**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-K**





(Mark
      One)





x  **Annual
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934**


**For
      the fiscal year ended December 31, 2007**





or




o  **Transition
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934**


**For
      the transition period from** ____________ **to** ___________





COMMISSION
      FILE NO. 0-25053





**THEGLOBE.COM,
      INC.**


(EXACT
      NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)





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




110
      EAST
      BROWARD BOULEVARD, SUITE 1400, FORT LAUDERDALE, FL. 33301


(ADDRESS
      OF PRINCIPAL EXECUTIVE OFFICES)





Registrant’s
      telephone number, including area code (954) 769 - 5900





Securities
      registered pursuant to Section 12(b) of the Act: None





Securities
      registered pursuant to Section 12(g) of the Act:





Common
      Stock, par value $.001 per share





Preferred
      Stock Purchase Rights





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


o Yes x No




Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act.


o Yes x No





Indicate
      by check mark whether the registrant: (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days: x Yes o No





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K (Sec.229.405 of this chapter) is not contained herein, and will
      not be contained, to the best of registrant's knowledge, in definitive proxy
      or
      information statements incorporated by reference in Part III of this Form 10-K
      or any amendment to this Form 10-K. x




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




Large
                accelerated filero
            Accelerated
                fileroNon-accelerated
                filer(do
                not check if a smaller reporting company)o
            Smaller
                reporting companyx




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


o Yes x No





Aggregate
      market value of the voting Common Stock held by non-affiliates of the registrant
      as of the close of business as of the last business day of the registrant’s most
      recently completed second fiscal quarter, June 29, 2007:
      $4,227,395*.





*Includes
      voting stock held by third parties, which may be deemed to be beneficially
      owned
      by affiliates, but for which such affiliates have disclaimed beneficial
      ownership.





The
      number of shares outstanding of the Registrant's Common Stock, $.001 par value
      (the "Common Stock") as of March 5, 2008 was 172,484,838.









**theglobe.com,
      inc.**





**FORM
      10-K**





**TABLE
      OF CONTENTS**




PagePART
                IItem
                1.
            
            Business
            
            1Item
                1A.
            
            Risk
                Factors
            
            9Item
                1B.
            
            Unresolved
                Staff Comments
            
            17Item
                2.
            
            Properties
            
            17Item
                3.
            
            Legal
                Proceedings
            
            17Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            18PART
                IIItem
                5.
            
            Market
                for Registrant’s Common Equity, Related Stockholder Matters and Issuer
                Purchases of Equity Securities
            
            18Item
                6.
            
            Selected
                Financial Data
            
            21Item
                7.
            
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            
            22Item
                7A.
            
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            33Item
                8.
            
            Financial
                Statements and Supplementary Data
            
            F-1Item
                9.
            
            Changes
                in and Disagreements With Accountants on Accounting and Financial
                Disclosure
            
            34Item
                9A(T).
            
            Controls
                and Procedures
            
            34Item
                9B.
            
            Other
                Information
            
            35PART
                IIIItem
                10.
            
            Directors,
                Executive Officers and Corporate Governance
            
            35Item
                11.
            
            Executive
                Compensation
            
            38Item
                12.
            
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            
            43Item
                13.
            
            Certain
                Relationships and Related Transactions, and Director
                Independence
            
            45Item
                14.
            
            Principal
                Accounting Fees and Services
            
            47PART
                IVItem
                15.
            
            Exhibits
                and Financial Statement Schedules
            
            48SIGNATURES
            
            
            
            52




i




**FORWARD
      LOOKING STATEMENTS**





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




·
            executing
                our business plans;·
            our
                ability to increase revenue levels;·
            our
                ability to control and reduce operating expenses;·
            potential
                governmental regulation and taxation;·
            the
                outcome of pending litigation;·
            our
                ability to successfully resolve disputed liabilities;·
            our
                estimates or expectations of continued losses;·
            our
                expectations regarding future revenue and expenses;·
            attracting
                and retaining customers and employees;·
            our
                ability to sell our Tralliance business;·
            our
                ability to raise sufficient capital; and·
            our
                ability to continue to operate as a going
                concern.





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








In
      this
      Form 10-K, we refer to information regarding our potential markets and other
      industry data. We believe that we have obtained this information from reliable
      sources that customarily are relied upon by companies in our industry, but
      we
      have not independently verified any of this information.





**PART
      I**


**ITEM
      1. BUSINESS**





**DESCRIPTION
      OF BUSINESS**





As
      of
      December 31, 2007, theglobe.com, inc. (the “Company” or “theglobe”) managed a
      single line of business, Internet services, consisting of Tralliance Corporation
      (“Tralliance”) which is the registry for the “.travel” top-level Internet
      domain. We acquired Tralliance on May 9, 2005. See
      Note
      16, “Subsequent Events” of the Notes to Consolidated Financial Statements
      regarding a proposed transaction whereby the Company would sell its Tralliance
      business and issue approximately 269 million shares of its common stock to
      a
      company controlled by Michael S. Egan, the Company’s Chairman and Chief
      Executive Officer.





In
      March
      2007, management made the decision to shutdown the operations of both its
      computer games and VoIP telephony services lines of business and to focus 100%
      of its resources and efforts to further develop its Internet services business.
      Results of operations for the computer games and VoIP telephony services
      businesses have been reported separately as “Discontinued Operations” in the
      accompanying consolidated statements of operations for all periods presented.
      The assets and liabilities of the computer games and VoIP telephony services
      businesses have been included in “Assets of Discontinued Operations” and
“Liabilities of Discontinued Operations” in the accompanying consolidated
      balance sheets for all periods presented.




1





On
      October 31, 2005, the Company completed the sale of all of the business and
      substantially all of the net assets of SendTec, Inc. (“SendTec”), its direct
      response marketing services and technology business, for approximately
      $39,850,000 in cash. Results of operations for SendTec have been reported
      separately as “Discontinued Operations” in the accompanying consolidated
      statement of operations for the year ended December 31, 2005. ****





**HISTORICAL
      OVERVIEW**





theglobe
      was incorporated on May 1, 1995 (inception) and commenced operations on that
      date. Originally, theglobe.com was an online community with registered members
      and users in the United States and abroad. That product gave users the freedom
      to personalize their online experiences by publishing their own content and
      by
      interacting with others having similar interests. However, due to the
      deterioration of the online advertising market, the Company was forced to
      restructure and ceased the operations of its online community on August 15,
      2001. The Company then sold most of its remaining online and offline properties.
      The Company continued to operate its Computer Games print magazine and the
      associated CGOnline website, as well as the e-commerce games distribution
      business of Chips & Bits. On June 1, 2002, Chairman Michael S. Egan and
      Director Edward A. Cespedes became Chief Executive Officer and President of
      the
      Company, respectively.





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




On
      February 25, 2003, theglobe entered into a Loan and Purchase Option Agreement,
      as amended, with Tralliance, an Internet related business venture, pursuant
      to
      which it agreed to fund, in the form of a loan, at the discretion of the
      Company, Tralliance's operating expenses and obtained the option to acquire
      all
      of the outstanding capital stock of Tralliance in exchange for, when and if
      exercised, $40,000 in cash and the issuance of an aggregate of 2,000,000
      unregistered restricted shares of theglobe’s Common Stock. On May 5, 2005,
      Tralliance and the Internet Corporation for Assigned Names and Numbers ("ICANN")
      entered into an agreement designating Tralliance as the registry for the
      ".travel" top-level domain. On May 9, 2005, the Company exercised its option
      to
      acquire all of the outstanding capital stock of Tralliance. The purchase price
      consisted of the issuance of 2,000,000 shares of theglobe’s Common Stock,
      warrants to acquire 475,000 shares of theglobe’s Common Stock and $40,000 in
      cash. The warrants are exercisable for a period of five years at an exercise
      price of $0.11 per share. The Common Stock issued as a result of the acquisition
      of Tralliance is entitled to certain "piggy-back" registration
      rights.





On
      May
      28, 2003, the Company acquired Direct Partner Telecom, Inc. ("DPT"), a company
      engaged in VoIP telephony services in exchange for 1,375,000 shares of the
      Company’s Common Stock and the issuance of warrants to acquire 500,000 shares of
      the Company’s Common Stock. DPT was a specialized international communications
      carrier providing VoIP communications services to lesser developed countries.
      The DPT network had provided "next generation" packet-based telephony and value
      added data services to carriers and businesses in the United States and
      internationally. The Company acquired all of the physical assets and
      intellectual property of DPT and originally planned to continue to operate
      the
      company as a subsidiary and engage in the provision of VoIP services to other
      telephony businesses on a wholesale transactional basis. In the first quarter
      of
      2004, the Company decided to suspend DPT’s wholesale business and dedicate the
      DPT physical and intellectual assets to its retail VoIP business. As a result,
      the Company wrote-off the goodwill associated with the purchase of DPT as of
      December 31, 2003, and employed DPT’s physical assets in the build out of its
      VoIP network.





On
      September 1, 2004, the Company closed upon an Agreement and Plan of Merger
      dated
      August 31, 2004, pursuant to which the Company acquired all of the issued and
      outstanding shares of capital stock of SendTec, Inc., (“SendTec”), a direct
      response marketing services and technology company. Pursuant to the terms of
      the
      Merger, in consideration for the acquisition of SendTec, theglobe paid
      consideration consisting of: (i) $6,000,000 in cash, excluding transaction
      costs, (ii) the issuance of an aggregate of 17,500,024 shares of theglobe’s
      Common Stock, (iii) the issuance of an aggregate of 175,000 shares of Series
      H
      Automatically Converting Preferred Stock (which was converted into 17,500,500
      shares of theglobe’s Common Stock on December 1, 2004, the effective date of the
      amendment to the Company's certificate of incorporation increasing its
      authorized shares of Common Stock from 200,000,000 shares to 500,000,000
      shares), and (iv) the issuance of a subordinated promissory note in the amount
      of $1 million. The Company also issued an aggregate of 3,974,165 replacement
      options to acquire theglobe’s Common Stock for each of the issued and
      outstanding options to acquire SendTec shares held by the former employees
      of
      SendTec.





On
      August
      10, 2005, the Company entered into an Asset Purchase Agreement with
      RelationServe Media, Inc. ("RelationServe") whereby the Company agreed to sell
      all of the business and substantially all of the net assets of the SendTec
      marketing services subsidiary to RelationServe for $37,500,000 in cash, subject
      to certain net working capital adjustments. On August 23, 2005, the Company
      entered into Amendment No. 1 to the Asset Purchase Agreement with RelationServe
      (the “1 st Amendment” and together with the original Asset Purchase Agreement, the
“Purchase Agreement”). On October 31, 2005, the Company completed the asset
      sale. Including preliminary adjustments to the purchase price related to
      estimated excess working capital of SendTec as of the date of sale, the Company
      received an aggregate of approximately $39,850,000 in cash pursuant to the
      Purchase Agreement.




2





Additionally,
      as contemplated by the Purchase Agreement, immediately following the asset
      sale,
      the Company completed the redemption of approximately 28,879,000 million shares
      of theglobe’s Common Stock owned by six members of the former management of
      SendTec for approximately $11,604,000 in cash pursuant to a Redemption Agreement
      dated August 23, 2005. Pursuant to a separate Termination Agreement, the Company
      also terminated and canceled approximately 1,276,000 stock options and the
      contingent interest in approximately 2,063,000 earn-out warrants held by the
      six
      members of the former management in exchange for approximately $400,000 in
      cash.
      The Company also terminated stock options of certain other non-management
      employees of SendTec and entered into bonus arrangements with a number of other
      non-management SendTec employees for amounts totaling approximately
      $600,000.





In
      March
      2007, management and the Board of Directors of the Company made the decision
      to
      cease all activities related to its computer games businesses, including
      discontinuing the operations of its magazine publications, games distribution
      business and related websites. The Company’s decision to shutdown its computer
      games businesses was based primarily on the historical losses sustained by
      these
      businesses during the recent past and management’s expectations of continued
      future losses. As of December 31, 2007, all significant elements of its computer
      games business shutdown plan have been completed by the Company, except for
      the
      collection and payment of remaining outstanding accounts receivables and
      payables.





In
      addition, in March 2007, management and the Board of Directors of the Company
      decided to discontinue the operating, research and development activities of
      its
      VoIP telephony services business and terminate all of the remaining employees
      of
      the business. **** The
      Company’s decision to discontinue the operations of its VoIP telephony services
      business was based primarily on the historical losses sustained by the business
      during the past several years, management’s expectations of continued losses for
      the foreseeable future and estimates of the amount of capital required to
      attempt to successfully monetize its business. On April 2, 2007, theglobe agreed
      to transfer to Michael Egan all of its VoIP intellectual property in
      consideration for his agreement to provide certain security and credit
      enhancements in connection with the MySpace litigation Settlement Agreement
      (See
      Note 13, “Litigation,” in the accompanying Notes to Consolidated Financial
      Statements for further discussion). The Company had previously written off
      the
      value of the VoIP intellectual property as a result of its evaluation of the
      VoIP telephony services business’ long-lived assets in connection with the
      preparation of the Company’s 2004 year-end consolidated financial statements. As
      of December 31, 2007, all significant elements of its VoIP telephony services
      business shutdown plan have been completed by the Company, except for the
      resolution of certain vendor disputes and the payment of remaining outstanding
      vendor payables.





On
      December 13, 2007, the Company and its subsidiary, Tralliance Corporation
      (“Tralliance”) entered into an Assignment, Conveyance and Bill of Sale Agreement
      with Search.Travel, LLC (“Search.Travel”). Pursuant to the Agreement, Tralliance
      sold all of its rights relating to the “www.search.travel” domain name and
      website related assets to Search.Travel for a purchase price of $380,000 paid
      in
      cash. Search.Travel is controlled by the Company’s Chairman and Chief Executive
      Officer, Michael Egan. The purchase price was determined by the Board of
      Directors taking into account the valuation given to the assets by an
      independent investment banking firm.





**DESCRIPTION
      OF BUSINESS - CONTINUING OPERATIONS**





**OUR
      INTERNET SERVICES BUSINESS**





Tralliance
      was incorporated in 2002 to develop products and services to enhance online
      commerce between consumers and the travel and tourism industries, including
      administration of the “.travel” top-level domain. In February 2003, theglobe
      entered into a Loan and Purchase Option Agreement, as amended, with Tralliance
      in which theglobe agreed to fund, in the form of a loan, at the discretion
      of
      theglobe, Tralliance’s operating expenses and obtained the option to acquire all
      of the outstanding capital stock of Tralliance. On May 5, 2005, the Internet
      Corporation for Assigned Names and Numbers (“ICANN”) and Tralliance entered into
      a contract whereby Tralliance was designated as the exclusive registry for
      the
“.travel” top-level domain for an initial period of ten years. Renewal of the
      ICANN contract beyond the initial ten year term is conditioned upon the
      negotiation of renewal terms reasonably acceptable to ICANN. Additionally,
      we
      have agreed to engage in good faith negotiations at regular intervals throughout
      the term of our contract (at least once every three years) regarding possible
      changes to the provisions of the contract, including changes in the fees and
      payments that we are required to make to ICANN. In the event that we materially
      and fundamentally breach the contract and fail to cure such breach within thirty
      days of notice, ICANN has the right to immediately terminate our contract.
      Effective May 9, 2005, theglobe exercised its option to purchase
      Tralliance.





The
      establishment of the “.travel” top-level domain enables businesses,
      organizations, governmental agencies and other enterprises that operate within
      the travel and tourism industry to establish a unique Internet domain name
      from
      which to communicate and conduct commerce. An Internet domain name is made
      up of
      a top-level domain and a second-level domain. For example, in the domain name
      “companyX.travel”, “companyX” is the second-level domain and “.travel” is the
      top-level domain. As the registry for the “.travel” top-level domain, Tralliance
      is responsible for maintaining the master database of all second-level “.travel”
domain names and their corresponding Internet Protocol (“IP”)
      addresses.





To
      facilitate the “.travel” domain name registration process, Tralliance has
      entered into contracts with a number of registrars. These registrars act as
      intermediaries between Tralliance and customers (referred to as registrants)
      seeking to register “.travel” domain names. The registrars handle the billing
      and collection of registration fees, customer service and technical management
      of the registration database. Registrants can register “.travel” domain names
      for terms of one year (minimum) up to 10 years (maximum). For standard name
      registration transactions (which exclude name registrations under our newly
      established bulk registration program, which is discussed below), registrars
      retain a portion of the registration fee collected by them as their compensation
      and remit the remainder, presently $80 per domain name per year, of the
      registration fee to Tralliance.




3





In
      order
      to register a “.travel” domain name, a registrant must first be verified as
      being eligible (“authenticated”) by virtue of being a valid participant in the
      travel industry. Additionally, eligibility data is required to be updated and
      reviewed annually, subsequent to initial registration. Once authenticated,
      a
      registrant is only permitted to register “.travel” domain names that are
      associated with the registrant’s business or organization. Tralliance has
      entered into contracts with a number of travel associations and other
      independent organizations (“authentication providers”) whereby, in consideration
      for the payment of fixed and/or variable fees, all required authentication
      procedures are performed by such authentication providers. Tralliance has also
      outsourced various other registry operations, database maintenance and policy
      formulation functions to certain other independent businesses or organizations
      in consideration for the payment of certain fixed and/or variable
      fees.





In
      launching the “.travel” top-level domain registry, Tralliance adopted a phased
      approach consisting of three distinct stages. During the third quarter of 2005,
      Tralliance implemented phase one, which consisted of a pre-authentication of
      a
      limited group of potential registrants. During the fourth quarter of 2005,
      Tralliance implemented phase two, which involved the registration of the limited
      group of registrants who had been pre-authenticated. It was during this limited
      registration phase that Tralliance initially began collecting registration
      fees
      from its “.travel” registrars. Finally, in January 2006, Tralliance commenced
      the final phase of its launch, which culminated in live “.travel” registry
      operations.





