net cash (used in) provided by financing     
     activities...............................       (326,716)      20,165,627
                                                 -------------     ------------

Net change in cash............................     (5,862,102)       4,166,653

Cash and cash equivalents, beginning
   of period..................................      5,871,291          757,118

Cash and cash equivalents, end of period......  $       9,189     $  4,923,771
                                                 -------------     ------------

Supplemental disclosure of noncash transactions:
     Equipment acquired under capital leases..  $   2,044,308     $         --


       The accompanying notes are an integral part of these financial
                                statements.


<PAGE>


                             theglobe.com, inc.

                       NOTES TO FINANCIAL STATEMENTS

            (ALL INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998
                           AND 1997 IS UNAUDITED)

(1)  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)  Description of Business

theglobe.com,  inc.  (the  "Company")  was  incorporated  on  May  1,  1995
(inception)  and  commenced  operations  on that date.  theglobe.com  is an
online  community  with members and users in the United  States and abroad.
Users are able to personalize  their online  experience by publishing their
own content and  interacting  with others  having  similar  interests.  The
Company's  primary  revenue  source  is  the  sale  of  advertising,   with
additional revenues generated through e-commerce  arrangements and the sale
of enhanced services.

The Company's business is characterized by rapid technological  change, new
product  development  and  evolving  industry  standards.  Inherent  in the
Company's  business  are various  risks and  uncertainties,  including  its
limited operating history,  unproven business model and the limited history
of commerce on the Internet.  The Company's success may depend in part upon
the  emergence  of the  Internet as a  communications  medium,  prospective
product  development  efforts and the acceptance of the Company's solutions
by the marketplace.

(b)  Unaudited Interim Financial Information

     The  unaudited  interim  financial  statements  of the Company for the
three and nine months ended  September 30, 1998 and 1997,  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 financial statements
prepared in accordance with generally accepted  accounting  principles have
been condensed or omitted  pursuant to such rules and regulations  relating
to interim financial statements.

In the opinion of management,  the accompanying unaudited interim financial
statements  reflect all  adjustments,  consisting only of normal  recurring
adjustments,  necessary  to present  fairly the  financial  position of the
Company at September 30, 1998,  and the results of its  operations  and its
cash flows for the three and nine months ended September 30, 1998 and 1997.

(c)  Use of Estimates

The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires management to make estimates and
assumptions  that affect the reported amounts of assets and liabilities and
the  disclosure of  contingent  assets and  liabilities  at the date of the
financial  statements  and the  reported  amounts of revenue  and  expenses
during  the  reporting  period.  Actual  results  could  differ  from those
estimates.

(d)  Other Assets

At September 30, 1998, other assets included  $890,744 of security deposits
and  $167,002 of deferred  offering  costs.  The  deferred  offering  costs
represent  costs incurred in connection  with the Company's  initial public
offering.  These costs were charged against additional paid in capital when
the initial public offering occurred in November 1998.

(e)  Revenue Recognition

The  Company's   revenues  are  derived   principally   from  the  sale  of
advertisements  under  short-term  contracts.  To date, the duration of the
Company's advertising  commitments has generally averaged from one to three
months.  Advertising revenues are recognized ratably in the period in which
the  advertisement  is  displayed,  provided  that no  significant  Company
obligations remain and collection of the resulting  receivable is probable.
Company obligations  typically include the guarantee of a minimum number of
"impressions" or times that an advertisement appears in pages viewed by the
users of the Company's online properties.

The Company also derived other revenues from its  membership  service fees,
e-commerce  revenue shares and sponsorship  placements within the Company's
site.  Membership service fees are deferred and recognized ratably over the
term of the subscription  period.  Revenues from the Company's share of the
proceeds  from  its  e-commerce   partners'   sales  are  recognized   upon
notification from its partners of sales attributable to the Company's site.
Other  revenues  accounted  for 11% and 28% of revenues for the nine months
ended September 30, 1998 and 1997, respectively.

The Company  trades  advertisements  on its Web  properties in exchange for
advertisements  on the Internet sites of other  companies.  Barter revenues
and expenses are recorded at the fair market value of services  provided or
received, whichever is more determinable in the circumstances. Revenue from
barter  transactions  is  recognized  as  income  when  advertisements  are
delivered on the Company's  Web  properties.  Barter  expense is recognized
when the Company's  advertisements  are run on other  companies' Web sites,
which  is  typically  in  the  same  period  when  the  barter  revenue  is
recognized. Barter revenues were less than 3% and 24% of total revenues for
the nine months ended September 30, 1998 and 1997, respectively.

(f)  Net Loss Per Common Share

The Company  adopted  SFAS No. 128,  "Computation  of Earnings  Per Share,"
during the year ended  December 31, 1997. In  accordance  with SFAS No. 128
and the SEC Staff Accounting  Bulletin No. 98, basic earnings per share are
computed using the weighted  average  number of common and dilutive  common
equivalent shares outstanding  during the period.  Common equivalent shares
consist of the  incremental  common shares  issuable upon the conversion of
the Convertible  Preferred Stock (using the if-converted method) and 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.  Pursuant  to SEC  Staff
Accounting  Bulletin No. 98, common stock and  convertible  preferred stock
issued for nominal  consideration,  prior to the anticipated effective date
of an initial  public  offering (an "IPO"),  are required to be included in
the  calculation  of basic and diluted net loss per share,  as if they were
outstanding for all periods presented. To date, the Company has not had any
issuances or grants for nominal consideration.

Diluted  loss  per  share  has  not  been  presented  separately,   as  the
outstanding stock options,  warrants and contingent stock purchase warrants
are anti-dilutive for each of the periods presented.

Anti-dilutive  potential  common  shares  outstanding  were  8,751,522  and
7,390,797 for the nine months ended September 30, 1998 and 1997.

(g)  Recent Accounting Pronouncements

In June 1997, the Financial  Accounting Standards Board (the "FASB") issued
SFAS No. 130, "Reporting  Comprehensive Income." This statement establishes
standards  for the reporting  and display of  comprehensive  income and its
components  in  a  full  set  of  general  purpose  financial   statements.
Comprehensive  income  generally  represents  all changes in  shareholders'
equity during the period except those  resulting  from  investments  by, or
distributions to, shareholders.  SFAS No. 130 is effective for fiscal years
beginning  after  December  15, 1997 and  requires  restatement  of earlier
periods   presented.   For  the  nine  months  ended  September  30,  1998,
comprehensive  net loss was  approximately  $11,700 lower than the net loss
reported  in the  Company's  statement  of  operations  for the  applicable
period,  due to  unrealized  gains or losses on  securities  classified  as
available-for-sale.  For the nine months  ended  September  30,  1997,  the
comprehensive  loss  was  equal  to the  loss  reported  in  the  Company's
statement of operations for the applicable period.

In June 1997, the FASB issued SFAS No. 131,  "Disclosures About Segments of
an Enterprise and Related  Information." SFAS No. 131 establishes standards
for the way that a public  enterprise  reports  information about operating
segments  in  annual   financial   statements,   and  requires  that  those
enterprises report selected information about operating segments in interim
financial  reports  issued to  shareholders.  SFAS No. 131 is effective for
fiscal years  beginning  after December 15, 1997 and requires  statement of
earlier periods presented. The Company has determined that it does not have
any separately reporting business segments.

In June 1998,  the FASB  issued  SFAS No. 133,  Accounting  for  Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting and
reporting  standards  for  derivative  instruments,   including  derivative
instruments embedded in other contracts,  and for hedging activities.  SFAS
No. 133 is  effective  for all fiscal  quarters of fiscal  years  beginning
after June 15, 1999.  This  statement  does not apply to the Company as the
Company  currently  does not have any  derivative  instruments  or  hedging
activities.

(h)  Stock Split

     In August 1997, the Company  authorized and  implemented a ten-for-one
preferred  stock  split.  In  September  1998,  the  Company  authorized  a
one-for-two  reverse  stock split of all common and  preferred  stock.  All
share and per share  information in the accompanying  financial  statements
has been  retroactively  restated  to reflect the effect of the stock split
and the reverse stock split.

(2)  CONCENTRATION OF CREDIT RISK

Financial instruments which subject the Company to concentrations of credit
risk consist primarily of cash and cash equivalents, short-term investments
and  trade  accounts  receivable.  The  Company  maintains  cash  and  cash
equivalents  with  various  domestic  financial  institutions.  The Company
performs  periodic  evaluations  of the relative  credit  standing of these
institutions.  From time to time,  the Company's cash balances with any one
financial  institution  may exceed Federal  Deposit  Insurance  Corporation
insurance limits.

The Company's  customers are concentrated in the United States. The Company
performs  ongoing  credit  evaluations  and  establishes  an allowance  for
doubtful  accounts  based  upon  factors  surrounding  the  credit  risk of
customers,  historical trends and other  information;  to date, such losses
have been within management's expectations.

For the nine months ended September 30, 1998,  there were no customers that
accounted for over 10% of revenues  (excluding  barter revenues of $80,749)
generated by the Company, or of accounts receivable at September 30, 1998.

For the nine months ended  September 30, 1997,  there was one customer that
accounted for 19% of revenues  (excluding  barter  advertising  revenues of
$97,500) generated by the Company.

(3)  PROPERTY AND EQUIPMENT

Property and equipment consist of the following:




                                           September 30,    December 31,
                                               1998             1997
                                           -------------    ------------
                                            (Unaudited)

Computer equipment, including assets
  under capital leases of
  $2,170,308 and $126,000, respectively..   $  2,790,474    $    421,164
Furniture and fixtures...................         46,648          14,230
                                            ------------    ------------
                                               2,837,122         435,394

Less accumulated depreciation and 
  amortization, including amounts 
  related to assets under capital
  leases of $236,841 and $-0-,
  respectively...........................        526,011         109,552
                                            ------------    ------------

          Total..........................   $  2,311,111    $    325,842
                                            ------------    ------------

(4)  1998 STOCK OPTION PLAN

The  Company's  1998 Stock Option Plan (the "1998 Plan") was adopted by the
Board of Directors on July 15, 1998,  and approved by the  stockholders  of
the Company as of July 15,  1998.  The 1998 Plan  provides for the grant of
"incentive stock options" intended to qualify under Section 422 of the Code
and stock options which do not so qualify.  The granting of incentive stock
options is subject to limitation  as set forth in the 1998 Plan.  Directors,
officers,  employees and consultants of the Company are eligible to receive
grants  under the 1998  Plan.  The 1998 Plan  authorizes  the  issuance  of
1,200,000 shares of Common Stock,  subject to adjustment as provided in the
1998 Plan.  During the period from June 30, 1998 through September 30, 1998
the Company granted 822,650 options.

(5)  NON-RECURRING CHARGE

The Company  recorded a non-cash,  non-recurring  charge of  $1,370,250  to
earnings in the third  quarter of 1998 in  connection  with the transfer of
warrants  to  acquire  225,000  shares  of  Common  Stock by  Dancing  Bear
Investments,  Inc.  (the  Company's  principal  shareholder  at the date of
transfer)  to certain  officers of the  Company,  at an  exercise  price of
approximately   $2.91  per  share.  The  Company  has  accounted  for  such
transaction  as if it were a  compensatory  plan  adopted  by the  Company.
Accordingly,  such  amount  was  recorded  as  a  non-cash,   non-recurring
compensation  expense in the Company's statement of operations for services
provided by such  officers to the Company  with an  offsetting  increase in
additional paid-in capital. The amount of such non-cash charge was based on
the difference  between the Company's initial public offering price ($9 per
share) and the exercise price per warrant of approximately $2.91 per share.

(6)  EMPLOYMENT AGREEMENTS

     During July and August 1998,  the Company  entered into two employment
agreements  expiring  in  2001  with  two  officers  of  the  Company.  The
employment   agreements  provide  for  minimum  salary  levels,   incentive
compensation and severance benefits, among other items. The Company granted
112,500 stock options to each of the two executives. The exercise price for
87,500 of the options  granted to one officer was 85% of the initial public
offering  price and the remaining  options  granted to that officer and the
112,500  options  granted to the other  officer were granted at the initial
public  offering price which is equal to the fair market value per share of
the Company's  Common Stock on the date of grant.  The 87,500  options will
vest over a three-year  period. As a result,  the Company recorded deferred
compensation  expense of  $118,100  in the third  quarter  relating  to the
87,500  shares  granted  at 85%  of  the  initial  public  offering  price,
representing  the difference  between the initial public offering price and
the  exercise  price of such  options at the date of grant.  Such amount is
presented as a reduction of  stockholders'  equity and  amortized  over the
three year  vesting  period of the  applicable  options.  The  compensation
expense relating to these options was $9,842 in the third quarter of 1998.

(7)  SUBSEQUENT EVENT

On November 13, 1998, the Company  completed an initial public offering and
concurrent  offering  directly  to  certain  investors  in  which  it  sold
3,481,667  shares of Common Stock,  including  381,667 shares in connection
with the exercise of the underwriters'  over-allotment option, at $9.00 per
share.  Upon the closing of the offerings,  all of the Company's  preferred
stock,  par value $0.001 per share (the "Preferred  Stock"),  automatically
converted  into in an aggregate of 5,473,735  shares of Common  Stock.  Net
proceeds from the offerings, after underwriting and placement agent fees of
$2,018,500 and estimated offering costs of $2.0 million were $27.3 million.
After the  offerings,  the Company had  10,308,756  shares of Common  Stock
outstanding.

<PAGE>

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations

     Certain  statements   contained  herein  constitute   "forward-looking
statements"  within the  meaning of Section  27A of the  Securities  Act of
1933, as amended (the  "Securities  Act") and Section 21E of the Securities
Exchange   Act  of  1934,   as  amended   (the   "Exchange   Act").   These
forward-looking  statements  can be  identified  by the use of  predictive,
future-tense   or   forward-looking   terminology,   such  as   "believes,"
"anticipates,"  "expects,"  "estimates," "plans," "may," "intends," "will,"
or similar  terms.  These  statements  appear in a number of places in this
report and  include  statements  regarding  the  intent,  belief or current
expectations of the Company, its directors or its officers with respect to,
among other things: (i) trends affecting the Company's  financial condition
or  results  of  operations,   (ii)  the  Company's   business  and  growth
strategies, (iii) the Internet and Internet commerce and (iv) the Company's
financing  plans.  Investors  are cautioned  that any such  forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may differ materially from
those  projected in the  forward-looking  statements as a result of various
factors set forth under "Risk  Factors" and  elsewhere in this report.  The
following  discussion of the financial  condition and results of operations
of the  Company  should  also be read in  conjunction  with  the  financial
statements and notes related thereto included elsewhere in this report.

Overview

     theglobe.com  is one of the world's  leading online  communities  with
over 2 million  members in the United  States and abroad.  In October 1998,
over  7.5  million  unique  users  visited  the  site.  theglobe.com  is  a
destination  on the  Internet  where  users are able to  personalize  their
online  experience by  publishing  their own content and  interacting  with
others having similar interests.  theglobe.com facilitates this interaction
by  providing   various  free  services,   including  home  page  building,
discussion  forums,  chat,  e-mail  and a  marketplace  where  members  can
purchase a variety of products  and  services.  Additionally,  theglobe.com
provides  its  users  with  news,   weather,   movie  and  music   reviews,
multi-player  gaming,  horoscopes and  personals.  By satisfying its users'
personal and  practical  needs,  theglobe.com  seeks to become their online
home. The Company's primary revenue source is the sale of advertising, with
additional revenues generated through e-commerce arrangements, and the sale
of membership subscriptions for enhanced services.

     The  Company  was  incorporated  in May  1995.  For  the  period  from
inception  through  December  1995,  the Company had minimal  sales and its
operating  activities related primarily to the development of the necessary
computer   infrastructure   and  initial   planning  and   development   of
theglobe.com.  Operating  expenses in 1995 were minimal.  During 1996,  the
Company  continued the foregoing  activities and also focused on recruiting
personnel,  raising  capital and developing  programs to attract and retain
members.  In 1997,  the Company  moved its  headquarters  to New York City,
expanded  its  membership  base from less than 250,000 to almost 1 million,
improved and upgraded its services, expanded its production staff, built an
internal sales  department and began active  promotion of  theglobe.com  to
increase market awareness. From the end of 1997 through September 30, 1998,
revenues and operating  expenses have increased as the Company has placed a
greater  emphasis on building its  advertising  revenues and memberships by
expanding its sales force and promoting theglobe.com brand.

     To date, the Company's revenues have been derived principally from the
sale of advertisements and sponsorship placements within the Company's site
and,  to a  lesser  extent,  from  subscription  and  e-commerce  revenues.
Advertising  revenues constituted 89% of total revenues for the nine months
ended  September  30,  1998 and 72% of total  revenues  for the nine months
ended  September  30,  1997.  The  Company  sells a variety of  advertising
packages to clients,  including banner  advertisements,  event sponsorship,
and targeted and direct response  advertisements.  Currently, the Company's
advertising  revenues are derived  principally from short-term  advertising
arrangements,   averaging  one  to  three  months,  in  which  the  Company
guarantees a minimum  number of  impressions  for a fixed fee.  Advertising
revenues are recognized ratably in the period in which the advertisement is
displayed,  provided that no  significant  Company  obligations  remain and
collection of the resulting receivable is probable.  Payments received from
advertisers  prior  to  displaying  their  advertisements  on the  site are
recorded as deferred  revenues and are  recognized as revenue  ratably when
the advertisement is displayed. To the extent minimum guaranteed impression
levels are not met, the Company  defers  recognition  of the  corresponding
revenues until guaranteed levels are achieved.

     In  addition  to  advertising  revenues,  the  Company  derives  other
revenues  primarily from its membership  service fees,  e-commerce  revenue
shares and  sponsorship  placements  within the Company's site. A number of
recent  arrangements  with its  premier  e-commerce  partners  provide  the
Company  with a share of any sales  resulting  from  direct  links from the
Company's Web site.  Revenues from the Company's share of the proceeds from
its e-commerce  partners' sales are recognized upon  notification  from its
partners of sales  attributable  to the Company's  site. To date,  revenues
from e-commerce arrangements have not been material.

     The Company incurred net losses of $65,706,  $750,180 and $3.6 million
for the period from May 1, 1995 (date of  inception)  to December 31, 1995,
and the years ended  December  31, 1996 and 1997,  respectively,  and $11.5
million for the nine months  ended  September  30, 1998.  At September  30,
1998, the Company had an accumulated deficit of $15.9 million.  The Company
has recorded  deferred  compensation of approximately  $118,100 and $83,100
for the nine  months  ended  September  30,  1998  and for the  year  ended
December 31, 1997,  respectively,  in connection  with the grant of certain
stock options to employees,  representing the difference between the deemed
value  of the  Company's  Common  Stock  for  accounting  purposes  and the
exercise  price  of such  options  at the date of  grant.  Such  amount  is
presented as a reduction of  stockholders'  equity and  amortized  over the
vesting period of the applicable  options,  generally  three to five years.
Amortization of deferred stock compensation is allocated to the general and
administrative expense line identified on the statement of operations.

     In addition, the Company incurred a non-recurring,  non-cash charge of
$1,370,250 to earnings in the third quarter of 1998 in connection  with the
transfer of warrants to acquire 225,000 shares of common stock from Dancing
Bear Investments,  Inc. (the Company's principal shareholder at the date of
transfer) to certain officers of the Company, at an exercise price of $2.91
per share.  The amount of such non-cash  charge was based on the difference
between the Company's  initial public  offering price ($9.00 per share) and
the  exercise  price per  warrant of  approximately  $2.91 per share.  This
expense has been classified  separately in the statement of operations as a
non-recurring charge.

     Also,  during  July  1998,  pursuant  to the  terms  of an  employment
agreement with an officer of the Company, the Company granted stock options
to  purchase  112,500  shares of  Common  Stock,  87,500  of which  have an
exercise price per share equal to 85% of the initial public offering price.
As  a  result,  the  Company  recorded  deferred  compensation  expense  of
approximately  $118,100,  representing  the  difference  between the deemed
value of the Company's Common Stock, the initial public offering price, and
the exercise price of 87,500  options at the date of grant.  Such amount is
presented as a reduction of  stockholders'  equity and  amortized  over the
vesting  period of the  applicable  options.  The 87,500 options shall vest
with  respect to  one-third  of the shares  subject  thereto on each of the
first three  anniversaries of the date of grant. The remaining options were
granted at the  initial  public  offering  price which is equal to the fair
market value per share of the Company' Common Stock on the date of grant.

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

     Revenues

     Revenues  increased  to  $1.6  million  for  the  three  months  ended
September 30, 1998 from  $206,724 for the three months ended  September 30,
1997, an increase of 655%. The period to period growth in revenues resulted
from (i) an  increase in the number of  advertisers  as well as the average
commitment  per  advertiser,  (ii) an  increase in the  Company's  Web site
traffic,  (iii) an  increase  in the  number  of sales  people  and (iv) an
increase in marketing and advertising  expenditures.  Advertising  revenues
were $1.4  million or 90% of total  revenues  and  $155,059 or 75% of total
revenues  for  the  three  months  ended   September  30,  1998  and  1997,
respectively.  In 1998, the Company significantly increased its sales force
and began a  marketing  campaign  to  promote  theglobe.com  Web site.  The
Company anticipates that advertising  revenues will continue to account for
a substantial  share of total revenues for the  foreseeable  future.  Other
revenues  were derived from  membership  service fees,  e-commerce  revenue
shares and sponsorship  placements  within the Company's site. At September
30,  1998,  the Company had  deferred  revenues of  $486,119,  comprised of
amounts  received  from  advertisers  and members  prior to services  being
performed.  Subscription  fees are recognized  over the membership term and
advertising fees are recognized when the impressions are delivered.

     Cost of Revenues

     Cost of revenues consists  primarily of Internet  connection  charges,
Web  site  equipment  leasing  costs,  depreciation,   maintenance,  barter
advertising  expenses,  staff  costs and  related  expenses  of  operations
personnel.  Gross  margins  were  61% and 36% for the  three  months  ended
September 30, 1998 and 1997, respectively. The increase in gross margin was
primarily  due to an increase in revenues  relative to the increase in cost
of revenues. In addition,  the Company recorded barter advertising expenses
during  the three  months  ended  September  30,  1998 and  1997,  which is
equivalent to the barter advertising  revenues recorded in the same period.
The  September  30,  1998 and 1997 gross  margins  exclusive  of the barter
transactions were 62% and 51%, respectively.

     Sales and Marketing Expenses

     Sales and marketing expenses consist primarily of salaries and related
expenses of sales and marketing personnel, commissions, advertising, public
relations  expenses  and  other  marketing  related  expenses.   Sales  and
marketing  expenses  increased to $2.1 million or 135% of total revenue for
the three months ended  September  30, 1998 from  $403,608 or 195% of total
revenues  for the three  months ended  September  30,  1997.  The period to
period  increase in sales and  marketing  expenses in absolute  dollars was
primarily  attributable  to  expansion  of the  Company's  online and print
advertising and other promotional expenditures,  as well as increased sales
and  marketing  personnel  and related  expenses  required to implement the
Company's branding and marketing strategy.

     Product Development Expenses

     Product  development  expenses include  professional fees, staff costs
and related expenses associated with the development,  testing and upgrades
to the  Company's  Web site as well as  expenses  related to its  editorial
content and community management and support.  Product development expenses
increased to $1,149,424 or 74% of total revenues for the three months ended
September  30,  1998 from  $37,500 or 18% of total  revenues  for the three
months  ended  September  30,  1997.  The  increase in product  development
expenses was primarily  attributable to increased  staffing levels required
to support the  Company's Web site and to enhance its content and features.
Product  development  expenses also  increased as a result of the launch of
the  Company's  site  redesign in  November  1998.  The Company  intends to
continue recruiting and hiring experienced  product  development  personnel
and to make  additional  investments  in product  development.  The Company
expenses product development costs as incurred.

     General and Administrative Expenses

     General and administrative  expenses consist primarily of salaries and
related costs for general corporate  functions,  including  finance,  human
resources,  facilities and legal,  along with  professional  fees and other
corporate  expenses.  General and  administrative  expenses increased to $2
million or 130% of total revenues for the three months ended  September 30,
1998 from $1.5 million or 731% of total revenues for the three months ended
September 30, 1997,  an increase of  approximately  $500,000.  The absolute
dollar increase in general and administrative expenses was primarily due to
increased  salaries  and  related  expenses  associated  with  management's
employment  contracts,  hiring of  additional  personnel,  and increases in
professional  fees and travel.  The  increased  salaries  also  reflect the
highly competitive nature of hiring in the new media industry.  The Company
expects that it will incur additional general and  administrative  expenses
as the Company  hires  additional  personnel  and incurs  additional  costs
related  to the  growth  of the  business  and its  operation  as a  public
company,  including directors' and officers' liability insurance,  investor
relations programs and professional service fees. Accordingly,  the Company
anticipates  that  general and  administrative  expenses  will  continue to
increase in absolute dollars.

     Non-recurring charges

     The Company recorded a non-recurring,  non-cash charge of $1.4 million
in the third quarter 1998.  This charge is in connection  with the transfer
of  outstanding  warrants  to  acquire  225,000  shares of Common  Stock by
Dancing Bear Investments (the Company's  principal  shareholder) to certain
officers of the Company. There was no similar charge in 1997.

     Interest and Other Income, Net

     Interest and other income,  net includes  interest  income earned from
the Company's cash and short-term investments,  interest expense related to
the Company's capital lease obligations and gains and losses on the sale of
short-term  investments.  Interest income remained consistent for the three
months ended September 30, 1998 and 1997. Interest expense increased during
the third  quarter  1998 due to new capital  lease  obligations,  which the
Company entered into in 1998. During the third quarter 1997 the Company did
not have any capital lease obligations.

     Income Taxes

     Income taxes of $8,205 for the three months ended  September  30, 1998
are  based  solely  on state and local  taxes on  business  and  investment
capital.  These taxes  decreased from $18,050 in the third quarter 1997 due
to a decrease in the average equity  balance of the Company.  The Company's
effective  tax rate differs  from the  statutory  federal  income tax rate,
primarily as a result of the uncertainty regarding the Company's ability to
utilize  its  net  operating  loss  carryforwards.  Due to the  uncertainty
surrounding  the timing or realization of the benefits of its net operating
loss  carryforwards  in  future  tax  returns,  the  Company  has  placed a
valuation allowance against its otherwise recognizable deferred tax assets.
As of December  31,  1997,  the Company had  approximately  $4.4 million of
federal  net  operating  loss  carryforwards  for  tax  reporting  purposes
available  to offset  future  taxable  income.  The  Company's  federal net
operating loss  carryforwards  expire  beginning 2000 through 2012. The Tax
Reform Act of 1986 imposes  substantial  restrictions on the utilization of
net operating losses and tax credits in the event of an "ownership  change"
of a corporation. Due to the change in the Company's ownership interests in
the third quarter of 1997, as defined in the Internal Revenue Code of 1986,
as amended (the "Code"),  future utilization of the Company's net operating
loss  carryforwards  will be  subject  to  certain  limitations  or  annual
restrictions.

RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

     Revenues

     Revenues  increased to approximately  $2.7 million for the nine months
ended  September 30, 1998 from $415,000 for the nine months ended September
30,  1997,  an  increase of 559%.  The period to period  growth in revenues
resulted from (i) an increase in the number of  advertisers  as well as the
average  commitment per  advertiser,  (ii) an increase in the Company's Web
site  traffic,  (iii) an increase in the number of sales people and (iv) an
increase in marketing and advertising  expenses.  Advertising revenues were
approximately  89% of total revenues and 72% of total revenues for the nine
months ended September 30, 1998 and 1997, respectively. Commencing in April
1996, the Company engaged an Internet  advertising service provider to sell
the Company's Web site advertising inventory in exchange for a service fee.
The Company recognized revenues net of such service fees. Commencing May 1,
1997, the Company  canceled this  arrangement  and created its own internal
sales  department in order to properly  represent  theglobe.com  brand on a
consistent  basis as well as to reduce overall sales costs. The Company did
not record any expense for third party advertising service providers in the
nine months ended  September  30, 1998. In addition,  the Company  recorded
barter advertising  revenues  representing 3% and 24% of total revenues for
the nine  months  ended  September  30,  1998 and 1997,  respectively.  The
Company anticipates that advertising  revenues will continue to account for
a substantial  share of total revenues for the foreseeable  future and that
barter  revenue will continue to comprise an  insignificant  portion of the
Company's  total  revenues in the future.  Other revenues were derived from
membership   service  fees,   e-commerce  revenue  shares  and  sponsorship
placements  within the Company's  site. At September 30, 1998,  the Company
had deferred  revenues of  $486,119,  comprised  of amounts  received  from
advertisers  and members prior to services  being  performed.  Subscription
fees are  recognized  over the  membership  term and  advertising  fees are
recognized when impressions are delivered.

     Cost of Revenues

     Cost of revenues consists  primarily of Internet  connection  charges,
Web  site  equipment  leasing  costs,  depreciation,   maintenance,  barter
advertising  expenses,  staff  costs and  related  expenses  of  operations
personnel.  Gross  margins  were  59% and 43% for  the  nine  months  ended
September 30, 1998 and 1997, respectively. The increase in gross margin was
primarily  due to an increase in revenues  relative to the increase in cost
of revenues. In addition,  the Company recorded barter advertising expenses
during the nine months ended September 30, 1998 and 1997,  included in cost
of  revenues,  which  is  equivalent  to the  barter  advertising  revenues
recorded in the same period.  The September 30, 1998 and 1997 gross margins
exclusive of the barter transactions were 61% and 56%, respectively.

     Sales and Marketing Expenses

     Sales and marketing expenses consist primarily of salaries and related
expenses of sales and marketing personnel, commissions, advertising, public
relations  and  other  marketing  related  expenses.  Sales  and  marketing
expenses  increased to $6.6 million or 241% of total  revenues for the nine
months ended September 30, 1998 from $628,000 or 151% of total revenues for
the nine months ended  September 30, 1997. The period to period increase in
sales and marketing expenses was primarily attributable to the expansion of
the  Company's  online and print  advertising,  public  relations and other
promotional  expenditures,   as  well  as  increased  sales  and  marketing
personnel  and  related  expenses   required  to  implement  the  Company's
marketing strategy. Sales and marketing expenses also increased as a result
of the Company's  decision to shift its  advertising  to an internal  sales
department in the second quarter of 1997. Sales and marketing expenses as a
percentage of total  revenues  have  increased as a result of the continued
development and  implementation  of  theglobe.com's  branding and marketing
campaign.

     Product Development Expenses

     Product  development  expenses include  professional fees, staff costs
and related expenses associated with the development,  testing and upgrades
to the  Company's  Web site as well as  expenses  related to its  editorial
content and community management and support.  Product development expenses
increased to $1,400,293 or 51% of total  revenues for the nine months ended
September  30,  1998 from  $100,000 or 24% of total  revenues  for the nine
months  ended  September  30,  1997.  The  increase in product  development
expenses was partially  attributable to increased  staffing levels required
to support the  Company's Web site and to enhance its content and features.
Product  development  expenses also increased as of result of the launch of
the  Company's  site  redesign in  November  1998.  The Company  intends to
continue recruiting and hiring experienced  product  development  personnel
and to make  additional  investments  in product  development.  The Company
expenses product development costs as incurred.

     General and Administrative Expenses

     General and administrative  expenses consist primarily of salaries and
related costs for general corporate  functions,  including  finance,  human
resources,  facilities and legal,  along with  professional  fees and other
corporate expenses.  General and administrative  expenses increased to $4.4
million or 162% of total  revenues for the nine months ended  September 30,
1998 from $2.1 million or 507% of total  revenues for the nine months ended
September  30,  1997,  an increase of $2.3  million.  The  absolute  dollar
increase  in general  and  administrative  expenses  was  primarily  due to
increased  salaries  and  related  expenses  associated  with  management's
employment  contracts,  hiring of  additional  personnel,  and increases in
professional   fees.  The  increased   salaries  also  reflect  the  highly
competitive nature of hiring in the new media industry. The Company expects
that it will incur additional  general and  administrative  expenses as the
Company hires additional  personnel and incurs  additional costs related to
the growth of the business and its operation as a public company, including
directors' and officers' liability  insurance,  investor relations programs
and professional  service fees.  Accordingly,  the Company anticipates that
general and  administrative  expenses will continue to increase in absolute
dollars.

     Non-recurring charges

     The Company recorded a non-recurring,  non-cash charge of $1.4 million
in the third quarter 1998.  This charge is in connection  with the transfer
of  outstanding  warrants  to  acquire  225,000  shares of Common  Stock by
Dancing Bear  Investments,  Inc. (the Company's  principal  shareholder) to
certain officers of the Company. There was no similar charge in 1997.

     Interest and Other Income, Net

     Interest and other income,  net includes  interest  income earned from
the Company's cash and short-term investments,  interest expense related to
the Company's capital lease obligations and gains and losses on the sale of
short-term investments.  Interest income increased to $816,454 for the nine
months ended on September  30, 1998 from $124,329 for the nine months ended
September  30,  1997,  an increase of  $692,125.  The  increase in interest
income was primarily  due to a higher  average cash,  cash  equivalent  and
investment  balance as a result of capital  received  from the  issuance of
shares of the Company's Preferred Stock in the third quarter of 1997.

     Income Taxes

     Income taxes of $34,705 for the nine months ended  September  30, 1998
are  based  solely  on state and local  taxes on  business  and  investment
capital.  The  Company's  effective  tax rate  differs  from the  statutory
federal income tax rate, primarily as a result of the uncertainty regarding
the Company's ability to utilize its net operating loss carryforwards.  Due
to the uncertainty surrounding the timing or realization of the benefits of
its net operating loss carryforwards in future tax returns, the Company has
placed a valuation  allowance against its otherwise  recognizable  deferred
tax assets.  As of December 31, 1997,  the Company had  approximately  $4.4
million of federal  net  operating  loss  carryforwards  for tax  reporting
purposes  available to offset future taxable income.  The Company's federal
net operating loss  carryforwards  expire  beginning 2000 through 2012. The
Tax Reform Act of 1986 imposes substantial  restrictions on the utilization
of net  operating  losses  and tax  credits  in the event of an  "ownership
change"  of a  corporation.  Due to the change in the  Company's  ownership
interests  in the third  quarter of 1997,  as  defined in the Code,  future
utilization  of the  Company's  net operating  loss  carryforwards  will be
subject to certain limitations or annual restrictions.

LIQUIDITY AND CAPITAL RESOURCES

     As of September 30, 1998, the Company had  approximately  $6.9 million
in cash,  cash  equivalents  and short-term  investments.  Net cash used in
operating  activities  was $11.3  million and  $571,831 for the nine months
ended September 30, 1998 and 1997,  respectively.  The increase in net cash
used  resulted  primarily  from an increase in the  Company's net operating
losses in addition to the timing of payments  associated with the Company's
1997 accrued  compensation  in the first quarter of 1998 and a higher level
of receivables due to increased  revenues and increases in prepaid expenses
and other  assets.  These  items  were  partially  offset by  increases  in
accounts payable, accrued expenses and deferred revenues

     Net cash provided (used) in investing  activities was $5.7 million and
$(15.4)  million  for the nine  months  ended  September  30, 1998 and 1997
respectively. Net cash provided by investing activities for the nine months
ended  September  30,  1998 was  primarily  related to sales of  short-term
investments in order to finance the operating expenses of the Company.  For
the nine months ended  September  30, 1997,  the net cash used in investing
activities was primarily related to the purchase of short-term  investments
with the proceeds  from the  Company's  issuance of shares of the Company's
Preferred Stock in the third quarter 1997. In each period,  additional cash
was  used to  purchase  property  and  equipment  in  connection  with  the
Company's build out of its infrastructure.

     Net  cash  used in  financing  activities  for the nine  months  ended
September  30, 1998  consisted  primarily of payments  under the  Company's
capital  lease   obligations  and  payments   relating  to  offering  costs
associated with the Company's initial public offering. Net cash provided by
financing  activities  for the nine  months  ended  September  30, 1997 was
primarily  from  issuance of the Company's  Series C and D Preferred  Stock
through private  placements  partially offset by financing costs associated
with these private placements.

     On November 13, 1998,  the Company  raised  approximately  $27 million
from its initial public offering after deducting underwriting and placement
agents fees and other estimated offering costs.

     The  Company's  capital   requirements  depend  on  numerous  factors,
including  market  acceptance  of the  Company's  services,  the  amount of
resources the Company devotes to investments in its Web site, the resources
the Company  devotes to  marketing  and selling its  services and its brand
promotions  and other  factors.  The Company has  experienced a substantial
increase in its capital expenditures and operating lease arrangements since
its inception  consistent  with the growth in the Company's  operations and
staffing,  and  anticipates  that this will  continue  for the  foreseeable
future.  Additionally,  the Company  will  continue  to  evaluate  possible
investments in businesses,  products and technologies,  and plans to expand
its  sales  and  marketing  programs  and  conduct  more  aggressive  brand
promotions.  The Company  believes  that the net proceeds  from the initial
public offering in November 1998,  together with its other current cash and
cash equivalents, will be sufficient to meet its anticipated cash needs for
working capital and capital  expenditures for at least 12 months. See "Risk
Factors--Additional Financing Requirements; Ability to Incur Debt; Expected
Negative Operating Cash Flow for the Foreseeable Future."

IMPACT OF THE YEAR 2000

     The Year  2000  issue  is the  potential  for  system  and  processing
failures of date-related data and the result of computer-controlled systems
using two  digits  rather  than four to define  the  applicable  year.  For
example,  computer programs that have time-sensitive software may recognize
a date using "00" as the year 1900  rather  than the Year 2000.  This could
result  in  system  failure  or  miscalculations   causing  disruptions  of
operations, including, among other things, a temporary inability to process
transactions,   send  invoices  or  engage  in  similar   normal   business
activities.

     State of  Readiness.  The  Company may be affected by Year 2000 issues
related  to  non-compliant  IT systems or non-IT  systems  operated  by the
Company or by third  parties.  The Company has  substantially  completed an
assessment of its internal and external (third-party) IT systems and non-IT
systems.  At this point in its  assessment,  the  Company is not  currently
aware of any Year 2000 problems relating to systems operated by the Company
or by third  parties  that would have a  material  effect on the  Company's
business, results of operations or financial condition, without taking into
account the Company's efforts to avoid such problems, although there can be
no assurance thereof.

     The Company's IT systems consist of software developed either in-house
or purchased from third parties,  and hardware  purchased from vendors.  At
this  point,  the  Company's   assessment  of  its  in-house  software  has
identified  only  approximately  2,000 lines of code out of several hundred
thousand  in its  proprietary,  in-house  software  which are not Year 2000
compliant.  Those  portions of code which are not compliant are used solely
for internal  statistical  analysis.  The Company does not  anticipate  any
difficulty in modifying this code to become Year 2000 compliant by June 30,
1999.  The Company has  contacted  its  principal  vendors of hardware  and
software. All of those contacted vendors have notified the Company that the
hardware and software  that they have  supplied to the Company is Year 2000
compliant,  with the exception of Microsoft  Windows NT 4.0. The Company is
currently  upgrading this software to MS Windows NT 4.0 SP4, which corrects
all known Y2K issues in this software.

     The Company has also  substantially  completed  an  assessment  of its
non-IT systems which the Company has identified as containing embedded chip
systems for Year 2000 issues. At this point in its assessment,  the Company
is not currently aware of any Year 2000 problems  relating to these systems
which would have a material  effect on the Company's  business,  results of
operations,  or  financial  condition,  without  taking  into  account  the
Company's efforts to avoid such problems.

     The  Company's  IT systems  and other  business  resources  rely on IT
systems and non-IT systems provided by service  providers and therefore may
be vulnerable to those service  providers'  failure to remediate  their own
Year 2000 issues.  Such service  providers  include those for the Company's
network and e-mail  services and landlords for the Company's  leased office
spaces. The Company has contacted these principal service providers and has
been  notified  that the IT and non-IT  systems  which they  provide to the
Company are Year 2000 compliant.

     Cost. Based on its assessment to date, the Company does not anticipate
that costs  associated  with  remediating  the Company's  non-compliant  IT
systems or non-IT systems will be material.