On
      August
      15, 2006, the Company introduced its online search engine dedicated to the
      travel industry, www.search.travel .
      The
      search engine was developed by Tralliance to benefit both consumers at large
      and
“.travel” domain name registrants, as the search engine delivers qualified
      search results from the entire World Wide Web, giving priority to destinations
      and businesses that are authenticated “.travel” registrants. During August 2006,
      the Company launched a national television campaign to promote the new search
      engine and website and began to market the www.search.travel website
      to potential advertisers interested in targeting the travel consumer. Due to
      various technical and operational website problems, revenue generated from
      the
      sale of advertising sponsorships on “www.search.travel” in 2006 and 2007 was
      significantly less than initial expectations. Since the costs of remediating
      the
      website problems was deemed to be substantial and based upon the Company’s lack
      of cash resources, the Company was unable to continue to fund the operations
      of
      www.search.travel. As discussed earlier, on December 13, 2007, all of the
      Company’s rights relating to the www.search.travel domain name and website and
      related assets were sold to Search.Travel LLC, a company controlled by the
      Company’s Chairman and Chief Executive Officer, Michael Egan, for a purchase
      price of $380,000 paid in cash.





During
      the fourth quarter of 2007, Tralliance announced the development of a bulk
      purchase program designed to rapidly accelerate “.travel” name registration
      growth and to promote wide-spread use of the “.travel” domain name. The bulk
      purchase program allows eligible travel businesses that commit to a minimum
      purchase of 25,000 “.travel” domain names within one year to purchase these
      names at significantly discounted rates and on favorable payment terms in
      comparison with standard name registration pricing and terms.





In
      connection with the establishment of its bulk purchase program, in October
      2007,
      Tralliance entered into an additional registry operator agreement (the “New
      Agreement”) with its existing registry operator (the “Registry Operator”). The
      New Agreement was effective on October 1, 2007 and has an initial term of three
      (3) years excluding optional renewal periods. The Registry Operator has provided
      and continues to provide registry operation services to Tralliance since the
      start-up of its “.travel” internet services business under a predecessor Master
      Services Agreement dated as of October 11, 2005. Under the New Agreement, the
      Company paid the Registry Operator a start-up fee of $37,500 and a registration
      minimum fee of $225,000 in November 2007, and is also obligated to pay an
      additional registration minimum fee of $112,500 in October 2008. The
      registration minimum fees represent pre-payments of registry operator fees
      related to Tralliance’s planned bulk purchase of “.travel” domain names. In the
      event that certain registration minimum levels are exceeded, Tralliance is
      also
      obligated to pay additional registry operator fees on a “per transaction” basis.
      Additionally, the Registry Operator is also entitled to receive a certain
      percentage of future revenue related to “.travel” domain names purchased under
      the New Agreement. Further, under the New Agreement, Tralliance committed to
      ensuring that a pre-determined number of “.travel” websites are launched by no
      later than September 30, 2008.





On
      December 20, 2007, Tralliance entered into a Bulk Registration Co-Marketing
      Agreement (the “Co-Marketing Agreement”) with Labigroup Holdings, LLC
      (“Labigroup”), under Tralliance’s bulk purchase program. Labigroup is a private
      entity controlled by the Company’s Chairman and our remaining directors own a
      minority interest in Labigroup. Under the Co-Marketing Agreement, Labigroup
      committed to purchase a predetermined minimum number of “.travel” domain names
      on a bulk basis from an accredited “.travel” registrar of its own choosing and
      to establish a predetermined minimum number of related “.travel” websites. As
      consideration for the “.travel” domain names to be purchased under the
      Co-Marketing Agreement, Labigroup agreed to pay certain fixed fees and make
      certain other payments including, but not limited to, an ongoing royalty
      calculated as a percentage share of its net revenue, as defined in the
      Co-Marketing Agreement (the “Labigroup Royalties”), to Tralliance. The
      Co-Marketing Agreement has an initial term which expires September 30, 2010
      after which it may be renewed for successive periods of two and three years,
      respectively. During the period from December 20, 2007 through December 31,
      2007, Labigroup registered 164,708 “.travel” domain names under the Co-Marketing
      Agreement. As of December 31, 2007, Labigroup has paid $262,500 and is obligated
      to pay an additional $412,050 in fees and costs to Tralliance under the
      Co-Marketing Agreement. Such amounts, which are equal to the amount of
      incremental fees and costs incurred by Tralliance in registering these bulk
      purchase names, have been treated as a reimbursement of these incremental fees
      and costs in the Company’s financial statements. The Company plans to recognize
      revenue related to this Co-Marketing Agreement only to the extent that Labigroup
      Royalties are earned. No such revenue has been recorded as of December 31,
      2007.




4





All
      significant Tralliance operations and assets are based in the United States
      and
      all registration transactions are denominated in U.S. dollars. Although
      Tralliance markets “.travel” name registrations on a world-wide basis, net
      revenue generated from customers domiciled in any single international country
      have not been significant to date.





As
      of
      March 15, 2008, the total number of “.travel” domain names registered was
      199,040, of which 168,114 or 85% were registered under our bulk purchase
      program.





**DESCRIPTION
      OF BUSINESS—DISCONTINUED OPERATIONS**





**COMPUTER
      GAMES BUSINESS**





In
      February 2000, the Company entered the computer games business by acquiring
      Computer Games Magazine, a print publication for personal computer (“PC”)
      gamers; CGOnline, the online counterpart to Computer Games magazine; and Chips
      & Bits, an e-commerce games distribution business. Historically, content of
      Computer Games Magazine and CGOnline focused primarily on the PC games market
      niche.





During
      2004, the Company developed and began to implement plans to expand its business
      beyond games and into other areas of the entertainment industry. In Spring
      2004,
      a new magazine, Now Playing began to be delivered within Computer Games Magazine
      and in March 2005, Now Playing began to be distributed as a separate
      publication. Now Playing covered movies, DVD’s, television, music, games, comics
      and anime, and was designed to fulfill the wider pop culture interests of
      readers and to attract a more diverse group of advertisers: autos, television,
      telecommunications and film to name a few. During 2005, the Now Playing online
      website ( www.nowplaying.com ), the
      online counterpart for Now Playing magazine, was implemented and costs were
      also
      incurred to develop a new corporate website ( www.theglobe.com) ,
      also
      targeted at the broader entertainment marketplace.





In
      August
      2005, based upon a re-evaluation of the capital requirements and risks/rewards
      related to completing the transition to a broader-based entertainment business,
      the Company decided to abort its diversification efforts and refocus its
      strategy back to operating and improving its traditional games-based businesses.
      During the remainder of 2005, the Company implemented a number of revenue
      enhancement programs, including establishing a used game auction website
      ( www.gameswapzone.com ),
      introducing a digital version of its Computer Games Magazine, and entering
      into
      several marketing partnership affiliate programs. Additionally, during the
      latter part of 2005, the Company completed the implementation of a number of
      cost-reduction programs related to facility consolidations, headcount reductions
      and decreases in magazine publishing and sales costs. In January 2006, the
      Company completed the sale of all assets related to Now Playing Magazine and
      the
      Now Playing Online website for approximately $130,000.





The
      premiere issue of a new quarterly print publication, Massive Magazine (renamed
      MMOGames Magazine in 2007), was released in September 2006. The new magazine
      was
      dedicated solely to “massively multiplayer online” games (“MMO” games) and
      included features on the culture of MMO games, focusing on players, guilds
      and
      communities. The editorial staff of Computer Games Magazine produced the content
      for the new magazine. The new magazine was also accompanied by a complementary
      website ( www.mmogamesmag.com ).





In
      March
      2007, management and the Board of Directors of the Company made the decision
      to
      cease all activities related to its Computer Games businesses, including
      discontinuing the operations of its magazine publications, games distribution
      business and related websites. The Company’s decision to shutdown its Computer
      Games businesses was based primarily on the historical losses sustained by
      these
      businesses during the recent past and management’s expectations of continued
      future losses. As of December 31, 2007, all significant elements of its computer
      games business shutdown plan have been completed by the Company, except for
      the
      collection and payment of remaining outstanding accounts receivables and
      payables. ****





**VOIP
      TELEPHONY BUSINESS**





During
      the third quarter of 2003, the Company launched its first suite of consumer
      and
      business level VoIP services. The Company launched its browser-based VoIP
      product during the first quarter of 2004. These services allowed customers
      to
      communicate using VoIP technology for dramatically reduced pricing compared
      to
      traditional telephony networks. The services also offered traditional telephony
      features such as voicemail, caller ID, call forwarding, and call waiting for
      no
      additional cost to the customer, as well as incremental services that were
      not
      then supported by the public switched telephone network ("PSTN") like the
      ability to use numbers remotely and voicemail to email services. In the fourth
      quarter of 2004, the Company announced an "instant messenger" or "IM" related
      application which enabled users to chat via voice or text across multiple
      platforms using their preferred instant messenger service. During the second
      quarter of 2005, the Company released a number of new VoIP products and features
      which allowed users to communicate via mobile phones, traditional land line
      phones and/or computers. From the initial launch of its VoIP services in 2003
      through 2005, the Company continued to expand its VoIP network, which was
      comprised of switching hardware and software, servers, billing and inventory
      systems, and telecommunication carrier contractual relationships. Throughout
      this period, the capacity of our VoIP network greatly exceeded
      usage.




5





The
      Company’s retail VoIP service plans had included both “peer-to-peer” plans, for
      which subscribers were able to place calls free of charge over the Internet
      to
      other subscribers’ Internet connections, and “paid” plans which involved
      interconnection with the PSTN and for which subscribers were charged certain
      fixed and/or variable service charges.





During
      2003 through 2005, the Company attempted to market and distribute its VoIP
      retail products through various direct and indirect sales channels including
      Internet advertising, structured customer referral programs, network marketing,
      television infomercials and partnerships with third party national retailers.
      None of the marketing and sales programs implemented during these years were
      successful in generating a significant number of “paid” plan customers or
      revenue. The Company’s marketing efforts during this period of time achieved
      only limited success in developing a “peer-to-peer” subscriber base of free
      service plan users.





During
      2006, the Company re-focused its efforts on VoIP product development. During
      the
      first quarter of 2006, the Company developed a plan to reconfigure, phase out
      and eliminate certain components of its existing VoIP network. During the second
      quarter of 2006, the Company discontinued offering service to its small existing
      “paid” plan customer base and completed the implementation of its plan to
      significantly reduce the excess capacity and operating costs of its VoIP
      network.





In
      March
      2007, management and the Board of Directors of the Company decided to
      discontinue the operating, research and development activities of its VoIP
      telephony services business and terminate all of the remaining employees of
      the
      business. On April 2, 2007, theglobe agreed to transfer to Michael Egan all
      of
      its VoIP intellectual property in consideration for his agreement to provide
      certain security and credit enhancements in connection with the MySpace
      litigation Settlement Agreement (See Note 13, “Litigation,” in the accompanying
      Notes to Consolidated Financial Statements for further discussion). **** The
      Company had previously written off the value of the VoIP intellectual property
      as a result of its evaluation of the VoIP telephony services business’
long-lived assets in connection with the preparation of the Company’s 2004
      year-end consolidated financial statements. The Company’s decision to
      discontinue the operations of its VoIP telephony services business was based
      primarily on the historical losses sustained by the business during the past
      several years, management’s expectations of continued losses for the foreseeable
      future and estimates of the amount of capital required to attempt to
      successfully monetize its business. As of December 31, 2007, all significant
      elements of its VoIP telephony services business shutdown plan have been
      completed by the Company, except for the resolution of certain vendor disputes
      and the payment of remaining outstanding vendor payables.





**MARKETING
      SERVICES BUSINESS**





As
      previously discussed, based upon the Company’s sale of substantially all of the
      net assets and the business of its SendTec subsidiary which was completed on
      October 31, 2005, the results of operations of SendTec have been reported
      separately as “Discontinued Operations” in the accompanying consolidated
      statement of operations for the year ended December 31, 2005.





On
      September 1, 2004, the Company acquired SendTec, a direct response marketing
      services and technology company. SendTec provided clients a complete offering
      of
      direct marketing products and services to help their clients market their
      products both on the Internet (“online”) and through traditional media channels
      such as television, radio and print advertising (“offline”). SendTec was
      organized into two primary product line divisions: the DirectNet Advertising
      Division, which provided digital marketing services; and the Creative South
      Division, which provided creative production and media buying services.
      Additionally, its proprietary iFactz technology provided software tracking
      solutions that benefited both the DirectNet Advertising and Creative South
      businesses.





·
            DirectNet
                Advertising (“DNA”) - DNA delivered results based interactive marketing
                programs for advertisers through a network of online distribution
                partners
                including websites, search engines and email publishers. SendTec’s
                proprietary software technology was used to track, optimize and report
                results of marketing campaigns to advertising clients and distribution
                partners. Pricing options for DNA’s services included cost-per-action
                (“CPA”), cost per-click (“CPC”) and cost-per-thousand impressions (“CPM”),
                with most payments resulting from CPA
                agreements.





·
            Creative
                South - Creative South provided online and offline agency marketing
                services including creative development, campaign management, creative
                production, post production, media planning and media buying services.
                Most service provided by Creative South were priced on a fee-per-project
                basis, where the client paid an agreed upon fixed fee for a designated
                scope of work. Creative South also received monthly retainer fees
                from
                clients for service to such clients as their Agency of
                Record.





·
            iFactz
                - iFactz was SendTec’s Application Service Provider (“ASP”) technology
                that tracked and reported on a real time basis the online responses
                generated from offline direct response advertising, such as television,
                radio, print advertising and direct mail. iFactz’ Intelligent Sourcing
                (TM) was a patent-pending media technology that informed the user
                where
                online customers come from, and what corresponding activity they
                produced
                on the user’s website. The iFactz patent application was filed in November
                2001. iFactz was licensed to clients based on a monthly fixed license
                fee,
                with license terms ranging from three months to one
                year.




6




**COMPETITION**





**Internet
      Services Business**





We
      face
      competition from a number of businesses and organizations that have longer
      operating histories, greater name recognition and more advanced and complete
      technical systems. Additionally, our competitors are larger enterprises that
      have greater financial, technical and marketing resources than we
      have.





While
      we
      do not face direct competition for the registry of “.travel” domain names
      because of the exclusive nature of our ICANN contract, we compete with other
      companies that maintain the registries for different domain names, including
      Verisign, Inc., which manages the “.com” and “.net” registries; Afilias Limited,
      which manages the “.info” registry; and a number of country-specific domain name
      registries (such as “.uk” for domain names in the United Kingdom). In seeking
      the renewal of our existing contract or obtaining new ICANN contracts, we expect
      to face competition from multiple businesses.





**INTELLECTUAL
      PROPERTY AND PROPRIETARY RIGHTS**





We
      regard
      certain elements of our websites and underlying technology as proprietary.
      We
      pursue the registration of our trademarks in the United States and
      internationally. We attempt to protect these assets by relying on intellectual
      property laws. We also generally enter into confidentiality agreements with
      our
      employees and consultants and in connection with various other agreements with
      third parties. We also seek to control access to and distribution of our
      technology, documentation and other proprietary information. Despite these
      precautions, it may be possible for a third party to copy or otherwise obtain
      and use our proprietary information without authorization.





Effective
      trademark, service mark, and trade secret protection may not be available in
      every country in which our services are made available through the Internet.
      Policing unauthorized use of our proprietary information is difficult. Existing
      or future trademarks or service marks applied for or registered by other parties
      and which are similar to ours may prevent us from expanding the use of our
      trademarks and service marks into other areas. In the fourth quarter of 2005,
      we
      were sued by Sprint Communications Company, L.P. (“Sprint”) for alleged
      unauthorized use of “inventions” described and claimed in seven patents held by
      Sprint. In August 2006, we entered into a settlement agreement with Sprint
      which
      resolved the pending patent infringement lawsuit.







**GOVERNMENT
      REGULATION AND LEGAL UNCERTAINTIES**





**In
      General**





We
      are
      subject to laws and regulations that are applicable to various Internet
      activities. There are an increasing number of federal, state, local and foreign
      laws and regulations pertaining to the Internet. In addition, a number of
      federal, state, local and foreign legislative and regulatory proposals are
      under
      consideration. Laws and regulations have been and will likely continue to be
      adopted with respect to the Internet relating to, among other things, liability
      for information retrieved from or transmitted over the Internet, online content
      regulation, user privacy, data protection, pricing, content, copyrights,
      distribution, email solicitation, “spam”, electronic contracts and other
      communications, consumer protection, the provision of online payment services,
      broadband residential Internet access, and the characteristics and quality
      of
      products and services. On June 1, 2006, we were sued by MySpace, Inc.
      (“MySpace”) for alleged violations of the CAN-SPAM Act, the Lanham Act and the
      California Business & Professions Code § 17529.5 (the “California Act”), as
      well as trademark infringement, false advertising, breach of contract, breach
      of
      the covenant of good faith and fair dealing, and unfair competition. On February
      28, 2007, the United States District Court for the Central District of
      California entered an order granting in part MySpace’s motion for summary
      judgment, finding that we were liable for violation of the CAN-SPAM Act and
      the
      California Business & Professions Code, and for breach of contract. **** On March
      15, 2007, the Company entered into a Settlement Agreement with MySpace whereby,
      among other things, the Company agreed to pay MySpace approximately $2,550,000
      on or before April 5, 2007 in exchange for a mutual release of all claims
      against one another, including any claims against the Company’s directors and
      officers. **** On April
      18, 2007, theglobe paid MySpace $2,550,000 in cash in settlement of the claims,
      MySpace and theglobe filed a consent judgment and stipulated permanent
      injunction with the court on April 19, 2007, which among other things, dismissed
      all claims alleged in the lawsuit with prejudice.




Changes
      in tax laws relating to electronic commerce could materially affect our
      business, prospects and financial condition. One or more states or foreign
      countries may seek to impose sales or other tax collection obligations on
      out-of-jurisdiction companies that engage in electronic commerce. A successful
      assertion by one or more states or foreign countries that we should collect
      sales or other taxes on services could result in substantial tax liabilities
      for
      past sales, decrease our ability to compete with other entities involved in
      the
      industries in which we participate, and otherwise harm our
      business.





Currently,
      decisions of the U.S. Supreme Court restrict the imposition of obligations
      to
      collect state and local sales and use taxes with respect to electronic commerce.
      However, a number of states, as well as the U.S. Congress, have been considering
      various initiatives that could limit or supersede the Supreme Court's position
      regarding sales and use taxes on electronic commerce. If any of these
      initiatives addressed the Supreme Court's constitutional concerns and resulted
      in a reversal of its current position, we could be required to collect sales
      and
      use taxes. The imposition by state and local governments of various taxes upon
      electronic commerce could create administrative burdens for us and could
      adversely affect our business operations, and ultimately our financial
      condition, operating results and future prospects.