     Risks.  To the  extent  that the  Company's  assessment  is  finalized
without  identifying  any additional  material  non-compliant  IT or non-IT
systems  operated by the Company or by third parties,  the most  reasonably
likely  worst case Year 2000  scenario is the failure of one or more of the
Company's  vendors of  hardware or  software  or one or more  providers  of
non-IT systems to the Company to properly identify any Year 2000 compliance
issues and  remediate  any such issues  prior to  December  31,  1999.  The
Company  believes  that the primary  business  risks,  in the event of such
failure,  would include but not be limited to, lost  advertising  revenues,
increased  operating  costs,  loss of  customers or persons  accessing  the
Company's Web site, or other business  interruptions  of a material nature,
as well  as  claims  of  mismanagement,  misrepresentation,  or  breach  of
contract.

     Contingency  Plan.  As discussed  above,  the Company is engaged in an
ongoing Year 2000  assessment.  Following the completion of the assessment,
the Company  plans to conduct a full-scale  Year 2000  simulation of its IT
systems.  The results of this simulation and the Company's  assessment will
be  taken  into  account  in  determining  the  nature  and  extent  of any
contingency plans.


<PAGE>


                                 RISK FACTORS

Limited Operating History

     The Company was  founded in May 1995.  Accordingly,  the Company has a
limited  operating  history upon which an  evaluation  of the Company,  its
current  business  and its  prospects  can be based,  each of which must be
considered  in  light  of  the  risks,  expenses  and  problems  frequently
encountered  by all  companies  in the  early  stages of  development,  and
particularly by such companies  entering new and rapidly developing markets
like the Internet.  Such risks  include,  without  limitation,  the lack of
broad  acceptance of the community  model on the Internet,  the possibility
that the Internet will fail to achieve broad  acceptance as an  advertising
and  commercial  medium,  the inability of the Company to attract or retain
members,   the   inability   of  the   Company  to   generate   significant
e-commerce-based   revenues  or  subscription  service  revenues  from  its
members,  a new and  relatively  unproven  business  model,  the  Company's
ability to anticipate and adapt to a developing  market, the failure of the
Company's  network  infrastructure  (including  its  server,  hardware  and
software) to efficiently handle its Internet traffic,  changes in laws that
adversely  affect the  Company's  business,  the  ability of the Company to
manage effectively its rapidly expanding  operations,  including the amount
and  timing  of  capital  expenditures  and  other  costs  relating  to the
expansion of the Company's operations,  the introduction and development of
different or more extensive  communities by direct and indirect competitors
of the Company,  including  those with  greater  financial,  technical  and
marketing resources,  the inability of the Company to maintain and increase
levels of traffic on its Web site, the inability of the Company to attract,
retain and motivate qualified personnel and general economic conditions. To
address  these risks,  the Company must,  among other  things,  attract and
retain members, maintain its customer base and attract a significant number
of new advertising customers, respond to competitive developments,  develop
and extend its brand,  continue  to form and  maintain  relationships  with
strategic  partners,  continue to attract,  retain and  motivate  qualified
personnel,  and  continue  to develop  and  upgrade  its  technologies  and
commercialize its services incorporating such technologies. There can be no
assurance that the Company will be successful in addressing such risks, and
any failure to do so could have a material  adverse effect on the Company's
business, results of operations and financial condition.

Fluctuating Rates of Revenue Growth

     There  can be no  assurance  the  Company's  revenue  growth in recent
periods will continue or increase.  The Company's limited operating history
makes the  prediction  of  future  results  difficult  or  impossible  and,
therefore,  the Company's  recent  revenue growth should not be taken as an
indication  of any growth that can be expected in the future.  Furthermore,
its  limited   operating   history   leads  the  Company  to  believe  that
period-to-period  comparisons  of its operating  results are not meaningful
and that  the  results  for any  period  should  not be  relied  upon as an
indication of future  performance.  To the extent that revenues do not grow
at anticipated  rates,  the Company's  business,  results of operations and
financial condition would be materially and adversely affected.

Anticipated Losses for the Foreseeable Future

     The Company has not achieved  profitability  to date,  and the Company
anticipates  that it will continue to incur net losses for the  foreseeable
future.  The extent of these losses will depend,  in part, on the amount of
growth in the Company's  revenues from  advertising  sales,  e-commerce and
membership  subscription fees. As of September 30, 1998, the Company had an
accumulated  deficit  of  $15.9  million.  The  Company  expects  that  its
operating  expenses  will  increase  significantly  during the next several
years,  especially  in the areas of product  development  and  general  and
administrative  expenses. Thus, the Company will need to generate increased
revenues  to achieve  profitability.  To the extent that  increases  in its
operating expenses precede or are not subsequently followed by commensurate
increases  in revenues,  or that the Company is unable to adjust  operating
expense levels accordingly,  the Company's business,  results of operations
and financial condition would be materially and adversely  affected.  There
can  be no  assurance  that  the  Company  will  ever  achieve  or  sustain
profitability  or that the Company's  operating losses will not increase in
the future.

Dependence on Continued Growth in Use and Commercial Viability of the Internet

     The Company's future success is substantially dependent upon continued
growth in the use of the Internet. To support advertising sales, e-commerce
and membership  service fees on  theglobe.com,  the  Internet's  recent and
rapid growth must  continue,  and  e-commerce  on the Internet  must become
widespread.  None of these can be assured. The Internet may prove not to be
a  viable  commercial  marketplace.  Additionally,  due to the  ability  of
consumers  to easily  compare  prices of similar  products  or  services on
competing Web sites,  gross margins for e-commerce  transactions may narrow
in the future and,  accordingly,  the Company's  revenues  from  e-commerce
arrangements may be materially  negatively impacted. If use of the Internet
does not continue to grow,  the Company's  business,  results of operations
and financial condition would be materially and adversely affected.

     Additionally,  to the extent that the Internet continues to experience
significant  growth in the number of users and the level of use,  there can
be no assurance that its technical  infrastructure will continue to be able
to  support  the  demands   placed   upon  it.  The   necessary   technical
infrastructure for significant increases in e-commerce,  such as a reliable
network backbone, may not be timely and adequately developed.  In addition,
performance improvements,  such as high-speed modems, may not be introduced
in a timely fashion. Furthermore, security and authentication concerns with
respect to transmission over the Internet of confidential information, such
as credit  card  numbers,  may  remain.  Issues  like  these  could lead to
resistance  against the  acceptance of the Internet as a viable  commercial
marketplace.  Also,  the Internet could lose its viability due to delays in
the  development  or adoption of new standards  and  protocols  required to
handle  increased  levels of  activity,  or due to  increased  governmental
regulation.  Changes in or insufficient  availability of telecommunications
services could result in slower  response times and adversely  affect usage
of the Internet. To the extent the Internet's technical infrastructure does
not effectively  support the growth that may occur, the Company's business,
results of operations  and  financial  condition  would be  materially  and
adversely affected.

Dependence on Members for Content and Promotion

     The Company depends  substantially upon member involvement for content
and for word-of-mouth promotion. Particularly, the Company depends upon the
voluntary  efforts of certain highly motivated  members who are most active
in developing  content to attract  other  Internet  users to the site.  The
Company expects such member  involvement to reduce the need for the Company
to expend resources on content development and site promotion. There can be
no assurance that members will continue to generate  significant content or
to promote  the site or that the  member-generated  content or  promotional
efforts will continue to attract other Internet users. There also can be no
assurance that the Company's business would not be materially and adversely
affected if its most highly active  members  became  dissatisfied  with the
Company's services or its focus on the commercialization of those services.

Unproven Business Model; Developing Market; Unproven Acceptance of the
Company's Products

     The Company's business model is new and relatively unproven. The model
depends upon the Company's  ability to generate multiple revenue streams by
leveraging  its community  platform.  To be  successful,  the Company must,
among other things,  develop and market  products and services that achieve
broad market acceptance by its users,  advertisers and e-commerce  vendors.
There  can  be  no  assurance  that  any  Internet   community,   including
theglobe.com,  will  achieve  broad  market  acceptance.   Accordingly,  no
assurance can be given that the Company's business model will be successful
or that it can sustain revenue growth or be profitable.

     The market for the  Company's  products and  services is new,  rapidly
developing and characterized by an increasing number of market entrants. As
is  typical  of any new and  rapidly  evolving  market,  demand  and market
acceptance for recently  introduced  products and services are subject to a
high level of uncertainty  and risk.  Moreover,  because this market is new
and rapidly evolving, it is difficult to predict its future growth rate, if
any, and its ultimate  size. If the market fails to develop,  develops more
slowly  than  expected or becomes  saturated  with  competitors,  or if the
Company's   products  and  services  do  not  achieve  or  sustain   market
acceptance,  the Company's  business,  results of operations  and financial
condition would be materially and adversely affected.

Brand Identity Is Critical to the Company; Risks Associated with Brand
Development

     The Company believes that  establishing and maintaining brand identity
is a critical  aspect of efforts  to  attract  and expand its member  base,
Internet traffic and advertising and commerce  relationships.  Furthermore,
the Company believes that the importance of brand recognition will increase
as low barriers to entry encourage the  proliferation of Internet sites. In
order to attract and retain members,  advertisers and commerce vendors, and
in response to competitive  pressures,  the Company intends to increase its
financial commitment to the creation and maintenance of brand loyalty among
these  groups.   The  Company  plans  to  accomplish  this,   although  not
exclusively,  through  advertising  campaigns  in  several  forms of media,
including television,  print,  billboards,  buses, telephone kiosks, online
media, and other marketing and promotional efforts. If the Company does not
generate a  corresponding  increase in revenue as a result of its  branding
efforts or  otherwise  fails to promote its brand  successfully,  or if the
Company incurs excessive expenses in an attempt to promote and maintain its
brand,  the  Company's  business,   results  of  operations  and  financial
condition would be materially and adversely affected.

     Promotion and enhancement of theglobe.com  brand will also depend,  in
part,  on the  Company's  success in  providing a  high-quality  "community
experience."  Such success  cannot be assured.  If members,  other Internet
users,  advertisers  and  commerce  vendors  do not  perceive  theglobe.com
community  experience to be of high quality,  or if the Company  introduces
new services or enters into new business  ventures  that are not  favorably
received  by such  parties,  the  value  of the  Company's  brand  could be
diluted.   Such  brand  dilution  could  decrease  the   attractiveness  of
theglobe.com to such parties, and could materially and adversely affect the
Company's business, results of operations and financial condition.

Substantial Reliance on Advertising Revenues; Short-term Nature of
Advertising Contracts; Company Guarantee of Minimum Impression Levels

     The Company  derives a  substantial  portion of its revenues  from the
sale of  advertisements  on its site,  and expects to continue to do so for
the foreseeable  future.  For the year ended December 31, 1997 and the nine
months ended September 30, 1998,  advertising  revenues represented 77% and
89%,  respectively,  of the Company's net revenues.  The Company's business
model  therefore  is  highly  dependent  on  the  amount  of  "traffic"  on
theglobe.com,  which  has a  direct  effect  on the  Company's  advertising
revenues.   The  Company  is  in  the  early  stages  of  implementing  its
advertising  sales programs which, if not successful,  could materially and
adversely  affect  the  Company's  business,   results  of  operations  and
financial condition.

     To date, substantially all of the Company's advertising contracts have
been for terms averaging one to three months in length, with relatively few
longer-term  advertising  contracts.  Many  of  the  Company's  advertising
customers  have limited  experience  with  Internet  advertising,  have not
devoted a significant portion of their advertising expenditures to Internet
advertising  and may  not  believe  Internet  advertising  to be  effective
relative to traditional  advertising media. Also, the Company's advertising
customers  may object to the placement of their  advertisements  on certain
members'  personal  homepages,  the content of which they deem undesirable.
There can be no  assurance  that the  Company's  current  advertisers  will
continue to purchase advertisements on theglobe.com.

     The  Company's  contracts  with  advertisers  typically  guarantee the
advertiser   a  minimum   number  of   "impressions,"   or  times  that  an
advertisement is seen by users of theglobe.com.  To the extent that minimum
impression  levels are not  achieved  for any  reason,  the  Company may be
required  to "make  good"  or  provide  additional  impressions  after  the
contract term,  which may adversely  affect the availability of advertising
inventory and which could have a material  adverse  effect on the Company's
business,  results of  operations  and financial  condition.  To the extent
minimum guaranteed  impressions are not met, the Company defers recognition
of the  corresponding  revenues  until  guaranteed  impression  levels  are
achieved.

     Additionally,  the  process of  managing  advertising  within a large,
high-traffic  Web site such as the Company's is an  increasingly  important
and  complex   task.   The  Company   licenses   from   DoubleClick,   Inc.
("DoubleClick") its advertising  management system ("D.A.R.T.").  Under the
license agreement, DoubleClick provides the Company an Internet advertising
administration system to facilitate the Company's management of advertising
on its Web site. The D.A.R.T.  service is intended to permit the Company to
generate ad tags, schedule advertising to run in the online environments in
which  the  Company  places  the ad  tags  and  generate  reports  on  such
advertising.  The  DoubleClick  agreement  is for a term of three years and
will expire on April 15, 2000, subject to DoubleClick's  right to terminate
the agreement  upon 30 days' notice  following the Company's  breach of the
terms of the  agreement or if  DoubleClick,  in its  reasonable  good faith
discretion,  determines that the Company has used,  could use or intends to
use the D.A.R.T.  technology  in a manner that could damage or cause injury
to the D.A.R.T.  technology or reflects  unfavorably  on the  reputation of
DoubleClick.  No assurance can be given that  DoubleClick will not elect to
terminate the agreement. Any such termination and replacement could disrupt
the Company's ability to manage its advertising  operations for a period of
time.  In  addition,  to the  extent  that the  Company  encounters  system
failures or material  difficulties  in the  operation of this  system,  the
Company could be unable to deliver banner  advertisements  and sponsorships
through  its  site.  Any  extended  failure  of, or  material  difficulties
encountered in connection with, the Company's advertising management system
may expose the Company to "make  good"  obligations  with its  advertisers,
which,  by  displacing   saleable   advertising   inventory,   among  other
consequences,  would  reduce  revenues  and could have a  material  adverse
effect on the  Company's  business,  results of  operations  and  financial
condition.

     The Company's  ability to generate  significant  advertising  revenues
will depend,  in part,  on its ability to create new  advertising  programs
without  diluting  the  perceived  value  of  its  existing  programs.  The
Company's  ability to generate  advertising  revenues  will depend also, in
part,  on  advertisers'  acceptance  of the Internet as an  attractive  and
sustainable  medium,  the  development  of a  large  base of  users  of the
Company's  products and  services,  the effective  development  of Web site
content  that  provides  user  demographic  characteristics  that  will  be
attractive  to  advertisers,  and  government  regulation.  The adoption of
Internet-based  advertising,  particularly by those  advertisers  that have
historically  relied  upon  traditional  advertising  media,  requires  the
acceptance of a new way of conducting business and exchanging  information.
There can be no  assurance  that the market for Internet  advertising  will
continue  to emerge or become  sustainable.  If the  market  develops  more
slowly than  expected,  the Company's  business,  results of operations and
financial condition could be materially and adversely affected.

     The Internet as an  advertising  medium has not been  available  for a
sufficient  period  of time to gauge its  effectiveness  as  compared  with
traditional  advertising  media. No standards have been widely accepted for
the measurement of the  effectiveness of  Internet-based  advertising,  and
there  can be no  assurance  that any such  standards  will  become  widely
accepted  in the  future.  Additionally,  no  standards  have  been  widely
accepted  to measure  the  number of  members,  unique  users or page views
related to a particular site. Internet  advertising rates are based in part
on third-party  estimates of users of an Internet site.  Such estimates are
often based on sampling  techniques or other  imprecise  measures,  and may
materially  differ from Company  estimates.  There can be no assurance that
advertisers  will accept the Company's or other  parties'  measurements  of
impressions. The rejection by advertisers of such measurements could have a
material  adverse effect on the Company's  business,  results of operations
and financial condition.

     The sale of  Internet  advertising  is subject to intense  competition
that has  resulted  in a wide  variety of pricing  models,  rate quotes and
advertising  services.  This has made it difficult to project future levels
of  advertising  revenues and rates.  It is also difficult to predict which
pricing models, if any, will achieve broad acceptance among advertisers. As
described  above, to date, the Company has based its  advertising  rates on
providing  advertisers  with a guaranteed  number of  impressions,  and any
failure  of  the  Company's  advertising  model  to  achieve  broad  market
acceptance, would have a material adverse effect on the Company's business,
results of operations and financial condition.

     "Filter"  software  programs that limit or remove  advertising from an
Internet user's desktop are available to consumers.  Widespread adoption or
increased use of such software by users or the adoption of such software by
certain Internet access providers could have a material adverse effect upon
the viability of advertising on the Internet and on the Company's business,
results of operations and financial condition.

Potential Fluctuations in Operating Results; Quarterly Fluctuations

     The Company's  operating  results may fluctuate  significantly  in the
future as a result of a variety of  factors,  many of which are outside the
Company's  control.  See "--Limited  Operating  History" and "--Fluctuating
Rates of  Revenue  Growth."  As a  strategic  response  to  changes  in the
competitive  environment,  the Company  may from time to time make  certain
pricing,  service or marketing  decisions or acquisitions that could have a
material  short-term or long-term adverse effect on the Company's business,
results of operations  and financial  condition.  See "--Brand  Identity Is
Critical to the Company; Risks Associated with Brand Development."

     The  Company  believes  that  it  may  experience  seasonality  in its
business,  with use of the Internet and  theglobe.com  being somewhat lower
during  the summer  vacation  and  year-end  holiday  periods.  Advertising
impressions (and therefore revenues) may be expected to decline accordingly
in those periods.  Additionally,  seasonality may affect  significantly the
Company's   advertising  revenues  during  the  first  and  third  calendar
quarters,  as  advertisers  historically  spend less during these  periods.
Because Internet advertising is an emerging market, additional seasonal and
other patterns in Internet  advertising  may develop as the market matures,
and there can be no assurance  that such  patterns will not have a material
adverse  effect  on the  Company's  business,  results  of  operations  and
financial condition.

     The Company  derives a  significant  portion of its revenues  from the
sale of  advertising  under  short-term  contracts,  averaging one to three
months in  length.  As a  result,  the  Company's  quarterly  revenues  and
operating  results are, to a significant  extent,  dependent on advertising
revenues  from  contracts  entered  into  within  the  quarter,  and on the
Company's  ability to adjust  spending in a timely manner to compensate for
any  unexpected   revenue  shortfall.   See   "--Substantial   Reliance  on
Advertising Revenues;  Short-term Nature of Advertising Contracts;  Company
Guarantee of Minimum Impression Levels."

     In addition  to selling  advertising,  a key element of the  Company's
strategy is to generate revenues through e-commerce arrangements.  To date,
the revenues received by the Company under the revenue-sharing  portions of
these  arrangements  have not been material,  and there can be no assurance
that the  Company  will  receive a material  amount of revenue  under these
agreements  in the  future.  Many  of  the  Company's  existing  e-commerce
arrangements are terminable upon short notice.  As a result,  the Company's
revenues from e-commerce may fluctuate  significantly from period to period
depending on the continuation of its key e-commerce arrangements.

     The foregoing factors, in some future quarters, may lead the Company's
operating results to fall below the expectations of securities analysts and
investors.  In such  event,  the  trading  price of the Common  Stock would
likely be materially and adversely affected.

Broad Discretion in Use of Proceeds from Initial Public Offering

     The Company intends to use the net proceeds from the Common Stock sold
in  its  initial   public   offering,   completed  in  November  1998,  for
advertising,  brand name promotions and other general  corporate  purposes,
including  investment in the development and  functionality of theglobe.com
Web site,  enhancements of the Company's network infrastructure and working
capital.  The Company may also use a portion of the proceeds for  potential
strategic  alliances and  acquisitions.  The Company has not yet determined
the amount of the net proceeds that will be used  specifically  for each of
the  foregoing  purposes.  Accordingly,  management  will have  significant
flexibility  in applying  such net  proceeds.  The failure of management to
apply such funds  effectively  could have a material  adverse effect on the
Company's business, results of operations and financial condition.

Dependence on Key Personnel

     The  Company's   performance   is   substantially   dependent  on  the
performance  of its  senior  management  and key  technical  personnel.  In
particular,  the Company's  success depends on the continued efforts of its
senior  management  team,  especially its Co-Chief  Executive  Officers and
Co-Presidents (and co-founders), Todd V. Krizelman and Stephan J. Paternot.
The  Company  does  not  carry  key  person  life  insurance  on any of its
personnel.  The loss of the  services of any of its  executive  officers or
other key employees  could have a material  adverse effect on the business,
results of operations and financial condition of the Company.

     The Company's future success also depends on its continuing ability to
retain and attract highly qualified technical and managerial personnel.  As
of  September  30,  1998,  the  Company  had  grown  to 94  employees  from
approximately  27 in September 1997, and the Company  anticipates  that the
number of its employees will increase  significantly in the next 12 months.
Wages  for  managerial  and  technical  employees  are  increasing  and are
expected  to continue  to  increase  in the  foreseeable  future due to the
competitive  nature of this job market.  There can be no assurance that the
Company will be able to retain its key managerial  and technical  personnel
or that it will be able to attract and retain  additional  highly qualified
technical  and  managerial   personnel  in  the  future.  The  Company  has
experienced  difficulty  from  time  to time in  attracting  the  personnel
necessary  to  support  the  growth  of its  business,  and there can be no
assurance  that the Company will not experience  similar  difficulty in the
future.  The inability to attract and retain the  technical and  managerial
personnel  necessary to support the growth of the Company's  business,  due
to,  among other  things,  a large  increase in the wages  demanded by such
personnel,  could  have  a  material  adverse  effect  upon  the  Company's
business, results of operations and financial condition.

Management of Growth; Inexperienced Management

     The Company's recent growth has placed, and is expected to continue to
place, a significant  strain on its  managerial,  operational and financial
resources.  To manage its  potential  growth,  the Company must continue to
implement  and improve its  operational  and  financial  systems,  and must
expand,  train and manage its employee base. The Company's  Chief Operating
Officer and Chief  Financial  Officer  joined the Company during August and
July 1998,  respectively.  In addition,  each of the Company's  Director of
Advertising  Sales,  Director  of  Communications  and  Director  of  Human
Resources  has been with the Company for less than two years.  Furthermore,
the members of the  Company's  current  senior  management  (other than the
Chairman) have not had any previous experience managing a public company or
a large operating company.  There can be no assurance that the Company will
be able to  effectively  manage the expansion of its  operations,  that the
Company's  systems,  procedures or controls will be adequate to support the
Company's operations or that Company management will be able to achieve the
rapid execution  necessary to fully exploit the market  opportunity for the
Company's products and services. Any inability to manage growth effectively
could have a material adverse effect on the Company's business,  results of
operations and financial condition.

Competition for Management Time; Potential Conflicts of Interest

     Michael S. Egan is the Chairman of the Company and, as such,  Mr. Egan
serves as Chairman of the Board of Directors and as an executive officer of
the Company with primary  responsibility for day-to-day  strategic planning
and financing  arrangements.  Mr. Egan is also the controlling  investor of
Dancing Bear Investments,  Inc., which holds a controlling  interest in the
Company,  and Chairman and Chief Executive Officer of Certified  Vacations,
an entity  affiliated  with Dancing  Bear  Investments,  Inc.  Dancing Bear
Investments,  Inc. may also acquire other entities in the future. Edward A.
Cespedes is the Vice President of Corporate Development of the Company with
primary  responsibility for corporate development  opportunities  including
mergers  and  acquisitions.  Mr.  Cespedes  is also a Managing  Director of
Dancing Bear Investments.  Messrs.  Egan and Cespedes have not committed to
devote any specific  percentage  of their  business  time with the Company.
Accordingly,  the Company will compete with Dancing Bear Investments,  Inc.
and related entities for the time of Messrs. Egan and Cespedes. The Company
has recently begun e-commerce arrangements with certain entities controlled
by  Dancing  Bear  Investments,   Inc.  or  by  Republic  Industries,  Inc.
("Republic  Industries"),  an entity  affiliated with H. Wayne Huizenga,  a
director of the Company,  which are not currently  material to the Company.
These arrangements are not the result of arm's-length negotiations.  Due to
their relationships with their related entities, Messrs. Egan, Cespedes and
Huizenga will have an inherent  conflict of interest in making any decision
related to transactions between their related entities and the Company. The
Company  intends to review  related party  transactions  in the future on a
case-by-case basis.

Need to Enhance and Develop theglobe.com to Remain Competitive

     To remain  competitive,  the  Company  must  continue  to enhance  and
improve the responsiveness,  functionality and features of theglobe.com and
develop other products and services. Enhancements of or improvements to the
Web site may contain undetected programming errors that require significant
design  modifications,  resulting in a loss of customer confidence and user
support  and  a  decrease  in  the  value  of  the  Company's   brand  name
recognition.

     The Company plans to develop and introduce new features and functions,
such as increased  capabilities for user personalization and interactivity.
This will require the  development  or licensing  of  increasingly  complex
technologies. There can be no assurance that the Company will be successful
in  developing  or  introducing  such  features and  functions or that such
features  and  functions  will  achieve  market  acceptance  or enhance the
Company's brand name recognition. Any failure of the Company to effectively
develop and  introduce new features and  functions,  or the failure of such
new  features  and  functions to achieve  market  acceptance,  could have a
material  adverse effect on the Company's  business,  results of operations
and financial condition.

     The  Company  also plans to develop and  introduce  new  products  and
services,  such as new  content  targeted  for  specific  user  groups with
particular  demographic  and  geographic  characteristics.  There can be no
assurance  that the Company will be successful in developing or introducing
such  products and services or that such products and services will achieve
market  acceptance or enhance the  Company's  brand name  recognition.  Any
failure of the Company to effectively  develop and introduce these products
and  services,  or the  failure of such  products  and  services to achieve
market  acceptance,  could have a material  adverse effect on the Company's
business, results of operations and financial condition.

Internet Industry Is Characterized by Rapid Technological Change

     The market for  Internet  products and  services is  characterized  by
rapid technological developments,  evolving industry standards and customer
demands,  and frequent new product  introductions and  enhancements.  These
market characteristics are exacerbated by the emerging nature of the market
and the fact that many  companies  are expected to  introduce  new Internet
products and services in the near future. The Company's future success will
depend in  significant  part on its  ability  to  continually  improve  the
performance,  features  and  reliability  of the site in  response  to both
evolving  demands of the marketplace  and  competitive  product and service
offerings,  and  there  can  be no  assurance  that  the  Company  will  be
successful in doing so. In addition,  the widespread adoption of developing
multimedia  enabling  technologies  could  require  fundamental  and costly
changes in the  Company's  technology  and could  fundamentally  affect the
nature,  viability and measurability of Internet-based  advertising,  which
could adversely  affect the Company's  business,  results of operations and
financial condition.