7





Regardless
      of the type of state tax imposed, the threshold issue involving state taxation
      of any transaction is always whether sufficient nexus, or contact, exists
      between the taxing entity and the taxpayer or the transaction to which the
      tax
      is being applied. The concept of nexus is constantly changing and no bright
      line
      exists that would sufficiently alert a business as to whether it is subject
      to
      tax in a specific jurisdiction. All states which have attempted to tax Internet
      access or online services have done so by asserting that the sale of such
      information services, data processing services or other type of transaction
      is
      subject to tax in that particular state.





A
      handful
      of states impose taxes on computer services, data processing services,
      information services and other similar types of services. Some of these states
      have asserted that Internet access and/or online information services are
      subject to these taxes.





Moreover,
      the applicability to the Internet of existing laws governing issues such as
      intellectual property ownership and infringement, copyright, trademark, trade
      secret, obscenity, libel, employment and personal privacy is uncertain and
      developing. It is not clear how existing laws governing issues such as property
      ownership, sales and other taxes, libel, and personal privacy apply to the
      Internet and electronic commerce. Any new legislation or regulation, or the
      application or interpretation of existing laws or regulations, may decrease
      the
      growth in the use of the Internet, may impose additional burdens on electronic
      commerce or may alter how we do business.





**Certain
      Other Regulation Affecting the Internet Generally**





New
      laws
      and regulations affecting the Internet generally may increase our costs of
      compliance and doing business, decrease the growth in Internet use, decrease
      the
      demand for our services or otherwise have a material adverse effect on our
      business.





Today,
      there are still relatively few laws specifically directed towards online
      services. However, due to the increasing popularity and use of the Internet
      and
      online services, many laws and regulations relating to the Internet are being
      debated at all levels of governments around the world and it is possible that
      such laws and regulations will be adopted. It is not clear how existing laws
      governing issues such as property ownership, copyrights and other intellectual
      property issues, taxation, libel and defamation, obscenity, and personal privacy
      apply to online businesses. The vast majority of these laws were adopted prior
      to the advent of the Internet and related technologies and, as a result, do
      not
      contemplate or address the unique issues of the Internet and related
      technologies. In the United States, Congress has adopted legislation that
      regulates certain aspects of the Internet, including online content, user
      privacy and taxation. In addition, Congress and other federal entities are
      considering other legislative and regulatory proposals that would further
      regulate the Internet.





Various
      states have adopted and are considering Internet-related legislation. Increased
      U.S. regulation of the Internet, including Internet tracking technologies,
      may
      slow its growth, particularly if other governments follow suit, which may
      negatively impact the cost of doing business over the Internet and materially
      adversely affect our business, financial condition, results of operations and
      future prospects. The Company has no way of knowing whether legislation will
      pass or what form it might take. Domain names have been the subject of
      significant trademark litigation in the United States and internationally.
      The
      current system for registering, allocating and managing domain names has been
      the subject of litigation and may be altered in the future. The regulation
      of
      domain names in the United States and in foreign countries may change.
      Regulatory bodies are anticipated to establish additional top-level domains
      and
      may appoint additional domain name registrars or modify the requirements for
      holding domain names, any or all of which may dilute the strength of our names.
      We may not acquire or maintain our domain names in all of the countries in
      which
      our websites may be accessed, or for any or all of the top-level domain names
      that may be introduced.





**International
      Regulation of Internet Services**





Internationally,
      the European Union has enacted several directives relating to the Internet.
      The
      European Union has, for example, adopted a directive that imposes restrictions
      on the collection and use of personal data. Under the directive, citizens of
      the
      European Union are guaranteed rights to access their data, rights to know where
      the data originated, rights to have inaccurate data rectified, rights to
      recourse in the event of unlawful processing and rights to withhold permission
      to use their data for direct marketing. The directive could, among other things,
      affect U.S. companies that collect or transmit information over the Internet
      from individuals in European Union member states, and will impose restrictions
      that are more stringent than current Internet privacy standards in the U.S.
      In
      particular, companies with offices located in European Union countries will
      not
      be allowed to send personal information to countries that do not maintain
      adequate standards of privacy. Compliance with these laws is both necessary
      and
      difficult. Failure to comply could subject us to lawsuits, fines, criminal
      penalties, statutory damages, adverse publicity, and other losses that could
      harm our business. Changes to existing laws or the passage of new laws intended
      to address these privacy and data protection and retention issues could directly
      affect the way we do business or could create uncertainty on the Internet.
      This
      could reduce demand for our services, increase the cost of doing business as
      a
      result of litigation costs or increased service or delivery costs, or otherwise
      harm our business.




8





Other
      laws that reference the Internet, such as the European Union's Directive on
      Distance Selling and Electronic Commerce has begun to be interpreted by the
      courts and implemented by the European Union member states, but their
      applicability and scope remain somewhat uncertain. Regulatory agencies or courts
      may claim or hold that we or our users are either subject to licensure or
      prohibited from conducting our business in their jurisdiction, either with
      respect to our services in general, or with respect to certain categories or
      items of our services. As we expand our international activities, we become
      obligated to comply with the laws of the countries in which we operate. Laws
      regulating Internet companies outside of the U.S. may be less favorable than
      those in the U.S., giving greater rights to consumers, content owners and users.
      Compliance may be more costly or may require us to change our business practices
      or restrict our service offerings relative to those in the U.S. Our failure
      to
      comply with foreign laws could subject us to penalties ranging from criminal
      prosecution to bans on our services.





**EMPLOYEES**





As
      of
      March 20, 2008, we had approximately 15 active full-time employees. Our future
      success depends, in part, on our ability to continue to attract, retain and
      motivate highly qualified technical and management personnel. Competition for
      these persons is intense. From time to time, we also employ independent
      contractors to support our operations, marketing, sales and support and
      administrative organizations. Our employees are not represented by any
      collective bargaining unit and we have never experienced a work stoppage. We
      believe that our relations with our employees are good.





**ITEM
      1A. RISK FACTORS**





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





**RISKS
      RELATING TO OUR BUSINESS GENERALLY**





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





We
      have
      received a report from our independent accountants, relating to our December
      31,
      2007 audited financial statements containing an explanatory paragraph stating
      that our recurring losses from operations and our accumulated deficit raise
      substantial doubt about our ability to continue as a going concern. For the
      reasons described below, Company management does not believe that cash on hand
      and cash flow generated internally by the Company will be adequate to fund
      the
      operation of its businesses beyond a short period of time. These reasons raise
      significant doubt about the Company’s ability to continue as a going
      concern.





During
      the year ended December 31, 2007, the Company was able to continue operating
      as
      a going concern due principally to funding of $1.25 million received from the
      sale of secured convertible demand promissory notes to an entity controlled
      by
      Michael Egan, its Chairman and Chief Executive Officer. Also, in December 2007,
      additional funding of $380 thousand was provided from the sale of all of the
      Company’s rights related to its www.search.travel domain name and website to an
      entity also controlled by Mr. Egan. At December 31, 2007, the Company had a
      net
      working capital deficit of approximately $9.4 million, inclusive of a cash
      and
      cash equivalents balance of approximately $631 thousand. Such working capital
      deficit included an aggregate of $4.65 million in secured convertible demand
      debt and related accrued interest of approximately $955 thousand due to entities
      controlled by Mr. Egan (See Note 8, “Debt” and Note 14, “Related Party
      Transactions” in the accompanying Notes to Consolidated Financial Statements for
      further details). Additionally, such working capital deficit included
      approximately $1.9 million of net liabilities of discontinued operations, with
      a
      significant portion of such liabilities related to charges which have been
      disputed by the Company.





Notwithstanding
      previous cost reduction actions taken by the Company and its decision to
      shutdown its unprofitable computer games and VoIP telephony services businesses
      in March 2007 (see Note 3, “Discontinued Operations” in the accompanying Notes
      to Consolidated Financial Statements), the Company continues to incur
      substantial consolidated net losses, although reduced in comparison with prior
      periods, and management believes that the Company will continue to be
      unprofitable in the foreseeable future. Based upon the Company’s current
      financial condition, as discussed above, and without the infusion of additional
      capital, management does not believe that the Company will be able to fund
      its
      operations beyond the end of the second quarter of 2008.





As
      more
      fully discussed in Note 16, “Subsequent Events” in the accompanying Notes to the
      Consolidated Financial Statements, on February 1, 2008, the Company announced
      that it had entered into a letter of intent to sell substantially all of the
      business and net assets of its Tralliance Corporation subsidiary and to issue
      approximately 269 million shares of its common stock to an entity controlled
      by
      Mr. Egan (the “Proposed Tralliance Transaction”). In the event that this
      Proposed Tralliance Transaction is consummated, all of the Company’s remaining
      secured and unsecured debt owed to entities controlled by Mr. Egan (which was
      approximately $5.6 million and $400 thousand at December 31, 2007, respectively)
      will be exchanged or cancelled. Additionally, the consummation of the Proposed
      Tralliance Transaction would also result in significant reductions in the
      Company’s cost structure, based upon the elimination of Tralliance’s operating
      expenses. Although substantially all of Tralliance’s revenue would also be
      eliminated, approximately 10% of Tralliance’s future net revenue through May 5,
      2015 would essentially be retained through the contemplated net revenue earn-out
      provisions of the Proposed Tralliance Transaction. Additionally, the
      consummation of the Proposed Tralliance Transaction would increase Mr. Egan’s
      ownership in the Company to approximately 84% (assuming exercise of all
      outstanding stock options and warrants) and would significantly dilute all
      other
      existing shareholders. The foregoing description is preliminary in nature and
      there may be significant changes between such preliminary terms and the terms
      of
      any final definitive purchase agreement.




9





Management
      expects that the consummation of the Proposed Tralliance Transaction will
      significantly reduce the amount of net losses currently being sustained by
      the
      Company. However, management does not believe that the consummation of the
      Proposed Tralliance Transaction will, in itself, allow the Company to become
      profitable and generate operating cash flows sufficient to fund its operations
      and pay its existing current liabilities (including those liabilities related
      to
      its discontinued operations) in the foreseeable future. Accordingly, assuming
      that the Proposed Tralliance Transaction is consummated, management believes
      that additional capital infusions (although reduced in comparison with the
      amounts of capital required during the Company’s recent past) will continue to
      be needed in order for the Company to continue to operate as a going concern.





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





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





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





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





Since
      our
      inception, we have incurred net losses each year and we expect that we will
      continue to incur net losses for the foreseeable future. We had net losses
      of
      approximately $6.2 million, $17.0 million and $11.5 million for the years ended
      December 31, 2007, 2006 and 2005, respectively. The principal causes of our
      losses are likely to continue to be:





·
            costs
                resulting from the operation of our
                business;





·
            failure
                to generate sufficient revenue; and




·
            selling,
                general and administrative
                expenses.





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





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





Our
      balance sheet at December 31, 2007 includes certain estimated liabilities
      related to disputed vendor charges incurred primarily as the result of the
      failure and subsequent shutdown of our discontinued VoIP telephony services
      business. The legal and administrative costs of resolving these disputed charges
      may be expensive and divert management’s attention from day-to-day operations.
      Although we are seeking to resolve and settle these disputed charges for amounts
      substantially less than recorded amounts, there can be no assurances that we
      will be successful in this regard. An adverse outcome in any of these matters
      could materially and adversely affect our financial position, utilize a
      significant portion of our cash resources and adversely affect our ability
      to
      continue to operate as a going concern. See Note 3, “Discontinued Operations” in
      the Notes to Consolidated Financial Statements for future details.




10




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





As
      of
      December 31, 2007, we had net operating loss carryforwards which may be
      potentially available for U.S. tax purposes of approximately **$** 167
      million. These carryforwards expire through 2026. The Tax Reform Act of 1986
      imposes substantial restrictions on the utilization of net operating losses
      and
      tax credits in the event of an "ownership change" of a corporation. Due to
      various significant changes in our ownership interests, as defined in the
      Internal Revenue Code of 1986, as amended, we have substantially limited the
      availability of our net operating loss carryforwards. There can be no assurance
      that we will be able to utilize any net operating loss carryforwards in the
      future. These net operating carryforwards may be further adversely impacted
      if
      the Proposed Tralliance Transaction is consummated.





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





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





·
            inadequate
                network infrastructure;





·
            security
                and authentication concerns;





·
            general
                economic and business downturns;
                and





·
            catastrophic
                events, including war and
                terrorism.




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








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





·
            increased
                government regulation;





·
            potential
                governmental taxation of such services;
                and





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





**WE
      MAY FACE INCREASED GOVERNMENT REGULATION, TAXATION AND LEGAL UNCERTAINTIES
      IN
      OUR INDUSTRY, BOTH DOMESTICALLY AND INTERNATIONALLY, WHICH COULD NEGATIVELY
      IMPACT OUR FINANCIAL CONDITION AND/OR OUR RESULTS OF
      OPERATIONS.**





There
      are
      an increasing number of federal, state, local and foreign laws and regulations
      pertaining to the Internet. In addition, a number of federal, state, local
      and
      foreign legislative and regulatory proposals are under consideration. Laws
      and
      regulations have been and will likely continue to be adopted with respect to
      the
      Internet relating to, among other things, liability for information retrieved
      from or transmitted over the Internet, online content regulation, user privacy,
      data protection, pricing, content, copyrights, distribution, electronic
      contracts and other communications, consumer protection, the provision of online
      payment services, broadband residential Internet access and the characteristics
      and quality of products and services.





Changes
      in tax laws relating to electronic commerce could materially affect our
      business, prospects and financial condition. One or more states or foreign
      countries may seek to impose sales or other tax collection obligations on
      out-of-jurisdiction companies that engage in electronic commerce. A successful
      assertion by one or more states or foreign countries that we should collect
      sales or other taxes on services could result in substantial tax liabilities
      for
      past sales, decrease our ability to compete with other entities involved in
      the
      industries in which we participate, and otherwise harm our
      business.





Moreover,
      the applicability to the Internet of existing laws governing issues such as
      intellectual property ownership and infringement, copyright, trademark, trade
      secret, obscenity, libel, employment and personal privacy is uncertain and
      developing. It is not clear how existing laws governing issues such as property
      ownership, sales and other taxes, libel, and personal privacy apply to the
      Internet and electronic commerce. Any new legislation or regulation, or the
      application or interpretation of existing laws or regulations, may decrease
      the
      growth in the use of the Internet, may impose additional burdens on electronic
      commerce or may alter how we do business. This could decrease the demand for
      our
      existing or proposed services, increase our cost of doing business, increase
      the
      costs of products sold through the Internet or otherwise have a material adverse
      effect on our business, plans, prospects, results of operations and financial
      condition.




11




**WE
      RELY ON INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS.**





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




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





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





**OUR
      QUARTERLY OPERATING RESULTS FLUCTUATE.**





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





·
            the
                outcome and costs related to defending and settling outstanding claims
                and
                disputes;





·
            changes
                in the number of marketing or technical
                employees;





·
            the
                level of traffic on our websites;





·
            the
                overall demand for Internet travel
                services;





·
            the
                addition or loss of “.travel” domain name registrants**;**




·
            overall
                usage and acceptance of the
                Internet;




·
            costs
                relating to the implementation or cessation of marketing plans for
                our
                business;





·
            other
                costs relating to the maintenance of our
                operations;





·
            the
                restructuring of our business; including potential sales of businesses
                or
                assets




·
            failure
                to generate significant revenues and profit margins from new and/or
                existing products and services; and





·
            competition
                from others providing services similar to
                ours.





12




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





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





·
            generate
                and maintain adequate levels of “.travel” domain name
                registrations;





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





·
            identify,
                attract, retain and motivate qualified
                personnel.





**OUR
      MANAGEMENT TEAM IS INEXPERIENCED IN THE MANAGEMENT OF A LARGE OPERATING
      COMPANY.**





Only
      our
      Chairman has had experience managing a large operating company. Accordingly,
      we
      cannot assure you that:





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





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





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





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





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





**WE
      DEPEND ON QUALIFIED MANAGERIAL, TECHNICAL AND MARKETING
      PERSONNEL.**





Our
      future success also depends on our continuing ability to attract, retain and
      motivate qualified managerial, technical and marketing personnel necessary
      to
      operate our businesses. We may need to give bonuses and other incentives to
      certain employees to keep them, which can be costly to us. The loss of the
      services of members of our management team or other key personnel could harm
      our
      business. We do not maintain key person life insurance on any of our executive
      officers and do not intend to purchase any in the future.





Our
      deteriorating financial performance creates uncertainty that may result in
      departures of key employees and our inability to attract suitable replacements
      and/or additional managerial personnel in the future. Wages for managerial,
      technical, and marketing employees are increasing and are expected to continue
      to increase in the future. We have from time to time in the past experienced,
      and could continue to experience in the future difficulty in hiring and
      retaining highly skilled employees with appropriate qualifications. If we were
      unable to attract and retain the technical and managerial personnel necessary
      to
      support and grow our businesses, our businesses would likely be materially
      and
      adversely affected.





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





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





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




13





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





Due
      to
      the relationships with his related entities, Mr. Egan will have an inherent
      conflict of interest in making any decision related to transactions between
      the
      related entities and us, including investment in our securities. Furthermore,
      the Company's Board of Directors presently is comprised entirely of individuals
      which are employees of theglobe, and therefore are not "independent." We intend
      to review related party transactions in the future on a case-by-case
      basis.





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





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







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





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





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





Based
      upon an evaluation and assessment completed by Company management, we have
      concluded that our internal control over financial reporting was not effective
      as of December 31, 2007.  Our conclusion was based upon the existence of
      certain “material weaknesses” related to the reporting of “.travel” name
      registration data as of December 31, 2007 (see Item 9A. CONTROLS AND PROCEDURES
      of this report for further details). Because we are a smaller company, we are
      not yet required to have our internal control over financial reporting audited
      by our independent public accountants. At the present time, this audit will
      be
      first required in connection with our annual report as of December 31,
      2009.





We
      cannot
      assure you that we will be able to adequately remediate the material weaknesses
      that we have identified as of December 31, 2007. Additionally, we cannot assure
      you that other material weaknesses will not be identified by either management
      or independent public accountants in the future. Our failure to remediate our
      existing material weaknesses, or to adequately protect against the occurance
      of
      additional material weaknesses, could result in material misstatements of our
      financial statement, subject the Company to regulatory scrutiny and/or cause
      investors to lose confidence in our reported financial information. Such failure
      could also adversely affect the Company’s operating results or cause the Company
      to fail to meet its reporting obligations.








**RISKS
      RELATING TO OUR INTERNET SERVICES BUSINESS**





**OUR
      CONTRACT TO SERVE AS THE REGISTRY FOR THE “.TRAVEL” TOP-LEVEL DOMAIN MAY BE
      TERMINATED EARLY, WHICH WOULD LIKELY DO IRREPARABLE HARM TO OUR DEVELOPING
      INTERNET SERVICES BUSINESS.**





Our
      contract with the Internet Corporation for Assigned Names and Numbers (“ICANN”)
      to serve as the registry for the “.travel” top-level Internet domain is for an
      initial term of ten years. Additionally, we have agreed to engage in good faith
      negotiations at regular intervals throughout the term of our contract (at least
      once every three years) regarding possible changes to the provisions of the
      contract, including changes in the fees and payments that we are required to
      make to ICANN. In the event that we materially and fundamentally breach the
      contract and fail to cure such breach within thirty days of notice, ICANN has
      the right to immediately terminate our contract. Additionally, in the event
      that
      Tralliance becomes subject to a bankruptcy proceeding, and such proceeding
      is
      not dismissed within sixty (60) days, our contract will be automatically early
      terminated.





Should
      our “.travel” registry contract be terminated early, we would likely permanently
      shutdown our Internet services business. Further, we could be held liable to
      pay
      additional fees or financial damages to ICANN or certain of our related
      subcontractors and, in certain limited circumstances, to pay punitive, exemplary
      or other damages to ICANN. Any such developments could have a material adverse
      effect on our financial condition and results of operations.




14





**OUR
      BUSINESS COULD BE MATERIALLY HARMED IF IN THE FUTURE THE ADMINISTRATION AND
      OPERATION OF THE INTERNET NO LONGER RELIES UPON THE EXISTING DOMAIN NAME
      SYSTEM.**





The
      domain name registration industry continues to develop and adapt to changing
      technology. This development may include changes in the administration or
      operation of the Internet, including the creation and institution of alternate
      systems for directing Internet traffic without the use of the existing domain
      name system. The widespread acceptance of any alternative systems could
      eliminate the need to register a domain name to establish an online presence
      and
      could materially adversely affect our business, financial condition and results
      of operations.




**WE
      OUTSOURCE CERTAIN OPERATIONS WHICH EXPOSES US TO RISKS RELATED TO OUR THIRD
      PARTY VENDORS.**





We
      do not
      develop and maintain all of the products and services that we offer. We offer
      most of our services to our customers through various third party service
      providers engaged to perform these services on our behalf and also outsource
      most of our operations to third parties. Accordingly, we are dependent, in
      part,
      on the services of third party service providers, which may raise concerns
      by
      our customers regarding our ability to control the services we offer them if
      certain elements are managed by another company. In the event that these service
      providers fail to maintain adequate levels of support, do not provide high
      quality service, discontinue their lines of business, cease or reduce operations
      or terminate their contracts with us, our business, operations and customer
      relations may be impacted negatively and we may be required to pursue
      replacement third party relationships, which we may not be able to obtain on
      as
      favorable terms or at all. If a problem should arise with a provider,
      transitioning services and data from one provider to another can often be a
      complicated and time consuming process and we cannot assure that if we need
      to
      switch from a provider we would be able to do so without significant
      disruptions, or at all. If we were unable to complete a transition to a new
      provider on a timely basis, or at all, we could be forced to either temporarily
      or permanently discontinue certain services which may disrupt services to our
      customers. Any failure to provide services would have a negative impact on
      our
      revenue, profitability and financial condition and could materially harm our
      Internet services business.





**REGULATORY
      AND STATUTORY CHANGES COULD HARM OUR INTERNET SERVICES
      BUSINESS.**





We
      cannot
      predict with any certainty the effect that new governmental or regulatory
      policies, including changes in consumer privacy policies or industry reaction
      to
      those policies, will have on our domain name registry business. Additionally,
      ICANN’s limited resources may seriously affect its ability to carry out its
      mandate or could force ICANN to impose additional fees on registries. Changes
      in
      governmental or regulatory statutes or policies could cause decreases in future
      revenue and increases in future costs which could have a material adverse effect
      on the development of our domain name registry business.





**OUR
      INTERNET SERVICES BUSINESS IS DEPENDENT ON THE TRAVEL INDUSTRY. OUR BUSINESS
      MAY
      BE AFFECTED BY EVENTS WHICH AFFECT THE TRAVEL INDUSTRY IN
      GENERAL.**





Revenue
      and cash flows of our Internet services business principally result from the
      registrations of domain names in the “.travel” top level domain. The ability to
      register such domain names is only available to businesses which are involved
      in
      the travel industry. Events such as terrorist attacks, military actions and
      natural disasters have had a significant adverse affect on the travel industry
      in the past. In addition, recessions or other economic pressures, such as the
      level of employment in the U.S or abroad have also had negative impacts on
      the
      travel industry. The overall demand for advertising, as well as the level of
      consumer travel may also be linked to such events or economic conditions. If
      such events result in a negative impact on the travel industry, such impact
      could have a material adverse effect on our business, results of operations
      and
      financial condition.




****WE
      MAY BE UNSUCCESSFUL IN ESTABLISHING AND MAINTAINING BRAND AWARENESS; BRAND
      IDENTITY IS CRITICAL TO OUR “.TRAVEL”
BUSINESS.****




Our
      success in operating and promoting the “.travel” registry will depend on our
      ability to create and maintain brand awareness for our product offerings. This
      has in some cases required, and may continue to require, a significant amount
      of
      capital to allow us to market our products and establish brand recognition
      and
      customer loyalty. Many of our competitors are larger than us and have
      substantially greater financial resources.





If
      we
      fail to promote and maintain our brand or our brand values are diluted, our
      business, operating results, and financial condition could be materially
      adversely affected. To promote our brand, we may be required to continue to
      increase our financial commitment to creating and maintaining brand awareness.
      We may not generate a corresponding increase in revenue to justify these
      costs.




15




**RISKS
      RELATING TO OUR COMMON STOCK**





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





As
      of
      March 5, 2007, we had issued and outstanding approximately 172.5 million shares,
      of which approximately 88.7 million shares were freely tradable over the public
      markets. There is limited trading volume in our shares and we are now traded
      only in the over-the-counter market. Most of our outstanding restricted shares
      of Common Stock were issued more than one year ago and are therefore eligible
      to
      be resold over the public markets pursuant to Rule 144 promulgated under the
      Securities Act of 1933, as amended.





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





In
      addition, as of December 31, 2007, there were outstanding options to purchase
      approximately 16.3 million shares of our Common Stock, which become eligible
      for
      sale in the public market from time to time depending on vesting and the
      expiration of lock-up agreements. The shares issuable upon exercise of these
      options are registered under the Securities Act and consequently, subject to
      certain volume restrictions as to shares issuable to executive officers, will
      be
      freely tradable.




Also
      as
      of March **** 5,
      2008,
      we had issued and outstanding warrants to acquire approximately 16.9 million
      shares of our Common Stock. **** Many of
      the outstanding instruments representing the warrants contain anti-dilution
      provisions pursuant to which the exercise prices and number of shares issuable
      upon exercise may be adjusted.





**OUR
      CHAIRMAN MAY CONTROL US.**





Michael
      S. Egan, our Chairman and Chief Executive Officer, beneficially owns or
      controls, directly or indirectly, approximately 274.7 million shares of our
      Common Stock as of March 5, 2008, which in the aggregate represents
      approximately 72.1% of the outstanding shares of our Common Stock (treating
      as
      outstanding for this purpose the shares of Common Stock issuable upon exercise
      and/or conversion of the options, convertible promissory notes and warrants
      owned by Mr. Egan or his affiliates). If the proposed sale of substantially
      all
      of the business and net assets of Tralliance and the issuance of approximately
      269 million shares of the Company’s common stock to an entity controlled by Mr.
      Egan, is consummated, Mr. Egan’s beneficial ownership percentage would then be
      increased to approximately 84% of fully diluted shares outstanding (see Note
      16,
“Subsequent Events” in the Notes to Consolidated Financial Statements for
      further details). **** Accordingly, Mr. Egan will be able to exercise significant influence over,
      if
      not control, any stockholder vote.





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





The
      shares of our Common Stock were delisted from the NASDAQ national market in
      April 2001 and are now traded in the over-the-counter market on what is commonly
      referred to as the electronic bulletin board or "OTCBB." As a result, an
      investor may find it more difficult to dispose of or obtain accurate quotations
      as to the market value of the securities. The delisting has made trading our
      shares more difficult for investors, potentially leading to further declines
      in
      share price and making it less likely our stock price will increase. It has
      also
      made it more difficult for us to raise additional capital. We may also incur
      additional costs under state blue-sky laws if we sell equity due to our
      delisting.




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





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




16




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





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





·
            have
                the effect of delaying, deferring or preventing a change in control
                of our
                Company;





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





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





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




**OUR
      STOCK PRICE IS VOLATILE AND MAY DECLINE.**





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





·
            the
                performance and public acceptance of our product
                lines;





·
            quarterly
                variations in our operating
                results;





·
            competitive
                announcements;





·
            sales
                of any of our businesses and/or components of their
                assets;





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





·
            news
                relating to trends in our markets.





The
      market price of our Common Stock could also decline as a result of unforeseen
      factors. The stock market has experienced significant price and volume
      fluctuations, and the market prices of technology companies, particularly
      Internet related companies, have been highly volatile. Our stock is also more
      volatile due to the limited trading volume and the high number of shares
      eligible for trading in the market.





**ITEM
      1B. UNRESOLVED STAFF COMMENTS**





Not
      applicable.





**ITEM
      2. PROPERTIES**





Our
      corporate headquarters is located in Fort Lauderdale, Florida, where we sublease
      on a month-to-month basis approximately 7,500 square feet of office space,
      at a
      rate of $15 thousand per month, from a company which is controlled by our
      Chairman. Total accrued rent owing under this sublease and a predecessor
      sublease at December 31, 2007 was approximately $329 thousand. Additionally,
      we
      currently utilize space in various third-party data centers located in several
      states which is used to house certain computer equipment.





**ITEM
      3. LEGAL PROCEEDINGS**





On
      and
      after August 3, 2001 six putative shareholder class action lawsuits were filed
      against the Company, certain of its current and former officers and directors
      (the “Individual Defendants”), and several investment banks that were the
      underwriters of the Company's initial public offering and secondary offering.
      The lawsuits were filed in the United States District Court for the Southern
      District of New York. A Consolidated Amended Complaint, which is now the
      operative complaint, was filed in the Southern District of New York on April
      19,
      2002.




17





The
      lawsuits purport to be class actions filed on behalf of purchasers of the stock
      of the Company during the period from November 12, 1998 through December 6,
      2000. Plaintiffs allege that the underwriter defendants agreed to allocate
      stock
      in the Company's initial public offering and its secondary offering to certain
      investors in exchange for excessive and undisclosed commissions and agreements
      by those investors to make additional purchases of stock in the aftermarket
      at
      pre-determined prices. Plaintiffs allege that the Prospectuses for the Company's
      initial public offering and its secondary offering were false and misleading
      and
      in violation of the securities laws because it did not disclose these
      arrangements. The action seeks damages in an unspecified amount. On February
      19,
      2003, a motion to dismiss all claims against the Company was denied by the
      Court. On December 5, 2006, the Second Circuit vacated a decision by the
      district court granting class certification in six of the coordinated cases,
      which are intended to serve as test, or “focus,” cases. The plaintiffs selected
      these six cases, which do not include the Company. On April 6, 2007, the Second
      Circuit denied a petition for rehearing filed by the plaintiffs, but noted
      that
      the plaintiffs could ask the district court to certify more narrow classes
      than
      those that were rejected.





Prior
      to
      the Second Circuit’s December 5, 2006 ruling, the majority of issuers, including
      the Company, and their insurers had submitted a settlement agreement to the
      district court for approval. In light of the Second Circuit opinion, the parties
      agreed that the settlement could not be approved because the defined settlement
      class, like the litigation class, could not be certified. On June 25, 2007,
      the
      district court approved a stipulation filed by the plaintiffs and the issuers
      which terminated the proposed settlement. On August 14, 2007, the plaintiffs
      filed amended complaints in the six focus cases. The amended complaints include
      a number of changes, such as changes to the definition of the purported class
      of
      investors, and the elimination of the individual defendants as defendants.
      On
      September 27, 2007, the plaintiffs filed a motion for class certification in
      the
      six focus cases. On November 14, 2007, the issuers and the underwriters named
      as
      defendants in the six focus cases filed motions to dismiss the amended
      complaints against them. We are awaiting the Court’s decision on these motions.





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





The
      Company is currently a party to certain other claims and disputes arising in
      the
      ordinary course of business, including certain disputes related to vendor
      charges incurred primarily as the result of the failure and subsequent shutdown
      of its discontinued VoIP telephony services business. The Company believes
      that
      it has recorded adequate accruals on its balance sheet to cover such disputed
      charges and is seeking to resolve and settle such disputed charges for amounts
      substantially less than recorded amounts. An adverse outcome in any of these
      matters, however, could materially and adversely effect our financial position,
      utilize a significant portion of our cash resources and adversely affect our
      ability our ability to continue as a going concern (see Note 3, “Discontinued
      Operations”).







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




None.




**PART
      II**




**ITEM
      5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES**





**MARKET
      INFORMATION**





The
      shares of our Common Stock trade in the over-the-counter market on what is
      commonly referred to as the electronic bulletin board, under the symbol
      "TGLO.OB". The following table sets forth the range of high and low bid prices
      of our Common Stock for the periods indicated as reported by the
      over-the-counter market (the electronic bulletin board). The quotations below
      reflect inter-dealer prices, without retail mark-up, mark-down or commission
      and
      may not represent actual transactions:





2007
            
            2006
            
            2005High
            
            Low
            
            High
            
            Low
            
            High
            
            LowFourth
                Quarter
            
            $
            0.03
            
            $
            0.01
            
            $
            0.09
            
            $
            0.05
            
            $
            0.49
            
            $
            0.24Third
                Quarter
            
            $
            0.05
            
            $
            0.02
            
            $
            0.27
            
            $
            0.08
            
            $
            0.45
            
            $
            0.10Second
                Quarter
            
            $
            0.05
            
            $
            0.03
            
            $
            0.31
            
            $
            0.09
            
            $
            0.16
            
            $
            0.08First
                Quarter
            
            $
            0.10
            
            $
            0.03
            
            $
            0.44
            
            $
            0.30
            
            $
            0.43
            
            $
            0.12





The
      market price of our Common Stock is highly volatile and fluctuates in response
      to a wide variety of factors. (See "Risk Factors-Our Stock Price is Volatile
      and
      May Decline.")




18





**HOLDERS
      OF COMMON STOCK**





We
      had
      approximately 665 holders of record of Common Stock as of March 5, 2008. This
      does not reflect persons or entities that hold Common Stock in nominee or
      "street" name through various brokerage firms.








**DIVIDENDS**





We
      have
      not paid any cash dividends on our Common Stock since our inception and do
      not
      intend to pay dividends in the foreseeable future. Our board of directors will
      determine if we pay any future dividends.





**SECURITIES
      AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS AS OF** **DECEMBER
      31, 2007**




Plan
                Category
            
            
            Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights
            
            
            Weighted-average
                exercise price of outstanding options, warrants and rights
            
            
            Number
                of securities remaining available for future issuance under equity
                compensation
              plansEquity
                Compensation plans approved by security holders
            
            
            9,119,660
            
            $
            0.64
            
            
            2,799,560Equity
                Compensation plans not approved by security holders
            
            
            7,221,000
            
            $
            0.11
            
            
            3,844,141Total
            
            
            16,340,660
            
            $
            0.40
            
            
            6,643,701





Equity
      compensation plans not approved by security holders consist of the
      following:




·
            1,750,000
                shares of Common Stock of theglobe.com, inc., issued to Edward A.
                Cespedes
                pursuant to the Non-Qualified Stock Option Agreement dated August
                12, 2002
                at an exercise price of $0.02 per share. These stock options vested
                immediately and have a life of ten years from date of
                grant.·
            2,500,000
                shares of Common Stock of theglobe.com, inc., issued to Michael S.
                Egan
                pursuant to the Non-Qualified Stock Option Agreement dated August
                12, 2002
                at an exercise price of $0.02 per share. These stock options vested
                immediately and have a life of ten years from date of
                grant.·
            500,000
                shares of Common Stock of theglobe.com, inc., issued to Robin S.
                Lebowitz
                pursuant to the Non-Qualified Stock Option Agreement dated August
                12, 2002
                at an exercise price of $0.02 per share. These stock options vested
                immediately and have a life of ten years from date of
                grant.·
            The
                Company's 2003 Amended and Restated Non-Qualified Stock Option Plan
                (the
                "2003 Plan"). The purpose of the 2003 Plan is to strengthen theglobe.com,
                inc. by providing an incentive to certain employees and consultants
                (or in
                certain circumstances, individuals who are the principals of certain
                consultants) of the Company or any subsidiary of the Company, with
                a view
                toward encouraging them to devote their abilities and industry to
                the
                success of the Company's business enterprise. The 2003 Plan is
                administered by a Committee appointed by the Board to administer
                the Plan,
                which has the power to determine those eligible individuals to whom
                options shall be granted under the 2003 Plan and the number of such
                options to be granted and to prescribe the terms and conditions (which
                need not be identical) of each such option, including the exercise
                price
                per share subject to each option and vesting schedule of options
                granted
                thereunder, and make any amendment or modification to any agreement
                consistent with the terms of the 2003 Plan. The maximum number of
                shares
                that may be made the subject of options granted under the 2003 Plan
                is
                1,000,000 and no option may have a term in excess of ten years. Options
                to
                acquire an aggregate of 41,000 shares of Common Stock have been issued
                to
                various independent sales agents at a weighted average exercise price
                of
                $1.54. These stock options vested immediately and have a life of
                ten years
                from date of grant. Options to acquire an aggregate of 65,000 shares
                of
                Common Stock have been issued to various employees at a weighted
                average
                exercise price of $1.00. These stock options vested immediately and
                have a
                life of ten years from date of grant. Options to acquire an aggregate
                of
                110,000 shares of Common Stock have been issued to two independent
                contractors at a weighted average exercise price of $1.22. These
                stock
                options vested immediately and have a life of five years from date
                of
                grant.