Risk of Capacity Constraints and Systems Failures

     A key element of the  Company's  strategy is to generate a high volume
of user  traffic.  The  Company's  ability  to attract  advertisers  and to
achieve market acceptance of its products and services, and its reputation,
depend  significantly  upon the  performance of the Company and its network
infrastructure  (including its server,  hardware and software).  Any system
failure that causes  interruption  or slower response time of the Company's
products and services  could  result in less traffic to the  Company's  Web
site and, if sustained or repeated,  could reduce the attractiveness of the
Company's  products and services to advertisers and licensees.  An increase
in the volume of user traffic  could  strain the capacity of the  Company's
technical  infrastructure,  which  could  lead to slower  response  time or
system  failures,  and could adversely affect the delivery of the number of
impressions that are owed to advertisers and thus the Company's advertising
revenues.  In  addition,  as the  number  of Web  pages  on  and  users  of
theglobe.com  increase,  there can be no assurance that the Company and its
technical infrastructure will be able to grow accordingly,  and the Company
faces  risks  related to its ability to scale up to its  expected  customer
levels while maintaining superior performance. Any failure of the Company's
server  and  networking  systems  to handle  current  or higher  volumes of
traffic would have a material  adverse  effect on the  Company's  business,
results of operations and financial condition.

     The Company is also dependent upon third parties to provide  potential
users with Web  browsers and Internet  and online  services  necessary  for
access  to the site.  In the  past,  users  have  occasionally  experienced
difficulties  with  Internet and online  services  due to system  failures,
including failures  unrelated to the Company's  systems.  Any disruption in
Internet  access  provided by third parties  could have a material  adverse
effect on the  Company's  business,  results of  operations  and  financial
condition.  Furthermore, the Company is dependent on hardware suppliers for
prompt delivery,  installation and service of equipment used to deliver the
Company's products and services.

     The  Company's  operations  are  dependent in part upon its ability to
protect  its  operating  systems  against  damage from human  error,  fire,
floods,  power loss,  telecommunications  failures,  break-ins  and similar
events.  The  Company  does not  presently  have  redundant,  multiple-site
capacity in the event of any such  occurrence.  The  Company's  servers are
also vulnerable to computer viruses, break-ins and similar disruptions from
unauthorized  tampering with the Company's computer systems. The occurrence
of any of these events could result in the interruption, delay or cessation
of service,  which could have a material  adverse  effect on the  Company's
business,  results of operations and financial condition.  In addition, the
Company's  reputation  and  theglobe.com  brand  could  be  materially  and
adversely affected.

Security Risks

     Experienced  programmers  ("hackers")  have  attempted  on occasion to
penetrate the Company's  network  security.  The Company expects that these
attempts, some of which have succeeded, will continue to occur from time to
time.  Because a hacker  who is able to  penetrate  the  Company's  network
security   could   misappropriate    proprietary   information   or   cause
interruptions  in the Company's  products and services,  the Company may be
required to expend significant  capital and resources to protect against or
to alleviate problems caused by such parties. Additionally, the Company may
not have a timely  remedy  against a hacker  who is able to  penetrate  its
network security.  Such purposeful  security breaches could have a material
adverse  effect  on the  Company's  business,  results  of  operations  and
financial  condition.  In addition to  purposeful  security  breaches,  the
inadvertent  transmission of computer viruses could expose the Company to a
material risk of loss or litigation and possible liability.

     In  offering  certain  payment  services  through  its   "globeStores"
program,  the Company could become  increasingly  reliant on encryption and
authentication  technology  licensed  from third  parties  to  provide  the
security and  authentication  necessary to effect  secure  transmission  of
confidential information, such as customer credit card numbers. Advances in
computer  capabilities,  discoveries in the field of cryptography and other
discoveries,  events, or developments  could lead to a compromise or breach
of the algorithms that the Company's licensed encryption and authentication
technology  used  to  protect  such  confidential  information.  If  such a
compromise or breach of the Company's  licensed  encryption  authentication
technology occurs, it could have a material adverse effect on the Company's
business, results of operations and financial condition. The Company may be
required  to expend  significant  capital  and  resources  and  engage  the
services of third parties to protect  against the threat of such  security,
encryption and authentication  technology breaches or to alleviate problems
caused  by  such   breaches.   Concerns   over  the  security  of  Internet
transactions  and the  privacy of users may also  inhibit the growth of the
Internet  generally,  particularly  as a  means  of  conducting  commercial
transactions.

Intense Competition

     The market for  members,  users and  Internet  advertising  is new and
rapidly evolving,  and competition for members,  users and advertisers,  as
well as competition in the e-commerce market, is intense and is expected to
increase significantly.  Barriers to entry are relatively insubstantial and
the Company may face competitive  pressures from many additional  companies
both in the United States and abroad.

     The  Company  believes  that the  principal  competitive  factors  for
companies seeking to create  communities on the Internet are critical mass,
functionality  of the Web site,  brand  recognition,  member  affinity  and
loyalty,  broad  demographic  focus and open  access  for  visitors.  Other
companies that are primarily focused on creating  Internet  communities are
Tripod, Inc., a subsidiary of Lycos, Inc. ("Tripod"),  and GeoCities,  Inc.
("GeoCities"), and, in the future, Internet communities may be developed or
acquired by companies currently operating Web directories,  search engines,
shareware  archives and content  sites,  and by commercial  online  service
providers ("OSPs"), Internet service providers ("ISPs") and other entities,
certain of which may have more  resources  than the  Company.  The  Company
competes for users and  advertisers  with other content  providers and with
thousands  of  Web  sites  operated  by  individuals,  the  government  and
educational institutions.  Such providers and sites include America Online,
Inc.  ("AOL"),  Angelfire  Communications,  a  subsidiary  of  Lycos,  Inc.
("Angelfire"),  CNET,  Inc.  ("CNET"),  CNN/Time  Warner,  Inc.  ("CNN/Time
Warner"),  Excite, Inc. ("Excite"),  Hotmail  Corporation,  a subsidiary of
Microsoft  Corporation  ("Hotmail"),   Infoseek  Corporation  ("Infoseek"),
Lycos,  Inc.  ("Lycos"),  Microsoft  Corporation  ("Microsoft"),   Netscape
Communications Corporation ("Netscape"),  Switchboard Inc. ("Switchboard"),
Talk  City,  Inc.  ("Talk  City"),  Xoom  Inc.  ("Xoom")  and  Yahoo!  Inc.
("Yahoo!").  In addition,  the Company could face competition in the future
from traditional media companies, such as newspaper,  magazine,  television
and radio companies,  a number of which,  including The Walt Disney Company
("Disney"),  CBS Corporation ("CBS") and The National  Broadcasting Company
("NBC"),  have recently made significant  acquisitions of or investments in
Internet companies.

     The  Company  believes  that  the  principal  competitive  factors  in
attracting advertisers include the amount of traffic on its Web site, brand
recognition,  customer  service,  the demographics of the Company's members
and users,  the  Company's  ability  to offer  targeted  audiences  and the
overall  cost  effectiveness  of  the  advertising  medium  offered  by the
Company. The Company believes that the number of Internet companies relying
on Internet-based advertising revenue, as well as the number of advertisers
on the Internet and the number of users, will increase substantially in the
future.  Accordingly,  the Company will likely face increased  competition,
resulting in increased  pricing pressures on its advertising  rates,  which
could have a material adverse effect on the Company.

     Many of the Company's  existing and potential  competitors,  including
companies  operating Web directories  and search  engines,  and traditional
media companies,  have longer  operating  histories in the Internet market,
greater name recognition,  larger customer bases and significantly  greater
financial,  technical  and  marketing  resources  than  the  Company.  Such
competitors may be able to undertake more extensive marketing campaigns for
their  brands and  services,  adopt  more  aggressive  advertising  pricing
policies  and  make  more   attractive   offers  to  potential   employees,
distribution  partners,  e-commerce companies,  advertisers and third-party
content  providers.  Furthermore,  the  Company's  existing  and  potential
competitors may develop  communities  that are equal or superior in quality
to, or that achieve greater market acceptance than, theglobe.com. There can
be no  assurance  that the  Company  will be able to  compete  successfully
against its current or future competitors or that competition will not have
a material adverse effect on the Company's business,  results of operations
and financial condition.

     Additionally,  the e-commerce market is new and rapidly evolving,  and
competition   among   e-commerce   merchants   is   expected   to  increase
significantly.  The Company will rely  primarily on e-commerce  partners to
generate  e-commerce  revenues.  The Company's ability to generate revenues
from any of its  present or future  e-commerce  partners  may be  adversely
affected  by  competition  between  any such  partner  and  other  Internet
retailers.

     There can be no assurance  that Web sites  maintained by the Company's
existing and potential  competitors will not be perceived by advertisers as
being more desirable for placement of advertisements than theglobe.com.  In
addition, many of the Company's current advertising customers and strategic
partners have established  collaborative  relationships with certain of the
Company's existing or potential competitors. There can be no assurance that
the Company  will be able to retain or grow its  membership  base,  traffic
levels  and  advertising  customer  base  at  historical  levels,  or  that
competitors will not experience better retention or greater growth in these
areas than the Company. Accordingly,  there can be no assurance that any of
the  Company's  advertising  customers,  strategic  partners or  e-commerce
partners  will not sever or will elect not to renew their  agreements  with
the Company,  the result of which could have a material  adverse  effect on
the Company's business, results of operations and financial condition.

Dependence on Third-Party Relationships

     The Company is and will  continue to be  significantly  dependent on a
number of third-party relationships to increase traffic on theglobe.com and
thereby  generate  advertising  revenues,  maintain  the  current  level of
service and variety of content for its members, and meet future milestones.
The Company is generally dependent on other Web site operators that provide
links to  theglobe.com.  The Company  also has  relationships  with several
online  retailers  whereby the Company is paid for providing to them online
storefronts and promotional materials on theglobe.com.

     Most of the Company's arrangements with third-party Internet sites and
other   third-party   service  providers  do  not  require  future  minimum
commitments to use the Company's  services or to provide access or links to
the Company's services or products, are not exclusive and are short-term or
may be  terminated at the  convenience  of the other party.  Moreover,  the
Company  does  not have  agreements  with the  majority  of other  Web site
operators that provide links to  theglobe.com,  and such Web site operators
may terminate such links at any time without  notice to the Company.  There
can be no assurance that third parties regard their  relationship  with the
Company as important to their own  respective  businesses  and  operations,
that they will not reassess their  commitment to the Company at any time in
the future or that they will not develop their own competitive  services or
products.

     There can be no  assurance  that the Company  will be able to maintain
relationships  with third  parties that supply the Company with software or
products that are crucial to the Company's  success,  or that such software
or  products  will be able to  sustain  any  third-party  claims  or rights
against  their  use.  Furthermore,  there  can  be no  assurance  that  the
software,  services or products of those  companies  that provide access or
links to the Company's  services or products will achieve market acceptance
or  commercial  success.  Accordingly,  there can be no assurance  that the
Company's   existing   relationships  will  result  in  sustained  business
partnerships,  successful service or product offerings or the generation of
significant  revenues  for  the  Company.  Failure  of one or  more  of the
Company's strategic  relationships to achieve or maintain market acceptance
or  commercial  success  or  the  termination  of one  or  more  successful
strategic  relationships  could  have  a  material  adverse  effect  on the
Company's  business,  results of  operations  and financial  condition.  In
particular,  the elimination of a  pre-installed  bookmark on a Web browser
that directs traffic to the Company's Web site could  significantly  reduce
traffic on the  Company's  Web site,  which  would have a material  adverse
effect on the  Company's  business,  results of  operations  and  financial
condition.

Additional Financing Requirements; Ability to Incur Debt; Expected Negative
Operating Cash Flow for the Foreseeable Future

     The Company currently anticipates that the net proceeds of its initial
public  offering,  together with available  funds and cash flows  generated
from advertising revenues, will be sufficient to meet its anticipated needs
for working capital,  capital  expenditures and business  expansion for the
next 12 months.  The Company  expects that it will  continue to  experience
negative  operating  cash  flow for the  foreseeable  future as a result of
significant  spending on advertising and infrastructure.  Accordingly,  the
Company may need to raise  additional  funds in a timely manner in order to
fund  its  anticipated  expansion,  develop  new or  enhanced  services  or
products,   respond  to  competitive  pressures  or  acquire  complementary
products,  businesses  or  technologies.  If  additional  funds are  raised
through  the  issuance  of  equity  or  convertible  debt  securities,  the
percentage  ownership of the  stockholders  of the Company will be reduced,
stockholders  may experience  additional  dilution and such  securities may
have rights,  preferences  or privileges  senior to those of the holders of
the Common  Stock.  The Company  does not  currently  have any  contractual
restrictions  on its  ability to incur debt and,  accordingly,  the Company
could incur significant  amounts of indebtedness to finance its operations.
Any such  indebtedness  could contain  covenants  which would  restrict the
Company's  operations.  There can be no assurance that additional financing
will be available on terms favorable to the Company, or at all. If adequate
funds are not  available or are not  available  on  acceptable  terms,  the
Company  may  not  be  able  to  fund  its  expansion,  take  advantage  of
acquisition  opportunities,  develop or enhance  services  or  products  or
respond to competitive pressures. See "Management's Discussion and Analysis
of Financial  Condition  and Results of  Operations--Liquidity  and Capital
Resources."

Risks Associated with Potential Acquisitions

     As part of its  business  strategy,  the  Company  expects  to  review
acquisition prospects that would complement its existing business,  augment
the   distribution   of  its   community   or  enhance  its   technological
capabilities.   Future   acquisitions   by  the  Company  could  result  in
potentially  dilutive issuances of equity  securities,  large and immediate
write-offs,   the  incurrence  of  debt  and   contingent   liabilities  or
amortization  expenses related to goodwill and other intangible assets, any
of which could  materially  and adversely  affect the  Company's  business,
results of operations and financial condition.