19




·
            The
                Company's 2004 Stock Incentive Plan (the "2004 Plan"). The purpose
                of the
                2004 Plan is to enhance the profitability and value of the Company
                for the
                benefit of its stockholders by enabling the Company to offer eligible
                employees, consultants and non-employee directors stock-based and
                other
                incentives, thereby creating a means to raise the level of equity
                ownership by such individuals in order to attract, retain and reward
                such
                individuals and strengthen the mutuality of interests between such
                individuals and the Company's stockholders. The 2004 Plan is administered
                by a Committee appointed by the Board to administer the Plan, which
                has
                the power to determine those eligible individuals to whom stock options,
                stock appreciation rights, restricted stock awards, performance awards,
                or
                other stock-based awards shall be granted under the 2004 Plan and
                the
                number of such options, rights or awards to be granted and to prescribe
                the terms and conditions (which need not be identical) of each such
                option, right or award, including the exercise price per share subject
                to
                each option and vesting schedule of options granted thereunder, and
                make
                any amendment or modification to any agreement consistent with the
                terms
                of the 2004 Plan. The maximum number of shares that may be made the
                subject of options, rights or awards granted under the 2004 Plan
                is
                7,500,000 and no option may have a term in excess of ten years. In
                October
                of 2004, options to acquire 250,000 shares of Common Stock were issued
                to
                an employee at an exercise price of $0.52, of which 62,500 of these
                stock
                options vested immediately and the balance vested ratably on a quarterly
                basis over three years. These options have a life of ten years from
                date
                of grant. In August of 2006, options to acquire 2,050,000 shares
                of Common
                Stock were issued to 10 employees at an exercise price of $0.14,
                of which
                25% of these options vested immediately and the balance vests ratably
                on a
                quarterly basis over three years. These options have a life of ten
                years
                from date of grant.





**STOCK
      PERFORMANCE GRAPH**





The
      following graph compares the cumulative total return on theglobe’s common stock
      during the last five fiscal years with the NASDAQ Stock Market Index and the
      AMEX Interactive Week Internet Index during the same period. The graph shows
      the
      value, at the end of each of the last five fiscal years, of $100 invested in
      theglobe common stock or the indices on December 31, 2002, and assumes the
      reinvestment of all dividends. Historical stock price performance is not
      necessarily indicative of future stock price performance.










20




At
                  December 312002
              
              2003
              
              2004
              
              2005
              
              2006
              
              2007theglobe
              
              $
              100
              
              $
              2,217
              
              $
              700
              
              $
              650
              
              $
              100
              
              $
              17NASDAQ
              
              $
              100
              
              $
              150
              
              $
              163
              
              $
              167
              
              $
              184
              
              $
              202AMEX
                  Internet
              
              $
              100
              
              $
              173
              
              $
              209
              
              $
              212
              
              $
              241
              
              $
              277




The
      shares of our common stock were delisted from the NASDAQ national market in
      April 2001 and now trade in the over-the-counter market on what is commonly
      referred to as the electronic bulletin board or “OTCBB”, under the symbol
“TGLO.OB”.




**RECENT
      SALES OF UNREGISTERED SECURITIES**





None.





**ITEM
      6. SELECTED FINANCIAL DATA**





**SELECTED
      CONSOLIDATED FINANCIAL DATA OF THEGLOBE.COM, INC.** **(1)**





The
      selected consolidated balance sheet data as of December 31, 2007 and 2006 and
      the selected consolidated operating data for the years ended December 31, 2007,
      2006 and 2005 have been derived from our audited consolidated financial
      statements included elsewhere herein. The selected consolidated balance sheet
      data as of December 31, 2005, 2004 and 2003 and the selected consolidated
      operating data for the years ended December 31, 2004 and 2003 have been derived
      from our audited consolidated financial statements not included herein. The
      nature of our business has changed significantly from 2003 to 2007. As a result,
      our historical results are not necessarily comparable. Additionally, our
      historical results are not necessarily indicative of results for any future
      period. You should read these selected consolidated financial data, together
      with the accompanying notes, in conjunction with the “Management’s Discussion
      and Analysis of Financial Condition and Results of Operations” section of this
      10-K and our consolidated financial statements and the related
      notes.




21


Year
                  Ended December 31,2007
              
              2006
              
              2005(2)
              
              2004
              
              2003(
                  In thousands, except per share date)Operating
                  Data:Continuing
                  Operations:Net
                  revenue
              
              $
              2,230
              
              $
              1,409
              
              
              198
              
              $
              -
              
              $
              -Operating
                  expenses
              
              
              6,451
              
              
              8,298
              
              
              7,449
              
              
              3,675
              
              
              3,818Loss
                  from continuing operations
              
              
              (5,422
              )
              
              (6,871
              )
              
              (3,874
              )
              
              (4,823
              )
              
              (6,066
              )Discontinued
                  operations, net of tax
              
              
              (729
              )
              
              (10,102
              )
              
              (7,636
              )
              
              (19,450
              )
              
              (4,968
              )Net
                  loss
              
              
              (6,151
              )
              
              (16,974
              )
              
              (11,510
              )
              
              (24,273
              )
              
              (11,034
              )Net
                  loss applicable to common stockholders
              
              
              (6,151
              )
              
              (16,974
              )
              
              (11,510
              )
              
              (24,273
              )
              
              (19,154
              )Basic
                  and diluted net loss per common share:Loss
                  from continuing operations
              
              $
              (0.03
              )
              $
              (0.04
              )
              $
              (0.02
              )
              $
              (0.04
              )
              $
              (0.37
              )Net
                  loss
              
              
              (0.04
              )
              
              (0.10
              )
              
              (0.06
              )
              
              (0.19
              )
              
              (0.49
              )Balance
                  Sheet Data (at end of period):Total
                  assets
              
              $
              1,713
              
              $
              7,405
              
              $
              21,411
              
              $
              34,017
              
              $
              7,172Long-term
                  debt
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              100





(1)
      Certain prior year amounts have been reclassified to conform to the current
      year
      presentation. These reclassifications had no effect on the net losses as
      previously reported by the Company. Significant events affecting our historical
      performance in 2005 through 2007 are described in Management's Discussion and
      Analysis of Financial Condition and Results of Operations.





(2)
      2005
      consolidated financial data include transactions related to (i) the sale of
      the
      business and substantially all of the net assets of SendTec, Inc. to
      RelationServe Media, Inc. on October 31, 2005 (the “SendTec Asset Sale”) and the
      resultant gain on sale of approximately $1.8 million, and (ii) the repurchase
      of
      Common Stock and termination of stock options and warrants in accordance with
      certain SendTec Asset Sale ancillary agreements, including the Redemption
      Agreement and the Termination Agreement.




**ITEM
      7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS**




**BASIS
      OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS; GOING
      CONCERN**





Certain
      matters discussed below under “Liquidity and Capital Resources” raise
      substantial doubt about our ability to continue as a going concern. In addition,
      we have received a report from our independent registered public accountants,
      relating to our December 31, 2007 audited financial statements containing an
      explanatory paragraph stating that our recurring losses from operations and
      our
      accumulated deficit raise substantial doubt about our ability to continue as
      a
      going concern. Our consolidated financial statements have been prepared in
      accordance with accounting principles generally accepted in the United States
      of
      America on a going concern basis, which contemplates the realization of assets
      and the satisfaction of liabilities in the normal course of business.
      Accordingly, our consolidated financial statements do not include any
      adjustments relating to the recoverability of assets and classification of
      liabilities that might be necessary should we be unable to continue as a going
      concern.





**OVERVIEW**





As
      of
      December 31, 2007, theglobe.com, inc. (the “Company”” or “theglobe”) managed a
      single line of business, Internet services, consisting of Tralliance Corporation
      (“Tralliance”) which is the registry for the “.travel” top-level Internet
      domain. We acquired Tralliance on May 9, 2005.




22





In
      March
      2007, management made the decision to shutdown the operation of both its
      computer games and VoIP telephony services lines of business and to focus 100%
      of its resources and efforts to further develop its Internet services business.
      Results of operations for the computer games and VoIP telephony services
      businesses have been reported separately as “Discontinued Operations” in the
      accompanying consolidated statements of operations for all periods presented.
      The assets and liabilities of the computer games and VoIP telephony services
      businesses have been included in “Assets of Discontinued Operations” and
“Liabilities of Discontinued Operations” in the accompanying consolidated
      balance sheets for all periods presented.





On
      October 31, 2005, we completed the sale of all of the business and substantially
      all of the net assets of SendTec, Inc. (“SendTec”), our direct response
      marketing services and technology business, for approximately $39.9 million
      in
      cash. Results of operations for SendTec have been reported separately as
“Discontinued Operations” in the accompanying consolidated statement of
      operations for the years ended December 31, 2005.





**PROPOSED
      TRALLIANCE TRANSACTION**





As
      more
      fully discussed in Note 16, “Subsequent Events” in the accompanying Notes to
      Consolidated Financial Statements, on February 1, 2008 the Company announced
      that it had entered into a letter of intent to sell substantially all of the
      business and net assets of its Tralliance Corporation subsidiary and to issue
      approximately 269 million shares of its common stock, to The Registry Management
      Company, LLC, a privately held entity controlled by Michael S. Egan,
      theglobe.com’s Chairman, CEO and controlling investor (the “Proposed Tralliance
      Transaction”).





As
      part
      of the purchase consideration for the Proposed Tralliance Transaction, Mr.
      Egan
      and certain of his affiliates will exchange and surrender all of their right,
      title and interest to secured convertible demand promissory notes, accrued
      and
      unpaid interest thereon, as well as outstanding rent and miscellaneous fees
      that
      are due and outstanding as of the Closing Date of the Proposed Tralliance
      Transaction. Such liabilities totaled approximately $6.0 million at December
      31,
      2007.





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





**RESULTS
      OF OPERATIONS**





The
      nature of our business has significantly changed from 2005 through 2007. In
      March 2007, management and the Board of Directors of the Company decided to
      discontinue the operating, research and development activities of our VoIP
      telephony service and terminated all of the remaining employees of the business.
      Management and the Board of Directors also decided in March 2007 to cease all
      activities related to our Computer Games businesses, including discontinuing
      the
      operation of our magazine publications, games distribution business and related
      websites. The Company’s decision to shutdown its Computer Games businesses was
      primarily based on historic losses sustained by these businesses in the recent
      past and management’s expectation of continued future losses. As a result of
      management’s decision to shutdown the operations of both our VoIP and Computer
      Games businesses, the results of operations of these businesses have been
      reported as “Discontinued Operations” for the years ended December 31, 2007,
      2006 and 2005. We entered into two new business lines, marketing services and
      Internet services, as a result of our acquisitions of SendTec on September
      1,
      2004 and Tralliance on May 9, 2005, respectively. In addition, we sold the
      business and substantially all of the net assets of SendTec effective October
      31, 2005, and as a result have reported SendTec’s results of operations as
“Discontinued Operations” for the years ended December 31, 2007, 2006 and 2005.
      The results of operations of Tralliance are included in the Company's
      consolidated operating results only from its date of acquisition. Consequently,
      and primarily as a result of these factors, the results of operations for each
      of the years ended December 31, 2007, 2006 and 2005 are not necessarily
      comparable.




**YEAR
      ENDED DECEMBER 31, 2007 COMPARED TO YEAR ENDED DECEMBER 31,
      2006**





**Continuing
      Operations**





NET
      REVENUE. Net revenue from continuing operations totaled $2.2 million for the
      year ended December 31, 2007 as compared to $1.4 million for the year ended
      December 31, 2006; an increase of approximately $821 thousand. Approximately
      $294 thousand or 36% of the total increase in net revenue as compared to the
      year ended December 31, 2006 resulted from net revenue attributable to the
      sale
      of advertising on our search.travel website. The search.travel website was
      introduced in August 2006 as a travel related portal and search engine. As
      discussed in Note 14, “Related Party Transactions” in the Notes to Consolidated
      Financial Statements, the search.travel website was sold to an entity controlled
      by the Company’s Chairman in December 2007. Total net revenue attributable to
      domain name registrations for the year ended December 31, 2007 was approximately
      $1.9 million versus $1.4 million in 2006. Total domain names registered as
      of
      December 31, 2007 and 2006 approximated 29.7 thousand and 22.1 thousand,
      respectively (excluding bulk names). Net revenue attributable to such domain
      name registrations is recognized as revenue on a straight-line basis over the
      term of the registrations.




23




COST
      OF
      REVENUE. Cost of revenue totaled $420 thousand for the year ended December
      31,
      2007 as compared to $455 thousand for the year ended December 31, 2006. Cost
      of
      revenue consists primarily of fees paid to third party service providers which
      furnish outsourced services, including verification of registration eligibility,
      maintenance of the “.travel” directory of consumer-oriented registrant travel
      data, as well as other services related to domain registrations. Fees for some
      of these services vary based on transaction levels or transaction types. Fees
      incurred for outsourced services are generally deferred and amortized to cost
      of
      revenue over the term of the related domain name registration. The principal
      factor contributing to the $35 thousand decrease in cost of revenue as compared
      to the prior year was due to Tralliance performing more verifications of
      registration eligibility in-house during 2007. Cost of revenue as a percent
      of
      net revenue attributable to domain name registrations was approximately 21.7%
      for 2007 as compared to 32.3 % for 2006.




SALES
      AND
      MARKETING. Sales and marketing expenses consist primarily of salaries and
      related expenses of sales and marketing personnel, commissions, advertising
      and
      marketing costs, public relations expenses and promotional activities. Sales
      and
      marketing expenses totaled $1.9 million for the year ended December 31, 2007,
      a
      decrease of $1.2 million from the $3.1 million reported for 2006. Beginning
      in
      August 2006 Tralliance incurred certain significant expenses, including $533
      thousand related to a targeted television and internet advertising campaign
      introducing its travel related search enginewww.search.travel.
      Also on
      November 22, 2006, the Company entered into certain marketing services
      agreements with two entities and issued 10,000,000 warrants to the controlling
      shareholder of the entities as consideration. The fair value attributable to
      the
      warrants of $515 thousand, as calculated using the Black Scholes model, was
      charged to sales and marketing expenses of Tralliance as this is where the
      two
      entities agreed to focus their marketing efforts. Further contributing to the
      decrease in sales and marketing expense in the year ended December 31, 2007
      from
      the prior year was a decrease of approximately $337 thousand in public relations
      expense.





GENERAL
      AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist
      primarily of salaries and other personnel costs related to management, finance
      and accounting functions, facilities, outside legal and professional fees,
      information-technology consulting, directors and officers insurance, bad debt
      expenses and general corporate overhead costs. Consolidated general and
      administrative expenses for the year ended December 31, 2007 declined
      approximately $586 thousand as compared to the prior year. This decrease was
      principally due to a $411 thousand decrease in stock compensation expense and
      a
      $298 thousand decrease in travel and entertainment expense. These decreases
      were
      partially offset by an increase of approximately $144 thousand in personnel
      expense.





DEPRECIATION
      AND AMORTIZATION. Depreciation and amortization expense totaled $240 thousand
      for the year ended December 31, 2007 as compared to $262 thousand for the prior
      year.





INTEREST
      INCOME (EXPENSE), NET. Net interest expense of $1.6 million reported for 2007
      included $1.25 million of non-cash interest expense related to the beneficial
      conversion features of the $1.25 million of secured convertible demand
      promissory notes issued by the Company in 2007, $399 thousand of interest
      expense related to interest accruals on both the Company’s 2007 and 2005 secured
      demand convertible promissory notes and interest income of $62 thousand. Net
      interest income, net of $121,000 reported for 2006 included interest income
      of
      $473 thousand and interest expense of $340 thousand related to accruals on
      the
      secured demand convertible promissory notes issued by the Company in 2005.
      Interest income decreased by $411 thousand in 2007 compared to 2006 due
      principally to lower levels of funds available for investment during 2007
      compared to 2006.





OTHER
      INCOME (EXPENSE), NET. Other income, net, of $390 thousand reported for 2007
      included a $380 thousand net gain on the sale of our search.travel portal and
      search engine. Other income, net, of $21 thousand was reported for
      2006.




INCOME
      TAXES. No tax benefit was recorded for the losses incurred for the years ended
      December 31, 2007 or 2006 as we recorded a 100% valuation allowance against
      our
      otherwise recognizable deferred tax assets due to the uncertainty surrounding
      the timing or ultimate realization of the benefits of our net operating loss
      carryforwards in future periods. The income tax provision of $124 thousand
      recognized for continuing operations for the year ended December 31, 2006,
      resulted from additional state income taxes due upon the finalization of the
      Company’s 2005 consolidated tax returns. As of December 31, 2007, the Company
      had net operating loss carryforwards available for U.S. tax purposes of
      approximately $167 million. These carryforwards expire through 2026. The Tax
      Reform Act of 1986 imposes substantial restrictions on the utilization of net
      operating losses and tax credits in the event of an "ownership change" of a
      corporation. Due to various significant changes in our ownership interests,
      as
      defined in the Internal Revenue Code of 1986, as amended, we have substantially
      limited the availability of our net operating loss carryforwards. These net
      operating loss carryforwards may be further adversely impacted if the Proposed
      Tralliance Transaction is consummated. There can be no assurance that we will
      be
      able to utilize any net operating loss carryforwards in the future.





24




**DISCONTINUED
      OPERATIONS**





The
      loss
      from discontinued operations totaled approximately $729 thousand for the year
      ended December 31, 2007 as compared to a loss of $10.1 million for the year
      ended December 31, 2006, and is summarized as follows:


VoIPComputer
              
              TelephonyGames
              
              Services
              
              TotalYear
                  ended December 31, 2007:Net
                  revenue
              
              $
              634,164.00
              
              $
              630.00
              
              $
              634,794.00Operating
                  expenses
              
              $
              783,458.00
              
              $
              707,567.00
              
              $
              1,491,025.00Other
                  income, net
              
              $
              34,556.00
              
              $
              92,435.00
              
              $
              126,991.00Loss
                  from discontinued operations
              
              $
              (114,738.00
              )
              $
              (614,502.00
              )
              $
              (729,240.00
              )
  VoIPComputer
              
              
              TelephonyGames
              
              
              Services
              
              
              TotalYear
                  ended December 31, 2006:Net
                  revenue
              
              $
              2,038,649.00
              
              $
              34,638.00
              
              $
              2,073,287.00Operating
                  expenses
              
              $
              2,762,146.00
              
              $
              9,409,967.00
              
              $
              12,172,113.00Other
                  income (expense), net
              
              $
              130,000.00
              
              $
              (133,435.00
              )
              $
              (3,435.00
              )Loss
                  from discontinued operations
              
              $
              (593,497.00
              )
              $
              (9,508,764.00
              )
              $
              (10,102,261.00
              )








**YEAR
      ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31,
      2005**





**CONTINUING
      OPERATIONS**





NET
      REVENUE. Net revenue from continuing operations totaled $1.4 million for the
      year ended December 31, 2006 as compared to $198 thousand for the year ended
      December 31, 2005. Tralliance, which was acquired in May 2005, began collecting
      fees for Internet domain name registrations in October 2005. Thus, the results
      of operations for 2006 include a full year of revenue recognition related to
      the
      operations of Tralliance versus three months of revenue recognition during
      2005.





COST
      OF
      REVENUE. Cost of revenue totaled $455 thousand for the year ended December
      31,
      2006 as compared to $86 thousand for the year ended December 31, 2005. Cost
      of
      revenue consists primarily of fees paid to third party service providers which
      furnish outsourced services, including verification of registration eligibility,
      maintenance of the “.travel” directory of consumer-oriented registrant travel
      data, as well as other services. Fees for some of these services vary based
      on
      transaction levels or transaction types. The results of operations for 2006
      include a full year of cost of revenue related to the operations of Tralliance
      versus three months of costs during 2005, the principal factor contributing
      to
      the $368 thousand increase in cost of revenue as compared to the prior year.
      Cost of revenue as a percent of net revenue was approximately 32% for 2006
      as
      compared to 44% for 2005. This was due in part to Tralliance performing more
      verifications of registration eligibility in-house during the last half of
      2006.





SALES
      AND
      MARKETING. Sales and marketing expenses consist primarily of salaries and
      related expenses of sales and marketing personnel, commissions, advertising
      and
      marketing costs, public relations expenses and promotional activities. Sales
      and
      marketing expenses totaled $3.1 million for the year ended December 31, 2006,
      versus the $488 thousand reported for 2005. On November 22, 2006, the Company
      entered into certain marketing services agreements with two entities and issued
      10,000,000 warrants to the controlling shareholder of the entities as
      consideration. The fair value attributable to the warrants of $515 thousand,
      as
      calculated using the Black Scholes model, was charged to sales and marketing
      expenses of Tralliance as this is where the two entities have agreed to focus
      their marketing efforts. Excluding the charge related to the warrants, sales
      and
      marketing expenses of Tralliance totaled $2.6 million for the year ended
      December 31, 2006. During August 2006, Tralliance introduced its web portal
      and
      search engine, www.search.travel ,
      through the use of a targeted television and Internet advertising campaign.
      As a
      result, total 2006 advertising costs of Tralliance increased $619 thousand
      from
      2005 to a total of $678 thousand. In addition, during the third quarter of
      2006,
      Tralliance engaged several outside parties to promote its registry operations
      and the www.search.travel website
      internationally, which resulted in the recognition of $442 thousand of
      consulting fees and related costs. The Company also reassigned personnel from
      its VoIP telephony services division during 2006 to perform marketing functions
      for Tralliance which resulted in a $508 thousand increase in sales and marketing
      personnel costs of Tralliance as compared to 2005. The remaining $538 thousand
      increase in Tralliance’s sales and marketing expenses as compared to the year
      ended December 31, 2005, consisted primarily of higher public relations, trade
      show and promotional costs.




25





GENERAL
      AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist
      primarily of salaries and other personnel costs related to management, finance
      and accounting functions, facilities, outside legal and professional fees,
      information-technology consulting, directors and officers insurance, bad debt
      expenses and general corporate overhead costs. General and administrative
      expenses for the year ended December 31, 2006 were $4.5 million compared to
      $6.8
      million in 2005. The decrease is principally due to $3.0 million in lower bonus
      awards to executive officers. General and administrative expenses of Tralliance
      increased $937 thousand a compared to 2005 due to increases in personnel costs
      of $340 thousand and travel and entertainment costs of $356 thousand. During
      2006, we reassigned employees from the VoIP telephony services division in
      order
      to accommodate the increase in authentication and registration activity
      experienced by Tralliance. In order to increase awareness of the “.travel”
top-level domain, we have increased our participation in travel industry
      meetings and conferences, both nationally and internationally, since the October
      2005 launch of our “.travel” domain registry operations which was the principal
      factor contributing to the increase in travel and entertainment
      costs.





DEPRECIATION
      AND AMORTIZATION. Depreciation and amortization expense totaled $262 thousand
      for the year ended December 31, 2006 as compared to $124 thousand for the prior
      year.





INTEREST
      INCOME (EXPENSE), NET. Interest income, net of interest expense, totaled $121
      thousand for the year ended December 31, 2006. During the year ended December
      31, 2005, we reported a total of $4.1 million of net interest expense. A total
      of $4.0 million of non-cash interest expense was recorded during 2005 related
      to
      the beneficial conversion features of the $4.0 million of secured demand
      convertible promissory notes issued by the Company during 2005.





OTHER
      INCOME (EXPENSE), NET. Other income, net, of $21 thousand was reported for
      2006.
      Other expense, net, of $280 thousand reported for 2005 as a result of reserves
      provided against amounts loaned by the Company to Tralliance prior to its
      acquisition in May 2005.




INCOME
      TAXES. The income tax provision of $124 thousand recognized for continuing
      operations for the year ended December 31, 2006, resulted from additional state
      income taxes due upon the finalization of the Company’s 2005 consolidated tax
      returns. An income tax benefit of $7.8 million was recognized for continuing
      operations for the year ended December 31, 2005, as we were able to utilize
      our
      2005 losses incurred by continuing operations, as well as losses from prior
      years, to partially offset the 2005 income and gain on sale of our discontinued
      operations.




26




**DISCONTINUED
      OPERATIONS**





The
      loss
      from discontinued operations totaled approximately $10.1 million for the year
      ended December 31, 2006 as compared to a loss of $7.6 million for the year
      ended
      December 31, 2005, and is summarized as follows:


VoIPComputer
              
              TelephonyGames
              
              Services
              
              TotalYear
                  ended December 31, 2006:Net
                  revenue
              
              $
              2,038,649
              
              $
              34,368
              
              $
              2,073,287Operating
                  expenses
              
              
              2,762,146
              
              
              9,409,967
              
              
              12,172,113Other
                  income (expense), net
              
              
              130,000
              
              
              (133,435
              )
              
              (3,435
              )Loss
                  from discontinued operations
              
              $
              (593,497
              )
              $
              (9,508,764
              )
              $
              (10,102,261
              )
  VoIPComputer
              
              TelephonyGames
              
              Services
              
              SendTec
              
              TotalYear
                  ended December 31, 2005:Net
                  revenue
              
              $
              1,948,716
              
              $
              248,789
              
              $
              32,196,946
              
              $
              34,394,451Operating
                  expenses
              
              
              4,095,807
              
              
              13,395,482
              
              
              31,221,281
              
              
              48,712,570Other
                  income (expense), net
              
              
              2,481
              
              
              (1,011
              )
              
              38,765
              
              
              40,235Income
                  tax provision (benefit)
              
              
              (813,687
              )
              
              (5,004,313
              )
              
              945,629
              
              
              (4,872,371
              )Loss
                  from operations, net of tax
              
              
              (1,330,923
              )
              
              (8,143,391
              )
              
              68,801
              
              
              (9,405,513
              )Gain
                  on SendTec sale, net of tax
              
              
              -
              
              
              -
              
              
              1,769,531
              
              
              1,769,531Loss
                  from discontinued operations
              
              $
              (1,330,923
              )
              $
              (8,143,391
              )
              $
              1,838,332
              
              $
              (7,635,982
              )





During
      2006, the Company implemented various cost reduction programs which decreased
      the operating expenses and operating losses incurred by its computer games
      and
      VoIP telephony services for the year ended December 31, 2006 compared to the
      year ended December 31, 2005. On October 31, 2005, the Company sold its SendTec
      marketing services business resulting in a gain on sale of approximately $1.8
      million, net of an income tax provision of approximately $13.2 million. Such
      income tax provision was related to the utilization of operating losses to
      partially offset income taxes that would have otherwise been due on the gain.
      In
      this connection, income tax benefits totaling approximately $5.8 million were
      also allocated to the Company’s computer games and VoIP telephony services
      businesses during 2005.





**LIQUIDITY
      AND CAPITAL RESOURCES**





**FUTURE
      AND CRITICAL NEED FOR CAPITAL**





For
      the
      reasons described below, Company management does not believe that cash on hand
      and cash flow generated internally by the Company will be adequate to fund
      the
      operation of its businesses beyond a short period of time. Additionally, we
      have
      received a report from our independent registered public accountants, relating
      to our December 31, 2007 audited financial statements, containing an explanatory
      paragraph stating that our recurring losses from operations and our accumulated
      deficit raise substantial doubts about our ability to continue as a going
      concern.





During
      the year ended December 31, 2007, the Company was able to continue operating
      as
      a going concern due principally to funding of $1.25 million received from the
      sale of secured convertible demand promissory notes to an entity controlled
      by
      Michael Egan, its Chairman and Chief Executive Officer. Additionally, in
      December 2007, funding of $380 thousand was provided from the sale of all of
      the
      Company’s rights related to its www.search.travel domain name and website to an
      entity controlled by Mr. Egan. At December 31, 2007, the Company had a net
      working capital deficit of approximately $9.4 million, inclusive of a cash
      and
      cash equivalents balance of approximately $631 thousand. Such working capital
      deficit included an aggregate of $4.65 million in secured convertible demand
      debt and related accrued interest of approximately $955 thousand due to entities
      controlled by Mr. Egan (See Note 8, “Debt” and Note 14, “Related Party
      Transactions” in the accompanying Notes to Consolidated Financial Statements for
      further details). Additionally, such working capital deficit included
      approximately $1.9 million of net liabilities of discontinued operations, with
      a
      significant portion of such liabilities related to charges which are disputed
      by
      the Company.





Notwithstanding
      previous cost reduction actions taken by the Company and its decision to
      shutdown its unprofitable computer games and VoIP telephony services businesses
      in March 2007 (see Note 3, “Discontinued Operations” in the accompanying Notes
      to Consolidated Financial Statements), the Company continues to incur
      substantial consolidated net losses, although reduced in comparison with prior
      periods, and management believes that the Company will continue to be
      unprofitable in the foreseeable future. Based upon the Company’s current
      financial condition, as discussed above, and without the infusion of additional
      capital, management does not believe that the Company will be able to fund
      its
      operations beyond the end of the second quarter of 2008.




27





As
      more
      fully discussed in Note 16, “Subsequent Events” in the Notes to Consolidated
      Financial Statements, on February 1, 2008, the Company announced that it had
      entered into a letter of intent to sell substantially all of the business and
      net assets of its Tralliance Corporation subsidiary and to issue approximately
      269 million shares of its common stock to an entity controlled by Mr. Egan
      (the
“Proposed Tralliance Transaction”). In the event that this Proposed Tralliance
      Transaction is consummated, all of the Company’s remaining secured and unsecured
      debt owed to entities controlled by Mr. Egan (which was approximately $5.6
      million and $400 thousand at December 31, 2007, respectively) will be exchanged
      or cancelled. Additionally, the consummation of the Proposed Tralliance
      Transaction would result in significant reductions in the Company’s cost
      structure, based upon the elimination of Tralliance’s operating expenses.
      Although substantially all of Tralliance’s revenue would also be eliminated,
      approximately 10% of Tralliance’s future net revenue through May 5, 2015 would
      essentially be retained through the contemplated net revenue earn-out provisions
      of the Proposed Tralliance Transaction. Additionally, the consummation of the
      Proposed Tralliance Transaction would increase Mr. Egan’s ownership in the
      Company to approximately 84% (assuming exercise of all outstanding stock options
      and warrants) and would significantly dilute all other existing shareholders.
      The foregoing description is preliminary in nature and there may be significant
      changes between such preliminary terms and the terms of any final definitive
      purchase agreement.





Management
      expects that the consummation of the Proposed Tralliance Transaction will
      significantly reduce the amount of net losses currently being sustained by
      the
      Company. However, management does not believe that the consummation of the
      Proposed Tralliance Transaction will, in itself, allow the Company to become
      profitable and generate operating cash flows sufficient to fund its operations
      and pay its existing current liabilities (including those liabilities related
      to
      its discontinued operations) in the foreseeable future. Accordingly, assuming
      that the Proposed Tralliance Transaction is consummated, management believes
      that additional capital infusions (although reduced in comparison with the
      amounts of capital required during the Company’s recent past) will continue to
      be needed in order for the Company to continue to operate as a going concern.





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





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





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





The
      shares of our Common Stock were delisted from the NASDAQ national market in
      April 2001 and are now traded in the over-the-counter market on what is commonly
      referred to as the electronic bulletin board or OTCBB. Since the trading price
      of our Common Stock is less than $5.00 per share and our net tangible assets
      are
      less than $2.0 million, trading in our Common Stock is also subject to the
      requirements of Rule 15g-9 of the Exchange Act.. Under Rule 15g-9, brokers
      who
      recommend penny stocks to persons who are not established customers and
      accredited investors, as defined in the Exchange Act, must satisfy special
      sales
      practice requirements, including requirements that they make an individualized
      written suitability determination for the purchaser; and receive the purchaser's
      written consent prior to the transaction. The Securities Enforcement Remedies
      and Penny Stock Reform Act of 1990 also requires additional disclosures in
      connection with any trades involving a penny stock, including the delivery,
      prior to any penny stock transaction, of a disclosure schedule explaining the
      penny stock market and the risks associated with that market. Such requirements
      may severely limit the market liquidity of our Common Stock and the ability
      of
      purchasers of our equity securities to sell their securities in the secondary
      market. We may also incur additional costs under state blue sky laws if we
      sell
      equity due to our delisting.




28




**CASH
      FLOW ITEMS**





**YEAR
      ENDED DECEMBER 31, 2007 COMPARED TO YEAR ENDED DECEMBER 31,
      2006**





As
      of
      December 31, 2007, we had approximately $631 thousand in cash and cash
      equivalents as compared to $5.3 million as of December 31, 2006. Net cash and
      cash equivalents used in operating activities of continuing operations were
      $3.3
      million and $5.8 million for the years ended December 31, 2007 and 2006,
      respectively. The period-to-period decrease in net cash and cash equivalents
      used in operating activities of continuing operations resulted primarily from
      the impact of lower net losses from continuing operations in 2007 compared
      to
      2006, as well as higher non-cash expenses and favorable working capital changes
      in 2007 compared to 2006. The operating activities of discontinued operations
      used approximately $3.2 million of net cash and cash equivalents during 2007
      compared to a use of $6.5 million in 2006, with such cash usage decrease due
      primarily to the shutdown of the unprofitable operations of the Company’s
      Computer Games and VoIP telephony services businesses in March
      2007.




Net
      cash
      and cash equivalents provided by investing activities were $520 thousand during
      the year ended December 31, 2007 resulting from proceeds of $380 thousand
      received from the sale of search.travel in December 2007 as well as proceeds
      received from the sale of property and equipment of discontinued operations
      throughout 2007. In the year ended December 31, 2006 $1.2 million was generated
      from investing activities As a result of the October 2005 sale of the SendTec
      business, we were required to place $1.0 million of cash in an escrow account
      to
      secure our indemnification obligations. In March 2006, pursuant to the related
      escrow agreement, $750 thousand of the escrow funds were released to the
      Company, with the remaining $250 thousand released in December 2006. The
      remaining $32 thousand in escrow funds released during 2006 represented funds
      which had been held in escrow in connection with sweepstakes promotions
      conducted by the VoIP telephony services division. In addition, during 2006,
      we
      received proceeds of $138 thousand from the sale of certain VoIP property and
      equipment and $130 thousand from the sale of our Now Playing magazine
      publication and website.





During
      2007, cash flows from financing activities of $1.25 million resulted from the
      issuance of secured convertible demand promissory notes to an entity controlled
      by the Company’s Chairman.





**YEAR
      ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31,
      2005**







As
      of
      December 31, 2006, we had approximately $5.3 million in cash and cash
      equivalents as compared to $16.5 million, excluding $1.0 million of funds held
      in escrow, as of December 31, 2005. Net cash and cash equivalents used in
      operating activities of continuing operations were $5.8 million and $5.3
      million, for the years ended December 31, 2006 and 2005, respectively. The
      operating activities of discontinued operations used approximately $6.5 million
      of net cash and cash equivalents during 2006 compared to a use of $9.4 million
      during 2005, principally reflecting decreases in operating losses incurred
      by
      our discontinued computer games and VoIP telephony services businesses in 2006
      compared to 2005.





Net
      cash
      and cash equivalents of $1.2 million were provided by investing activities
      of
      during the year ended December 31, 2006. As a result of the October 2005 sale
      of
      the SendTec business, we were required to place $1.0 million of cash in an
      escrow account to secure our indemnification obligations. In March 2006,
      pursuant to the related escrow agreement, $750 thousand of the escrow funds
      were
      released to the Company, with the remaining $250 thousand released in December
      2006. The remaining $32 thousand in escrow funds released during 2006
      represented funds which had been held in escrow in connection with sweepstakes
      promotions conducted by the VoIP telephony services division. In addition,
      during 2006, we received proceeds of $138 thousand from the sale of certain
      VoIP
      property and equipment and $130 thousand from the sale of our Now Playing
      magazine publication and website. During 2005, our continuing operations used
      a
      total of $1.2 million in investing activities, including the $1.0 million in
      funds placed in escrow as a result of the SendTec sale mentioned above and
      $280
      thousand of loans to Tralliance prior to its acquisition by the
      Company.