     Furthermore,  acquisitions  entail  numerous risks and  uncertainties,
including  difficulties  in  the  assimilation  of  operations,  personnel,
technologies,  products and information  systems of the acquired companies,
the diversion of management's  attention from other business concerns,  the
risks of entering  geographic and business markets in which the Company has
no or limited prior  experience  and the potential loss of key employees of
acquired  organizations.  The Company has not made any  acquisitions in the
past.  No  assurance  can be  given as to the  ability  of the  Company  to
successfully integrate any businesses,  products, technologies or personnel
that might be acquired in the future,  and the failure of the Company to do
so could have a material adverse effect on the Company's business,  results
of operations and financial condition.

Reliance on Intellectual Property and Proprietary Rights

     The  Company  regards  substantial   elements  of  its  Web  site  and
underlying  technology  as  proprietary  and  attempts  to protect  them by
relying on intellectual  property laws, including trademark,  service mark,
copyright  and  trade  secret  laws  and  restrictions  on  disclosure  and
transferring  title and other methods.  The Company also  generally  enters
into  confidentiality  agreements with its employees and consultants and in
connection  with its license  agreements  with third  parties and generally
seeks  to  control   access  to  and   distribution   of  its   technology,
documentation and other proprietary information. Despite these precautions,
it may be possible  for a third party to copy or  otherwise  obtain and use
the Company's  proprietary  information without authorization or to develop
similar technology  independently.  The Company pursues the registration of
its  trademarks in the United States and  internationally.  The Company has
registered a United States  trademark  for theglobe.  The Company has filed
United States  trademark  applications  for  theglobe.com  and theglobe.com
logo.  Additionally,  the Company has submitted trademark  applications for
theglobe.com logo in Australia,  Brazil,  Canada, China, the European Union
(covering Austria,  Belgium,  Denmark,  Finland,  France, Germany,  Greece,
Italy, Ireland,  Luxembourg,  the Netherlands,  Portugal, Spain, Sweden and
the United Kingdom), Hong Kong, Israel, Japan, New Zealand, Norway, Russia,
Singapore,  South  Africa,  Switzerland  and Taiwan.  Effective  trademark,
service mark, copyright and trade secret protection may not be available in
every  country in which the  Company's  services  are  distributed  or made
available  through  the  Internet,  and  policing  unauthorized  use of the
Company's proprietary information is difficult.

     Legal standards relating to the validity,  enforceability and scope of
protection of certain proprietary rights in Internet-related businesses are
uncertain  and  still  evolving,  and no  assurance  can be given as to the
future viability or value of any of the Company's proprietary rights. There
can be no  assurance  that the  steps  taken by the  Company  will  prevent
misappropriation  or  infringement of its  proprietary  information,  which
could have a material adverse effect on the Company's business,  results of
operations and financial condition.

     Litigation  may be  necessary  in the future to enforce the  Company's
intellectual  property rights, to protect the Company's trade secrets or to
determine the validity and scope of the proprietary rights of others.  Such
litigation might result in substantial costs and diversion of resources and
management  attention.  Furthermore,  there  can be no  assurance  that the
Company's business activities will not infringe upon the proprietary rights
of  others,  or that other  parties  will not  assert  infringement  claims
against the  Company,  including  claims  that by  directly  or  indirectly
providing  hyperlink  text links to Web sites  operated  by third  parties.
Moreover,  from  time to time,  the  Company  may be  subject  to claims of
alleged  infringement  by the  Company or its  members  of the  trademarks,
service marks and other intellectual property rights of third parties. Such
claims and any  resultant  litigation,  should it occur,  might subject the
Company to significant liability for damages,  might result in invalidation
of the Company's  proprietary  rights and, even if not  meritorious,  could
result in  substantial  costs and  diversion  of resources  and  management
attention  and  could  have a  material  adverse  effect  on the  Company's
business, results of operations and financial condition.

     The Company currently licenses from third parties certain technologies
incorporated into  theglobe.com.  As the Company continues to introduce new
services that incorporate new  technologies,  it may be required to license
additional  technology  from others.  There can be no assurance  that these
third-party  technology  licenses  will  continue  to be  available  to the
Company on commercially  reasonable terms, if at all.  Additionally,  there
can be no assurance that the third parties from which the Company currently
licenses its  technology  will be able to defend their  proprietary  rights
successfully against claims of infringement.  As a result, any inability of
the  Company to obtain any of these  technology  licenses  could  result in
delays or reductions in the introduction of new services or could adversely
affect the performance of its existing services until equivalent technology
can be identified, licensed and integrated.

Government Regulation and Legal Uncertainties Associated with the Internet

     A number of legislative and regulatory  proposals under  consideration
by federal, state, local and foreign governmental organizations may lead to
laws or regulations concerning various aspects of the Internet,  including,
but not limited to, online content, user privacy, taxation, access charges,
liability for third-party activities and jurisdiction.  Additionally, it is
uncertain as to how existing  laws will be applied by the  judiciary to the
Internet.  The adoption of new laws or the application of existing laws may
decrease  the  growth  in the  use of the  Internet,  which  could  in turn
decrease the demand for the Company's services, increase the Company's cost
of doing  business  or  otherwise  have a  material  adverse  effect on the
Company's business, results of operations and financial condition.

     There can be no assurance  that the United  States or foreign  nations
will not enact  legislation or seek to enforce existing laws prohibiting or
restricting  certain content,  such as online gambling,  from the Internet.
Currently, online gambling advertisers account for under ten percent of the
Company's  advertising  revenues.  Prohibition  and restriction of Internet
content could dampen the growth of Internet use, decrease the acceptance of
the Internet as a communications and commercial medium,  expose the Company
to liability, and/or require substantial modification of theglobe.com,  and
thereby have a material adverse effect on the Company's  business,  results
of operations and financial condition.

     Internet  user  privacy has become an issue both in the United  States
and abroad.  Recently,  the Children's  Online  Privacy  Protection Act was
signed into law, which  authorizes the Federal Trade Commission (the "FTC")
to  develop  regulations  for the  collection  of  data  from  children  by
commercial  Web site  operators.  The Company is  currently  undertaking  a
review of its information-collection practices. However, the Company cannot
predict the exact form of the  regulations  that the FTC may adopt.  At the
international  level, the European Union (the "EU") has adopted a directive
(the  "Directive")  that  provides  for  EU  members  countries  to  impose
restrictions on the collection and use of personal data,  effective October
25, 1998.  The Directive  could,  among other things,  affect United States
companies that collect information over the Internet from individuals in EU
member countries,  and may impose restrictions that are more stringent than
current  Internet privacy  standards in the United States.  There can be no
assurance  that the  United  States  or  foreign  nations  will  not  adopt
additional  legislation purporting to protect such privacy. Any such action
could  affect  the way in which the  Company  is  allowed  to  conduct  its
business,  especially  those aspects that involve the  collection or use of
personal  information,  and could  have a  material  adverse  effect on the
Company's business, results of operations and financial condition.

     The  tax  treatment  of  the  Internet  and  e-commerce  is  currently
unsettled.  A number of proposals have been made at the federal,  state and
local level and by certain foreign  governments  that could impose taxes on
the sale of goods and  services  and  certain  other  Internet  activities.
Recently,  the  Internet  Tax Freedom  Act was signed  into law,  placing a
three-year  moratorium  on new state and local taxes on certain  aspects of
Internet  commerce.  However,  there can be no  assurance  that future laws
imposing taxes or other regulations on commerce over the Internet would not
substantially  impair  the  growth  of  e-commerce  and as a result  have a
material  adverse effect on the Company's  business,  results of operations
and financial condition.

     Certain  local  telephone  carriers  have  asserted  that the  growing
popularity   and  use  of  the   Internet   has   burdened   the   existing
telecommunications  infrastructure,  and that many areas with high Internet
use have begun to  experience  interruptions  in telephone  service.  These
carriers have petitioned the Federal Communications  Commission (the "FCC")
to impose  access fees on ISPs and OSPs.  If such access fees are  imposed,
the costs of  communicating  on the Internet could increase  substantially,
potentially slowing the growth in use of the Internet,  which could in turn
decrease  demand for the Company's  services or increase the Company's cost
of doing business, and thus have a material adverse effect on the Company's
business, results of operations and financial condition.

     Although the Company's server is located in the State of New York, the
governments  of other states and foreign  countries  might  attempt to take
action  against the Company for  violations of their laws.  There can be no
assurance  that  violations  of such laws will not be alleged or charged by
state or foreign  governments  and that such laws will not be modified,  or
new laws enacted, in the future. Any of the foregoing could have a material
adverse  effect  on the  Company's  business,  results  of  operations  and
financial condition.

Liability for Information Retrieved from or Transmitted over the Internet;
Liability for Products Sold over the Internet

     Because materials may be downloaded by the online or Internet services
operated or  facilitated  by the Company or the Internet  access  providers
with which it has  relationships  and may be  subsequently  distributed  to
others,  there is a potential  that claims will be made against the Company
for defamation,  negligence,  copyright or trademark  infringement or other
theories  based on the nature and  content of such  materials.  Such claims
have been brought  against  online  services in the past and,  from time to
time, the Company has received  inquiries from third parties regarding such
matters.  Such claims  could be material in the future.  In  addition,  the
increased attention focused upon liability issues and legislative proposals
could materially impact the overall growth of Internet use.

     The  Company  could  also be  exposed  to  liability  with  respect to
third-party  information  that may be accessible  through the Company's Web
site,  or through  content and  materials  that may be posted by members on
their personal Web sites or on chat rooms or bulletin boards offered by the
Company.  Such claims might  include,  among  others,  that, by directly or
indirectly  providing  hyperlink  text links to Web sites operated by third
parties or by providing hosting services for members' sites, the Company is
liable for copyright or trademark infringement or other wrongful actions by
such third parties through such Web sites. It is also possible that, if any
third-party content information provided on the Company's Web site contains
errors,  third  parties  could make  claims  against the Company for losses
incurred in reliance on such information.

     The Company offers e-mail service, which is provided by a third party.
See  "--Dependence on Third-Party  Relationships."  Such service may expose
the Company to potential risk, such as liabilities or claims resulting from
unsolicited e-mail ("spamming"),  lost or misdirected messages,  illegal or
fraudulent use of e-mail or interruptions or delays in e-mail service.

     The Company also enters into  agreements  with  commerce  partners and
sponsors  under  which the  Company is  entitled  to receive a share of any
revenue from the purchase of goods and services  through  direct links from
the  Company's  Web site.  Such  arrangements  may  expose  the  Company to
additional legal risks and uncertainties,  including pursuant to regulation
by local, state, federal and foreign authorities and potential  liabilities
to consumers of such  products and  services,  even if the Company does not
itself  provide such products or services.  There can be no assurance  that
any  indemnification  provided to the Company in its agreements  with these
parties, if available, will be adequate.

     Even to the  extent  such  claims do not  result in  liability  to the
Company,  the Company could incur  significant  costs in investigating  and
defending  against such claims.  The imposition on the Company of potential
liability for information  carried on or  disseminated  through its systems
could  require the Company to implement  measures to reduce its exposure to
such liability,  which may require the expenditure of substantial resources
and limit the  attractiveness  of the  Company's  services  to members  and
users.

     The Company's general liability  insurance may not cover all potential
claims to which it is  exposed  or may not be  adequate  to  indemnify  the
Company for all liability that may be imposed.  Any imposition of liability
that is not  covered by  insurance  or is in excess of  insurance  coverage
could have a material adverse effect on the Company's business,  results of
operations and financial condition.

Risks Associated with International Operations and Expansions

     A  part  of  the   Company's   strategy  is  to  continue  to  develop
theglobe.com community model in international markets. Approximately 25% to
30% of the Company's monthly traffic  originates from abroad.  There can be
no assurance that the Internet or the Company's community model will become
widely  accepted  for  advertising  and  e-commerce  in  any  international
markets.  In  addition,  the  Company  expects  that  the  success  of  any
additional  foreign  operations  it  initiates  in the future  will also be
substantially dependent upon local partners. If revenues from international
ventures are not adequate to cover the investments in such activities,  the
Company's business,  results of operations and financial condition could be
materially and adversely affected. The Company may experience difficulty in
managing international  operations as a result of difficulty in locating an
effective foreign partner, competition,  technical problems, local laws and
regulations,  distance and language and cultural differences, and there can
be no assurance that the Company or its international partners will be able
to successfully market and operate the Company's community model in foreign
markets.   The  Company  also  believes   that,  in  light  of  substantial
anticipated  competition,  it  will  be  necessary  to  move  quickly  into
international  markets in order to  effectively  obtain market  share,  and
there can be no assurance that the Company will be able to do so. There are
certain risks inherent in doing business on an international level, such as
unexpected changes in regulatory requirements, trade barriers, difficulties
in staffing  and  managing  foreign  operations,  fluctuations  in currency
exchange  rates,  longer payment cycles in general,  problems in collecting
accounts  receivable,  difficulty  in enforcing  contracts,  political  and
economic  instability,  seasonal reductions in business activity in certain
other parts of the world and potentially  adverse tax  consequences.  There
can be no  assurance  that  one or more of such  factors  will  not  have a
material  adverse effect on the Company's future  international  operations
and,  consequently,  on the Company's  business,  results of operations and
financial condition.