Cash
      proceeds related to the October 31, 2005 sale of our SendTec marketing services
      business, net of related transaction costs and cash held by SendTec of
      approximately $2.4 million which was included in the sale, totaled approximately
      $34.8 million. Immediately following the sale of the SendTec business on October
      31, 2005, we completed the redemption of approximately 28.9 million shares
      of
      our Common Stock owned by six members of management of SendTec for approximately
      $11.6 million in cash pursuant to a Redemption Agreement dated August 23, 2005.
      Approximately $7.6 million of the redemption payment was allocated to the
      SendTec sale transaction and recorded as a reduction of the gain on the sale,
      with the remaining $4.0 million of the redemption payment attributed to the
      “fair value” of the shares of theglobe’s Common Stock redeemed and recorded as
      treasury shares. The “fair value” of the shares for financial accounting
      purposes was calculated based on the closing price of the Company’s Common Stock
      as reflected on the OTCBB on August 10, 2005, the date the principal terms
      of
      the Redemption Agreement were announced publicly. The closing of the redemption
      occurred on October 31, 2005.





Cash
      and
      cash equivalents used in financing activities totaled $12 thousand and $1.2
      million for the years ended December 31, 2006 and 2005, respectively. During
      2005, we received proceeds of $4.0 million from the issuance of Convertible
      Notes and we also paid $1.4 million of outstanding debt balances. As mentioned
      above, approximately $4.0 million of the total $11.6 million cash paid for
      the
      redemption of the 28.9 million shares of our Common Stock from the former
      management of SendTec was attributed to the “fair value” of the Common Stock
      issued for financial accounting purposes.




29





**CAPITAL
      TRANSACTIONS**





On
      May
      29, 2007, Dancing Bear Investments, Inc. (“Dancing Bear”), an entity which is
      controlled by the Company’s Chairman and Chief Executive Officer, entered into a
      note purchase agreement (the “2007 Agreement”) with the Company pursuant to
      which it acquired convertible demand promissory notes (the “2007 Convertible
      Notes”) totaling $1.25 million during the year ended December 31, 2007.





The
      2007
      Convertible Demand Notes are convertible at anytime prior to payment into shares
      of the Company’s Common Stock at the rate of $0.01 per share.  The
      conversion price of the 2007 Convertible Demand Notes is subject to adjustment
      upon the occurrence of certain events, including with respect to stock splits
      or
      combinations.  Assuming full conversion of all 2007 Convertible Demand
      Notes that are outstanding at December 31, 2007 at the initial conversion rate,
      and without regard to potential anti-dilutive adjustments resulting from stock
      splits and the like, 125 million shares of Common Stock would be issued. 
The 2007 Convertible Demand Notes are due five days after demand for payment
      by
      Dancing Bear and are secured by a pledge of all of the assets of the Company
      and
      its subsidiaries, subordinate to existing liens on such assets.  The 2007
      Convertible Notes bear interest at the rate of ten percent per annum. 
Additionally, under the terms of the Agreement, the Dancing Bear was granted
      certain demand and certain “piggy-back” registration rights in the event that
      Dancing Bear exercises its option to convert any of the 2007 Convertible
      Notes.





On
      November 22, 2006, the Company entered into certain Marketing Services
      Agreements (the “Marketing Services Agreements”) with two entities whereby the
      entities agreed to market certain of the Company’s products in exchange for
      certain commissions and promotional fees and which granted the Company exclusive
      right to certain uses of a trade name in connection with certain of the
      Company’s websites. Additionally, on November 22, 2006, in connection with the
      Marketing Services Agreements, the Company entered into a Warrant Purchase
      Agreement with Carl Ruderman, the controlling shareholder of the entities.
      The
      Warrant Purchase Agreement provides for the issuance to Mr. Ruderman of one
      warrant to purchase 5 million shares of the Company’s Common Stock at an
      exercise price of $0.15 per share with a three year term and a second warrant
      to
      purchase 5 million shares of the Company’s Common Stock at an exercise price of
      $0.15 per share with a term of four years. Each warrant provides for the
      extension of the exercise term by an additional three years if certain criteria
      are met under the Marketing Services Agreements. The Warrant Purchase Agreement
      grants to Mr. Ruderman “piggy-back” registration rights with respect to the
      shares of the Company’s Common Stock issuable upon exercise of the
      warrants.





In
      connection with the issuance of the warrants, on November 22, 2006, Mr. Ruderman
      entered into a Stockholders’ Agreement with the Company’s chairman and chief
      executive officer, the Company’s president and certain of their affiliates.
      Pursuant to the Stockholders’ Agreement, Mr. Ruderman granted an irrevocable
      proxy over the shares issuable upon exercise of the warrants to E&C Capital
      Partners, LLLP and granted a right of first refusal over his shares to all
      of
      the other parties to the Stockholders’ Agreement. Mr. Ruderman also agreed to
      sell his shares under certain circumstances in which the other parties to the
      Stockholders’ Agreement have agreed to sell their respective shares. Mr.
      Ruderman was also granted the right to participate in certain sales of the
      Company’s Common Stock by the other parties to the Stockholders’
Agreement.





On
      August
      10, 2005, we entered into an Asset Purchase Agreement with RelationServe Media,
      Inc. ("RelationServe") whereby we agreed to sell all of the business and
      substantially all of the net assets of our SendTec marketing services subsidiary
      to RelationServe for $37.5 million in cash, subject to certain net working
      capital adjustments. On August 23, 2005, we entered into Amendment No. 1 to
      the
      Asset Purchase Agreement with RelationServe (the “1 st  Amendment”
      and together with the original Asset Purchase Agreement, the “Purchase
      Agreement”). On October 31, 2005, we completed the asset sale. Including
      adjustments to the purchase price related to excess working capital of SendTec
      as of the date of sale, we received an aggregate of approximately $39.9 million
      in cash pursuant to the Purchase Agreement. In accordance with the terms of
      an
      escrow agreement established as a source to secure our indemnification
      obligations under the Purchase Agreement, $1.0 million of the purchase price
      and
      an aggregate of 2,272,727 shares of theglobe’s unregistered Common Stock (valued
      at $750 thousand pursuant to the terms of the Purchase Agreement based upon
      the
      average closing price of the stock in the 10 day period preceding the closing
      of
      the sale) were placed into escrow. During 2006, the escrowed cash and shares
      of
      theglobe’s Common Stock were released to the Company and the common shares were
      retired.





Additionally,
      as contemplated by the Purchase Agreement, immediately following the asset
      sale,
      we completed the redemption of 28,879,097 shares of our Common Stock owned
      by
      six members of management of SendTec for approximately $11.6 million in cash
      pursuant to a Redemption Agreement dated August 23, 2005. The 28,879,097 common
      shares redeemed were retired effective October 31, 2005. Pursuant to a separate
      Termination Agreement, we also terminated and canceled 1,275,783 stock options
      and the contingent interest in 2,062,785 earn-out warrants held by the six
      members of management in exchange for approximately $400 thousand in cash.
      We
      also terminated 829,678 stock options of certain other non-management employees
      of SendTec and entered into bonus arrangements with a number of other
      non-management SendTec employees for amounts totaling approximately $600
      thousand.





The
      Company originally acquired SendTec on September 1, 2004. In exchange for all
      of
      the issued and outstanding shares of capital stock of SendTec, the Company
      paid
      consideration consisting of: (i) $6 million in cash, excluding transaction
      costs, (ii) the issuance of an aggregate of 17,500,024 shares of the Company’s
      Common Stock, (iii) the issuance of an aggregate of 175,000 shares of Series
      H
      Automatically Converting Preferred Stock (which was converted into 17,500,500
      shares of the Company’s Common Stock effective December 1, 2004, the effective
      date of the amendment to the Company’s certificate of incorporation increasing
      its authorized shares of Common Stock from 200,000,000 shares to 500,000,000
      shares), and (iv) the issuance of a subordinated promissory note in the amount
      of approximately $1 million.




30





On
      May 9,
      2005, we exercised our option to acquire all of the outstanding capital stock
      of
      Tralliance. The purchase price consisted of the issuance of 2 million shares
      of
      our Common Stock, warrants to acquire 475 thousand shares of our Common Stock
      and $40 thousand in cash. The warrants are exercisable for a period of five
      years at an exercise price of $0.11 per share. As part of the transaction,
      10
      thousand shares of our Common Stock were also issued to a third party in payment
      of a finder’s fee resulting from the acquisition. The Common Stock issued as a
      result of the acquisition of Tralliance is entitled to certain "piggy-back"
      registration rights.





On
      April
      22, 2005, E&C Capital Partners, LLLP and E&C Capital Partners II, LLLP
      (the "E&C Partnerships"), entities controlled by the Company's Chairman and
      Chief Executive Officer, entered into a note purchase agreement (the "2005
      Agreement") with theglobe pursuant to which they acquired secured demand
      convertible promissory notes (the "2005 Convertible Notes") in the aggregate
      principal amount of $1.5 million. Under the terms of the 2005 Agreement, the
      E&C Partnerships were also granted the optional right, for a period of 90
      days from the date of the 2005 Agreement, to purchase additional 2005
      Convertible Notes such that the aggregate principal amount of 2005 Convertible
      Notes issued under the 2005 Agreement could total $4.0 million (the "2005
      Option"). On June 1, 2005, the E&C Partnerships exercised a portion of the
      2005 Option and acquired an additional $1.5 million of 2005 Convertible Notes.
      On July 18, 2005, the E&C Partnerships exercised the remainder of the 2005
      Option and acquired an additional $1.0 million of 2005 Convertible
      Notes.





The
      2005
      Convertible Demand Notes are convertible at the option of the E&C
      Partnerships into shares of our Common Stock at an initial price of $0.05 per
      share. Through December 31, 2007, an aggregate of $600 thousand of 2005
      Convertible Notes were converted by the E&C Partnerships into an aggregate
      of 12 million shares of our Common Stock. Assuming full conversion of all
      Convertible Notes which remain outstanding as of December 31, 2007, an
      additional 68 million shares of our Common Stock would be issued to the E&C
      Partnerships. The 2005 Convertible Notes provide for interest at the rate of
      ten
      percent per annum and are secured by a pledge of substantially all of the assets
      of the Company. The 2005 Convertible Notes are due and payable five days after
      demand for payment by the E&C Partnerships.





**CONTRACTUAL
      OBLIGATIONS**





The
      following table summarizes theglobe’s contractual obligations as of December 31,
      2007. These contractual obligations are more fully disclosed in Note 8, “Debt,”
and Note 12, “Commitments,” in the accompanying Notes to Consolidated Financial
      Statements.








Payments
                Due By PeriodLess
                than
            
            
            
            
            
            AfterTotal
            
            1
                year
            
            1-3
                years
            
            4-5
                years
            
            5
                yearsNotes
                payable*
            
            $
            4,650,000
            
            $
            4,650,000
            
            $
            —
            
            $
            —
            
            $
            —Registry
                commitments
            
            
            959,000
            
            
            235,000
            
            
            220,000
            
            
            220,000
            
            
            284,000Operating
                leases
            
            
            11,500
            
            
            6,900
            
            
            4,600
            
            
            —
            
            
            —Total
                contractual obligations
            
            $
            5,620,500
            
            $
            4,891,900
            
            $
            224,600
            
            $
            220,000
            
            $
            284,000





*
      Excludes accrued and unpaid interest of approximately $955,000 as of December
      31, 2007.





**OFF-BALANCE
      SHEET ARRANGEMENTS**





As
      of
      December 31, 2007, we did not have any material off-balance sheet arrangements
      that have or are reasonably likely to have a material effect on our current
      or
      future financial condition, revenues or expenses, results of operations,
      liquidity, or capital resources.





**EFFECTS
      OF INFLATION**





Due
      to
      relatively low levels of inflation in 2007, 2006 and 2005, inflation has not
      had
      a significant effect on our results of operations.





**MANAGEMENT'S
      DISCUSSION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES**





The
      preparation of our financial statements in conformity with accounting principles
      generally accepted in the United States of America requires us to make estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenue and expenses during the reporting
      period. At December 31, 2007, a significant portion of our net liabilities
      of
      discontinued operations relate to charges that have been disputed by the Company
      and for which estimates have been required. Our estimates, judgments and
      assumptions are continually evaluated based on available information and
      experience. Because of the use of estimates inherent in the financial reporting
      process, actual results could differ from those estimates.




31





Certain
      of our accounting policies require higher degrees of judgment than others in
      their application. These include revenue recognition, valuation of accounts
      receivable, valuation of intangible and other long-lived assets and
      capitalization of computer software costs. Our accounting policies and
      procedures related to these areas are summarized below.





**REVENUE
      RECOGNITION**





The
      Company's revenue from continuing operations was derived principally from the
      sale of Internet domain registrations. There is no certainty that events beyond
      anyone's control such as economic downturns or significant decreases in the
      demand for our Internet domain registration services will not occur and
      accordingly, cause significant decreases in revenue. Internet services net
      revenue consists principally of registration fees for Internet domain
      registrations, which generally have terms of one year, but may be up to ten
      years. Such registration fees are reported net of transaction fees paid to
      an
      unrelated third party which serves as the registry operator for the Company.
      Net
      registration fee revenue is recognized on a straight line basis over the
      registrations term.







**VALUATION
      OF ACCOUNTS RECEIVABLE**





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





**LONG-LIVED
      ASSETS**





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





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





**CAPITALIZATION
      OF COMPUTER SOFTWARE COSTS**





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





**IMPACT
      OF RECENTLY ISSUED ACCOUNTING STANDARDS**




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





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





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




32





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





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This
      standard defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles and expands disclosure about fair
      value
      measurements. SFAS No. 157 applies to other accounting standards that require
      or
      permit fair value measurements. Accordingly, this statement does not require
      any
      new fair value measurement. This statement is effective for fiscal years
      beginning after November 15, 2007 and interim periods within those fiscal years.
      We are currently evaluating the requirements of SFAS No. 157 and have not
      determined the impact on our consolidated financial statements.





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





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





**ITEM
      7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





Interest
      Rate Risk. Interest rate risk refers to fluctuations in the value of a security
      resulting from changes in the general level of interest rates. Investments
      that
      we classify as cash and cash equivalents have original maturities of three
      months or less and therefore, are not affected in any material respect by
      changes in market interest rates. At December 31, 2007, debt was composed of
      $4.65 million of fixed rate instruments due to affiliates on demand with an
      aggregate average interest rate of 10.0%.





Foreign
      Currency Risk. We transact business in U.S. dollars. Foreign currency exchange
      rate fluctuations do not have a material effect on our results of
      operations.




33


**ITEM
      8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**




**CONSOLIDATED
      FINANCIAL STATEMENTS**




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




**INDEX
      TO FINANCIAL STATEMENTS**




PAGEREPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            
            F-2CONSOLIDATED
                FINANCIAL STATEMENTSBALANCE
                SHEETS
            
            F-3STATEMENTS
                OF OPERATIONS
            
            F-4STATEMENTS
                OF STOCKHOLDERS' EQUITY (DEFICIT) AND COMPREHENSIVEINCOME
                (LOSS)
            
            F-5STATEMENTS
                OF CASH FLOWS
            
            F-6NOTES
                TO FINANCIAL STATEMENTS
            
            F-8





F-1




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**




Board
      of
      Directors and Stockholders


theglobe.com,
      inc. and Subsidiaries





We
      have
      audited the accompanying consolidated balance sheets of theglobe.com, inc.
      and
      Subsidiaries as of December 31, 2007 and 2006, and the related consolidated
      statements of operations, stockholders' equity and comprehensive income (loss),
      and cash flows for each of the years in the three-year period ended December
      31,
      2007. These consolidated financial statements are the responsibility of the
      Company's management. Our responsibility is to express an opinion on these
      consolidated financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. The Company
      is not required to have, nor were we engaged to perform, an audit of its
      internal control over financial reporting. Our audits included consideration
      of
      internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the Company’s internal control
      over financial reporting. Accordingly, we express no such opinion. An audit
      also
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the financial statements, assessing the accounting principles
      used and significant estimates made by management, as well as evaluating the
      overall financial statement presentation. We believe that our audits provide
      a
      reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of theglobe.com,
      inc. and Subsidiaries as of December 31, 2007 and 2006, and the consolidated
      results of its operations and its cash flows for each of the years in the
      three-year period ended December 31, 2007, in conformity with accounting
      principles generally accepted in the United States.





The
      accompanying 2007 consolidated financial statements have been prepared assuming
      that the Company will continue as a going concern. As discussed in Note 2 to
      the
      consolidated financial statements, the Company has suffered recurring net losses
      and has a significant deficit that raise substantial doubt about its ability
      to
      continue as a going concern. Management’s plans in regard to these matters are
      also described in Note 2. The consolidated financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty.





**RACHLIN
      LLP**




Fort
      Lauderdale, Florida


March
      26,
      2008




F-2


**THEGLOBE.COM,
                  INC. AND SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEETS**
  December
                  31,
              
              December
                  31,2007
              
              2006ASSETSCurrent
                  Assets:Cash
                  and cash equivalents
              
              $
              631,198
              
              $
              5,316,218Due
                  from affiliate
              
              
              412,050
              
              
              -Accounts
                  receivable
              
              
              12,213
              
              
              45,870Prepaid
                  expenses
              
              
              173,794
              
              
              358,701Other
                  current assets
              
              
              8,735
              
              
              13,001Net
                  assets of discontinued operations
              
              
              30,000
              
              
              960,280Total
                  current assets
              
              
              1,267,990
              
              
              6,694,070Property
                  and equipment, net
              
              
              35,748
              
              
              144,216Intangible
                  assets, net
              
              
              368,777
              
              
              526,824Other
                  assets
              
              
              40,000
              
              
              40,000Total
                  assets
              
              $
              1,712,515
              
              $
              7,405,110LIABILITIES
                  AND STOCKHOLDERS' DEFICITCurrent
                  Liabilities:Accounts
                  payable
              
              $
              682,829
              
              $
              507,578Accrued
                  expenses
              
              
              1,989,106
              
              
              1,484,669Deferred
                  revenue
              
              
              1,443,589
              
              
              1,222,705Notes
                  payable due to affiliates
              
              
              4,650,000
              
              
              3,400,000Net
                  liabilities of discontinued operations
              
              
              1,902,344
              
              
              5,160,872Total
                  current liabilities
              
              
              10,667,868
              
              
              11,775,824Deferred
                  revenue
              
              
              401,248
              
              
              232,433Total
                  liabilities
              
              
              11,069,116
              
              
              12,008,257Stockholders'
                  Deficit:Common
                  stock, $0.001 par value; 500,000,000shares
                  authorized; 172,484,838 sharesissued
                  at December 31, 2007 and at
              
              
              172,485
              
              
              172,485December
                  31,2006Additional
                  paid in capital
              
              
              290,486,232
              
              
              289,088,557Accumulated
                  deficit
              
              
              (300,015,318
              )
              
              (293,864,189
              )Total
                  stockholders' deficit
              
              
              (9,356,601
              )
              
              (4,603,147
              )Total
                  liabilities and stockholders' deficit
              
              $
              1,712,515
              
              $
              7,405,110





See
      notes
      to consolidated financial statements.