Control by Current Stockholders

     Michael S. Egan,  the  Chairman of the Company,  beneficially  owns or
controls, directly or indirectly, 6,088,024 shares of Common Stock which in
the aggregate  represents  approximately 49.9% of the Common Stock. Messrs.
Krizelman and Paternot, collectively,  beneficially own 14.9% of the Common
Stock.  Messrs.  Egan,  Krizelman,  Paternot  and  Cespedes  and Rosalie V.
Arthur,  a director of the  Company,  expect to enter into a  stockholders'
agreement (the  "Stockholders'  Agreement")  pursuant to which Dancing Bear
Investments,  Inc., Mr. Egan or entities controlled by Mr. Egan and certain
permitted transferees  (collectively,  the "Egan Group") will agree to vote
for  certain  nominees  of  Messrs.  Krizelman  and  Paternot  or  entities
controlled  by  Messrs.   Krizelman  and  Paternot  and  certain  permitted
transferees (the "Krizelman and Paternot Groups") to the Board of Directors
and the Krizelman  and Paternot  Groups will agree to vote for the nominees
of the Egan Group to the Board.  Accordingly,  the Egan Group together with
the  Krizelman  and  Paternot  Groups  will have the ability to control the
outcome  of all  issues  submitted  to a vote  of the  stockholders  of the
Company requiring majority approval. The Stockholders'  Agreement will also
provide  that the Egan  Group,  the  Krizelman  and  Paternot  Groups,  Mr.
Cespedes  and Ms.  Arthur  will  be  subject  to  certain  "tag-along"  and
"drag-along"  rights in  connection  with any private sale of securities of
the  Company.  Voting  control  by the Egan  Group  and the  Krizelman  and
Paternot Groups may discourage  certain types of transactions  involving an
actual  or  potential   change  of  control  of  the   Company,   including
transactions  in which the holders of Common Stock might  receive a premium
for their shares over prevailing market prices.

Impact of the Year 2000

     The Year  2000  issue  is the  potential  for  system  and  processing
failures of date-related data and the result of computer-controlled systems
using two  digits  rather  than four to define  the  applicable  year.  For
example,  computer programs that have time-sensitive software may recognize
a date using "00" as the year 1900  rather  than the Year 2000.  This could
result  in  system  failure  or  miscalculations   causing  disruptions  of
operations, including, among other things, a temporary inability to process
transactions,   send  invoices  or  engage  in  similar   normal   business
activities.

     The  Company   may  be  affected  by  Year  2000  issues   related  to
non-compliant  information  technology  ("IT")  systems  or non-IT  systems
operated by the Company or by third parties.  The Company has substantially
completed assessment of its internal and external  (third-party) IT systems
and non-IT  systems.  At this point in its  assessment,  the Company is not
currently aware of any Year 2000 problems  relating to systems  operated by
the Company or by third  parties  that would have a material  effect on the
Company's business,  results of operations or financial condition,  without
taking into account the Company's efforts to avoid such problems.  Based on
its  assessment  to date,  the  Company  does  not  anticipate  that  costs
associated  with  remediating  the  Company's  non-compliant  IT systems or
non-IT systems will be material, although there can be no assurance to such
effect.  See "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations--Impact of the Year 2000."

     To the extent  that the  Company's  assessment  is  finalized  without
identifying any additional  material  non-compliant  IT systems operated by
the Company or by third parties, the most reasonably likely worst case Year
2000  scenario  is the failure of one or more of the  Company's  vendors of
hardware  or  software or one or more  providers  of non-IT  systems to the
Company to properly  identify any Year 2000 compliance issues and remediate
any such issues prior to December 31, 1999.  The Company  believes that the
primary  business risks, in the event of such failure,  would include,  but
not be limited to, lost advertising  revenues,  increased  operating costs,
loss of customers or persons  accessing  the  Company's  Web site, or other
business  interruptions  of  a  material  nature,  as  well  as  claims  of
mismanagement, misrepresentation, or breach of contract, any of which could
have a  material  adverse  effect on the  Company's  business,  results  of
operations and financial condition.

Impact of General Economic Conditions

     Time spent on the Internet by individuals,  purchases of new computers
and purchases of membership  subscriptions  to Internet sites are typically
discretionary  for  consumers and may be  particularly  affected by adverse
trends in the  general  economy.  The success of the  Company's  operations
depends  to a  significant  extent  upon a number of  factors  relating  to
discretionary   consumer  spending,   including  economic  conditions  (and
perceptions of such conditions by consumers)  affecting disposable consumer
income  such  as  employment,  wages  and  salaries,  business  conditions,
interest rates,  availability of credit and taxation,  for the economy as a
whole and in regional and local markets where the Company  operates.  There
can be no assurance that consumer  spending will not be adversely  affected
by general economic conditions, which could negatively impact the Company's
results of operations or financial condition. Any significant deterioration
in general  economic  conditions or increases in interest rates may inhibit
consumers'  use of  credit  and  cause a  material  adverse  effect  on the
Company's revenues and profitability.  In addition,  the Company's business
strategy  relies on  advertising  by and  agreements  with  other  Internet
companies.  Any significant  deterioration in general  economic  conditions
that adversely  affected these companies could also have a material adverse
effect on the  Company's  business,  results of  operations  and  financial
condition.

Possible Volatility of Stock Price

     The trading price of the Company's  Common Stock has been volatile and
may  continue to be subject to wide  fluctuations  in response to quarterly
variations in operating results, announcements of technological innovations
or new products and services by the Company or its competitors,  changes in
financial estimates by securities  analysts,  the operating and stock price
performance of other  companies  that investors may deem  comparable to the
Company  and other  events or factors.  In  addition,  the stock  market in
general,   and  the  market  prices  for   Internet-related   companies  in
particular,  have  experienced  extreme  volatility  that  often  has  been
unrelated  to the  operating  performance  of such  companies.  These broad
market and industry  fluctuations may adversely affect the trading price of
the  Company's  Common  Stock,   regardless  of  the  Company's   operating
performance.  In the past,  following  periods of  volatility in the market
price of a company's  securities,  securities  class action  litigation has
often been instituted against such company. Such litigation, if instituted,
whether  or  not  successful,  could  result  in  substantial  costs  and a
diversion  of  management's  attention  and  resources,  which would have a
material  adverse effect on the Company's  business,  results of operations
and financial condition.

Shares Eligible for Future Sale; No Prior Trading Market; Registration Rights

     The Company  currently has outstanding a total of 10,308,756 shares of
Common  Stock,  and 826,950 and 584,021  shares of Common Stock  subject to
stock options  granted under the Company's  1998 Stock Option Plan and 1995
Stock Option Plan,  respectively.  In addition,  2,023,009 shares of Common
Stock are currently issuable upon exercise of outstanding  warrants. Of the
5,628,884  shares of capital  stock issued prior to the  Company's  initial
public offering and not registered under the Securities Act,  approximately
1,062,455  shares are not  subject to the  volume  limitations  of Rule 144
under the Securities Act and are currently  eligible for sale in the public
market without  restriction.  Holders of substantially all of the Company's
Common Stock have been granted  registration rights.  However,  pursuant to
the terms of the  agreements  under  which  the  registration  rights  were
granted,  such  holders  have agreed not to sell or  otherwise  transfer or
dispose of any shares of Common  Stock or other  securities  of the Company
held by them  without  the consent of the Company for a period of up to 180
days after November 12, 1998. Additionally,  the Company and members of the
Company's  management who are stockholders of the Company and certain other
stockholders have agreed that, subject to certain exceptions,  for a period
of 180 days after November 12, 1998,  without the prior written  consent of
Bear,  Stearns & Co. Inc. (the lead managing  underwriter for the Company's
initial public  offering),  they will not,  directly or indirectly,  issue,
sell, offer or agree to sell, grant any option for the sale,  pledge,  make
any short sale,  establish  an open "put  equivalent  position"  within the
meaning of Rule 16a-1(h)  under the Exchange  Act, or otherwise  dispose of
any shares of Common Stock (or securities convertible into, exercisable for
or exchangeable  for Common Stock) of the Company.  The Company has filed a
registration  statement  on Form S-8 for the shares  held  pursuant  to its
option plans which makes those shares freely tradable upon exercise of such
options.

     No information is currently available and no prediction can be made as
to the timing or amount of future  sales of such shares or the  effect,  if
any, that future sales of shares,  or the availability of shares for future
sale,  will have on the market  price of the Common Stock  prevailing  from
time to time.  Sales of  substantial  amounts  of Common  Stock  (including
shares issuable upon the exercise of stock options), or the perception that
such sales could occur, could materially adversely affect prevailing market
prices for the Common  Stock and the ability of the Company to raise equity
capital in the future.

Antitakeover Effect of Certain Charter Provisions

     The Board of  Directors  has adopted a rights  agreement  (the "Rights
Agreement")  that  may  have  the  effect  of  discouraging,   delaying  or
preventing  a change in control of the Company or  unsolicited  acquisition
proposals.  Further, certain provisions of the Company's Fourth Amended and
Restated Certificate of Incorporation and By-Laws and of Delaware law could
have the  effect of  delaying  or  preventing  a change in  control  of the
Company.

Absence of Dividends

     The  Company  does not  anticipate  paying any cash  dividends  in the
foreseeable future.


<PAGE>


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     Not applicable.


<PAGE>


                                  PART II

                             OTHER INFORMATION

Item 1.  Legal Proceedings

     There are no material legal  proceedings  pending or, to the Company's
knowledge, threatened against the Company.

Item 2.  Changes in Securities and Use of Proceeds

     (c) SALES OF UNREGISTERED SECURITIES.  During the period from June 30,
1998  through  September  30,  1998,  the Company  granted an  aggregate of
822,650  options to purchase  Common Stock to its  officers,  directors and
employees  pursuant to the Company's 1998 Stock Option Plan with a weighted
average  exercise  price  equal to $9 per share of Common  Stock,  with the
exception of 87,500  options  granted to one officer at $7.65.  All of such
option  grants were made pursuant to the  exemption  from the  registration
requirements  of the Securities  Act of 1933, as amended,  afforded by Rule
701  promulgated  thereunder.  As of December 22, 1998, the total number of
shares of Common Stock subject to stock options granted under the Company's
1998 Stock  Option Plan and 1995 Stock Option Plan were 826,950 and 584,021
shares, respectively.

     (d) USE OF PROCEEDS FROM SALES OF REGISTERED  SECURITIES.  On November
13, 1998, the Company  completed an initial  public  offering of its Common
Stock,  $0.001 par value.  The managing  underwriters  in the offering were
Bear, Stearns & Co. Inc. and Volpe Brown Whelan & Co. (the "Underwriters").
The shares of Common Stock sold in the offering were  registered  under the
Securities Act of 1933, as amended, on a Registration Statement on Form S-1
(the  "Registration  Statement")  (Reg.  No.  333-59751)  that was declared
effective by the Securities  and Exchange  Commission on November 12, 1998.
The offering commenced on November 13, 1998. All 3,100,000 shares of Common
Stock registered  under the Registration  Statement were sold at a price of
$9.00 per share. The Underwriters also exercised an overallotment option of
381,667 shares on November 13, 1998. All 381,667  overallotment shares were
sold at a price of $9.00 per share.  The  aggregate  price of the  offering
amount  registered  and  sold  was  $31,335,003.  In  connection  with  the
offering,  the Company  paid an  aggregate of  $2,018,450  in  underwriting
discounts and commissions to the Underwriters.  In addition,  the following
table sets forth the other material  expenses  incurred in connection  with
the offering.


<PAGE>


          Nasdaq National Market filing and listing fee     76,000
          Printing and engraving expenses                  265,000
          Legal fees and expenses                        1,090,000
          Accounting fees and expenses                     278,000
          Consulting fees and expenses                      78,000
          Roadshow and travel expenses                     192,000
          Transfer Agent and Registrar fees                  5,000
          Miscellaneous                                     16,000
                                                        ----------
          Total                                         $2,000,000
                                                        ----------

     After  deducting the  underwriting  discounts and  commissions and the
offering  expenses  described above, the Company received net proceeds from
the offering of  approximately  $27,316,553.  The proceeds from the initial
public  offering will be used for  investments  in  theglobe.com  Web site,
including   enhancements   to   the   Company's   server   and   networking
infrastructure  and the functionality of its Web site and general corporate
purposes,  including working capital,  expansion of its sales and marketing
capabilities and brand-name promotions.  The Company may also use a portion
of such proceeds for acquisitions of complementary businesses, services and
technology. None of the Company's net proceeds of the offering will be paid
directly or  indirectly to any director,  officer,  general  partner of the
Company  or their  associates,  persons  owning 10% or more of any class of
equity securities of the Company, or an affiliate of the Company.

Item 3.  Defaults Upon Senior Securities.

     None.

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

     As of July 15, 1998, in a Written  Consent of the  stockholders of the
Company, a majority of the holders of the then outstanding shares of Common
Stock of the Company  (which  majority  included  all of the holders of the
Preferred Stock of the Company,  voting on an as converted basis), approved
the adoption of the 1998 Stock Option Plan.

     As of July 15, 1998, in a Written  Consent of the  stockholders of the
Company, a majority of the holders of the then outstanding shares of Common
Stock of the Company (which majority  included the holders of the Preferred
Stock of the Company, voting on an as converted basis), approved the Fourth
Amended and Restated Certificate of Incorporation of the Company.

Item 5.  Other Information.

     None.

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

     (a) Exhibits

         Exhibit Number          Description
         11.1                    Computation of Loss Per Share
         27.1                    Financial Data Schedule

     (b) Reports on Form 8-K.

         None.


<PAGE>


                                 SIGNATURES

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



                              theglobe.com, inc.

                              /s/ Francis T. Joyce          
                              ------------------------------
                              Francis T. Joyce
                              Vice President, Chief Financial Officer
                              and Treasurer (Principal Financial and
                              Accounting Officer)

December 22, 1998