F-3


**THEGLOBE.COM,
                  INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF OPERATIONS**
  Year
                  Ended December 31,2007
              
              2006
              
              2005Net
                  Revenue
              
              $
              2,230,270
              
              $
              1,408,737
              
              $
              197,873Operating
                  Expenses:Cost
                  of revenue
              
              
              420,129
              
              
              454,563
              
              
              86,486Sales
                  and marketing
              
              
              1,905,486
              
              
              3,109,533
              
              
              488,275General
                  and administrative
              
              
              3,886,025
              
              
              4,471,848
              
              
              6,750,225Depreciation
              
              
              81,606
              
              
              73,980
              
              
              48,509Intangible
                  asset amortization
              
              
              158,047
              
              
              188,211
              
              
              75,201Total
                  Operating Expenses
              
              
              6,451,293
              
              
              8,298,135
              
              
              7,448,696Operating
                  Loss from Continuing Operations
              
              
              (4,221,023
              )
              
              (6,889,398
              )
              
              (7,250,823
              )Other
                  Income (Expenses), net:Interest
                  income (expense), net
              
              
              (1,590,795
              )
              
              121,114
              
              
              (4,138,781
              )Other
                  income (expense), net
              
              
              389,929
              
              
              21,130
              
              
              (280,000
              )(1,200,866
              )
              
              142,244
              
              
              (4,418,781
              )Loss
                  from Continuing Operations Before Income Tax
              
              
              (5,421,889
              )
              
              (6,747,154
              )
              
              (11,669,604
              )Income
                  Tax Provision (Benefit)
              
              
              -
              
              
              124,313
              
              
              (7,795,538
              )Loss
                  from Continuing Operations
              
              
              (5,421,889
              )
              
              (6,871,467
              )
              
              (3,874,066
              )Discontinued
                  Operations, net of tax:Loss
                  from operations
              
              
              (729,240
              )
              
              (10,102,261
              )
              
              (9,405,513
              )Gain
                  on sale of discontinued operations
              
              
              -
              
              
              -
              
              
              1,769,531Loss
                  from Discontinued Operations
              
              
              (729,240
              )
              
              (10,102,261
              )
              
              (7,635,982
              )Net
                  Loss
              
              $
              (6,151,129
              )
              $
              (16,973,728
              )
              $
              (11,510,048
              )Earnings
                  (Loss) Per Share:Basic
                  and Diluted:Continuing
                  Operations
              
              $
              (0.03
              )
              $
              (0.04
              )
              $
              (0.02
              )Discontinued
                  Operations
              
              $
              (0.01
              )
              $
              (0.06
              )
              $
              (0.04
              )Net
                  Loss
              
              $
              (0.04
              )
              $
              (0.10
              )
              $
              (0.06
              )Weighted
                  Average Common Shares Outstanding
              
              
              172,485,000
              
              
              174,674,000
              
              
              182,539,000




See
      notes
      to consolidated financial statements.




F-4


**THEGLOBE.COM,
                  INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)****AND
                  COMPREHENSIVE INCOME (LOSS)**
 AdditionalPreferred
                
                Common
                    Stock
                
                Paid-in
                
                Escrow
                
                Treasury
                
                AccumulatedStock
                
                Shares
                
                Amount
                
                Capital
                
                Shares
                
                Stock
                
                Deficit
                
                TotalBalance,
                    December 31, 2004
                
                $
                -
                
                
                174,315,678
                
                $
                174,316
                
                $
                282,289,404
                
                $
                -
                
                $
                (371,458
                )
                $
                (260,574,874
                )
                $
                21,517,388Year
                    Ended December 31, 2005:Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (11,510,048
                )
                
                (11,510,048
                )Issuance
                    of common stock:Settlement
                    of contractualobligation
                
                
                -
                
                
                300,000
                
                
                300
                
                
                73,950
                
                
                -
                
                
                -
                
                
                -
                
                
                74,250Acquisition
                    of Tralliance
                
                
                -
                
                
                2,010,000
                
                
                2,010
                
                
                196,877
                
                
                -
                
                
                -
                
                
                -
                
                
                198,887Conversion
                    of convertible notes
                
                
                -
                
                
                12,000,000
                
                
                12,000
                
                
                588,000
                
                
                -
                
                
                -
                
                
                -
                
                
                600,000Exercise
                    of stock options
                
                
                -
                
                
                2,001,661
                
                
                2,001
                
                
                164,840
                
                
                -
                
                
                -
                
                
                -
                
                
                166,841Exercise
                    of warrants
                
                
                -
                
                
                11,051,403
                
                
                11,051
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                11,051Beneficial
                    conversion featuresof2005
                    Convertible Notes
                
                
                -
                
                
                -
                
                
                -
                
                
                4,000,000
                
                
                -
                
                
                -
                
                
                -
                
                
                4,000,000Employee
                    stock-based compensation
                
                
                -
                
                
                -
                
                
                -
                
                
                48,987
                
                
                -
                
                
                -
                
                
                -
                
                
                48,987Issuance
                    of stock options tonon-employees
                
                
                -
                
                
                -
                
                
                -
                
                
                176,050
                
                
                -
                
                
                -
                
                
                -
                
                
                176,050Stock-based
                    compensationrelated
                    to SendTec
                
                
                -
                
                
                -
                
                
                -
                
                
                455,054
                
                
                -
                
                
                -
                
                
                -
                
                
                455,054Issuance
                    of escrow shares
                
                
                -
                
                
                2,272,727
                
                
                2,273
                
                
                747,727
                
                
                (750,000
                )
                
                -
                
                
                -
                
                
                -Redemption
                    of common stock
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (4,043,074
                )
                
                -
                
                
                (4,043,074
                )Repurchase
                    of vested stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (420,585
                )
                
                (420,585
                )Retirement
                    of treasury stock
                
                
                -
                
                
                (29,578,378
                )
                
                (29,578
                )
                
                -
                
                
                -
                
                
                4,414,532
                
                
                (4,384,954
                )
                
                -Balance,
                    December 31, 2005
                
                
                -
                
                
                174,373,091
                
                
                174,373
                
                
                288,740,889
                
                
                (750,000
                )
                
                -
                
                
                (276,890,461
                )
                
                11,274,801Year
                    Ended December 31, 2006:Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (16,973,728
                )
                
                (16,973,728
                )Issuance
                    of common stock forservices
                    rendered
                
                
                -
                
                
                35,000
                
                
                35
                
                
                3,115
                
                
                -
                
                
                -
                
                
                -
                
                
                3,150Issuance
                    of warrants
                
                
                -
                
                
                -
                
                
                -
                
                
                515,262
                
                
                -
                
                
                -
                
                
                -
                
                
                515,262Exercise
                    of stock options
                
                
                -
                
                
                349,474
                
                
                350
                
                
                18,070
                
                
                -
                
                
                -
                
                
                -
                
                
                18,420Employee
                    stock-based compensation
                
                
                -
                
                
                -
                
                
                -
                
                
                449,749
                
                
                -
                
                
                -
                
                
                -
                
                
                449,749Issuance
                    of stock options tonon-employees
                
                
                -
                
                
                -
                
                
                -
                
                
                109,199
                
                
                -
                
                
                -
                
                
                -
                
                
                109,199Retirement
                    of escrow shares
                
                
                -
                
                
                (2,272,727
                )
                
                (2,273
                )
                
                (747,727
                )
                
                750,000
                
                
                -
                
                
                -
                
                
                -Balance,
                    December 31, 2006
                
                
                -
                
                
                172,484,838
                
                
                172,485
                
                
                289,088,557
                
                
                -
                
                
                -
                
                
                (293,864,189
                )
                
                (4,603,147
                )Year
                    Ended December 31, 2007:Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (6,151,129
                )
                
                (6,151,129
                )Employee
                    stock-based compensation
                
                
                -
                
                
                -
                
                
                -
                
                
                140,549
                
                
                -
                
                
                -
                
                
                -
                
                
                140,549Issuance
                    of stock options tonon-employees
                
                
                -
                
                
                -
                
                
                -
                
                
                7,126
                
                
                -
                
                
                -
                
                
                -
                
                
                7,126Beneficial
                    conversion featuresof
                    2007 Convertible Notes
                
                
                -
                
                
                -
                
                
                -
                
                
                1,250,000
                
                
                -
                
                
                -
                
                
                -
                
                
                1,250,000Balance,
                    December 31, 2007
                
                $
                -
                
                
                172,484,838
                
                $
                172,485
                
                $
                290,486,232
                
                $
                -
                
                $
                -
                
                $
                (300,015,318
                )
                $
                (9,356,601
                )


See
      notes
      to consolidated financial statements.




F-5


**THEGLOBE.COM,
                  INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF CASH FLOW**
  Year
                    ended December 31,2007
              
              2006
              
              2005Cash
                  Flows from Operating Activities:Net
                  loss
              
              $
              (6,151,129
              )
              $
              (16,973,728
              )
              $
              (11,510,048
              )Loss
                  from discontinued operations
              
              
              729,240
              
              
              10,102,261
              
              
              7,635,982Net
                  loss from continuing operations
              
              
              (5,421,889
              )
              
              (6,871,467
              )
              
              (3,874,066
              )Adjustments
                  to reconcile net loss from continuing operationsto
                  net cash flows from operating activities:Depreciation
                  and amortization
              
              
              239,653
              
              
              262,191
              
              
              123,710Non-cash
                  interest expense
              
              
              1,250,000
              
              
              -
              
              
              4,000,000Employee
                  stock compensation expense
              
              
              140,549
              
              
              449,749
              
              
              48,987Stock
                  compensation to non-employees
              
              
              7,126
              
              
              109,199
              
              
              176,090Gain
                  on sale of search.travel
              
              
              (379,791
              )
              
              -
              
              
              -Non-cash
                  expense related to the issuance of warrants
              
              
              -
              
              
              515,262
              
              
              -Reserve
                  against amounts loaned Tralliance prior to acquisition
              
              
              -
              
              
              -
              
              
              280,000Deferred
                  tax benefit
              
              
              -
              
              
              -
              
              
              (7,795,538
              )Other,
                  net
              
              
              (209
              )
              
              (17,980
              )
              
              (130,366
              )Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              33,657
              
              
              (45,870
              )
              
              -Prepaid
                  and other current assets
              
              
              (222,877
              )
              
              172,861
              
              
              (284,931
              )Accounts
                  payable
              
              
              175,251
              
              
              (221,125
              )
              
              474,367Accrued
                  expenses and other current liabilities
              
              
              504,437
              
              
              206,060
              
              
              674,438Income
                  taxes payable
              
              
              -
              
              
              (806,406
              )
              
              -Deferred
                  revenue
              
              
              389,699
              
              
              398,119
              
              
              1,057,019Net
                  cash flows from operating activities of continuing
                  operations
              
              
              (3,284,394
              )
              
              (5,849,407
              )
              
              (5,250,290
              )Net
                  cash flows from operating activities of discontinued
                  operations
              
              
              (3,171,074
              )
              
              (6,516,469
              )
              
              (9,402,722
              )Net
                  cash flows from operating activities
              
              
              (6,455,468
              )
              
              (12,365,876
              )
              
              (14,653,012
              )Cash
                  Flows from Investing Activities:Purchases
                  of property and equipment
              
              
              (26,345
              )
              
              (74,003
              )
              
              (119,862
              )Proceeds
                  from the sale of search.travel
              
              
              380,000
              
              
              -
              
              
              -Net
                  cash balances released from/ (placed in) escrow
              
              
              -
              
              
              1,031,764
              
              
              (938,357
              )Amounts
                  loaned to Tralliance prior to acquisition
              
              
              -
              
              
              -
              
              
              (280,000
              )Other,
                  net
              
              
              -
              
              
              -
              
              
              119,814Net
                  cash flows from investing activities of continuing
                  operations
              
              
              353,655
              
              
              957,761
              
              
              (1,218,405
              )Net
                  cash flows from investing activities of discontinued
                  operations:Net
                  proceeds from sale of SendTec
              
              
              -
              
              
              -
              
              
              34,762,384Redemption
                  agreement payment allocation to SendTec sale
              
              
              -
              
              
              -
              
              
              (7,560,872
              )Proceeds
                  from the sale of property and equipment
              
              
              166,793
              
              
              137,626
              
              
              -Purchases
                  of property and equipment by discontinued operations
              
              
              -
              
              
              (12,155
              )
              
              (360,423
              )Proceeds
                  from the sale of the Now Playing magazine
              
              
              -
              
              
              130,000
              
              
              -Net
                  cash flows from investing activities
              
              
              520,448
              
              
              1,213,232
              
              
              25,622,684Cash
                  Flows from Financing Activities:Borrowing
                  on notes payable
              
              
              1,250,000
              
              
              -
              
              
              4,000,000Payments
                  on notes payable and long-term debt
              
              
              -
              
              
              (30,218
              )
              
              (1,358,623
              )Redemption
                  of common stock
              
              
              -
              
              
              -
              
              
              (4,043,074
              )Proceeds
                  from exercise of stock options and warrants
              
              
              -
              
              
              18,420
              
              
              177,892Net
                  cash flows from financing activities
              
              
              1,250,000
              
              
              (11,798
              )
              
              (1,223,805
              )Net
                  change in cash & equivalents
              
              
              (4,685,020
              )
              
              (11,164,442
              )
              
              9,745,867Cash
                  & equivalents at beginning of period
              
              
              5,316,218
              
              
              16,480,660
              
              
              6,734,793Cash
                  & equivalents at end of period
              
              $
              631,198
              
              $
              5,316,218
              
              $
              16,480,660





See
      notes
      to consolidated financial statements.




F-6


**THEGLOBE.COM,
                  INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS**
  (Continued)Year
                    Ended December 31,2007
                
                2006
                
                2005Supplemental
                    Disclosure of Cash Flow Information:Cash
                    paid during the period for:Interest
                
                $
                3,903
                
                $
                12,958
                
                $
                87,140Income
                    taxes
                
                $
                -
                
                $
                930,719
                
                $
                -Supplemental
                    Disclosure of Non-Cash Transactions:Conversion
                    of debt and equity securities into common stock
                
                $
                -
                
                $
                -
                
                $
                600,000Additional
                    paid-in capital attributable to the beneficial conversionfeatures
                    of debt and equity securities
                
                $
                1,250,000
                
                $
                -
                
                $
                4,000,000Common
                    stock and warrants issued in connection with theacquisition
                    of Tralliance Corporation
                
                $
                -
                
                $
                -
                
                $
                198,887Common
                    stock issued in connection with the settlement of acontractual
                    obligation
                
                $
                -
                
                $
                -
                
                $
                74,250


See
        notes
        to consolidated financial statements.
  F-7




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





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007, 2006 and 2005**




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





**DESCRIPTION
      OF THE COMPANY**





theglobe.com,
      inc. (the "Company" or "theglobe") was incorporated on May 1, 1995 (inception)
      and commenced operations on that date. Originally, theglobe.com was an online
      community with registered members and users in the United States and abroad.
      That product gave users the freedom to personalize their online experience
      by
      publishing their own content and by interacting with others having similar
      interests. However, due to the deterioration of the online advertising market,
      the Company was forced to restructure and ceased the operations of its online
      community on August 15, 2001. The Company then sold most of its remaining online
      and offline properties. The Company continued to operate its Computer Games
      print magazine and the associated CGOnline website ( www.cgonline.com ), as
      well as the e-commerce games distribution business of Chips & Bits, Inc. ( www.chipsbits.com ). On
      June 1, 2002, Chairman Michael S. Egan and Director Edward A. Cespedes became
      Chief Executive Officer and President of the Company, respectively.





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





On
      May
      28, 2003, the Company acquired Direct Partner Telecom, Inc. ("DPT"), a company
      engaged in VoIP telephony services in exchange for 1,375,000 shares of the
      Company's Common Stock and the issuance of warrants to acquire 500,000 shares
      of
      the Company's Common Stock. The Company acquired all of the physical assets
      and
      intellectual property of DPT and originally planned to continue to operate
      the
      company as a subsidiary and engage in the provision of VoIP services to other
      telephony businesses on a wholesale transactional basis. In the first quarter
      of
      2004, the Company decided to suspend DPT's wholesale business and dedicate
      the
      DPT physical and intellectual assets to its retail VoIP business.





On
      September 1, 2004, the Company acquired SendTec, Inc. ("SendTec"), a direct
      response marketing services and technology company for a total purchase price
      of
      approximately $18,400,000. As more fully discussed in Note 3, "Discontinued
      Operations”, on October 31, 2005, the Company completed the sale of all of the
      business and substantially all of the net assets of SendTec for approximately
      $39,850,000 in cash.





As
      more
      fully discussed in Note 4, “Acquisition of Tralliance Corporation,” on May 9,
      2005, the Company exercised its option to acquire Tralliance Corporation
      (“Tralliance”), a company which had recently entered into an agreement to become
      the registry for the “.travel” top-level Internet domain. The Company issued
      2,000,000 shares of its Common Stock, warrants to acquire 475,000 shares of
      its
      Common Stock and paid $40,000 in cash to acquire Tralliance.





As
      more
      fully discussed in Note 3, “Discontinued Operations”, in March 2007, management
      and the Board of Directors of the Company made the decision to cease all
      activities related to its Computer Games businesses, including discontinuing
      the
      operations of its magazine publications, games distribution business and related
      websites. In addition, in March 2007, management and the Board of Directors
      of
      the Company decided to discontinue the operating, research and development
      activities of its VoIP telephony services business and terminate all of the
      remaining employees of that business.





As
      of
      December 31, 2007, the Company managed a single line of business, Internet
      Services, consisting of Tralliance. See Note 16, “Subsequent Events,” regarding
      a proposed transaction whereby the Company would sell its Tralliance subsidiary
      and issue approximately 269,000,000 shares of its common stock to a company
      controlled by Michael S. Egan, the Company’s Chairman and Chief Executive
      Officer.





**PRINCIPLES
      OF CONSOLIDATION**





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




**USE
      OF ESTIMATES**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires management to make estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      the disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenue and expenses during the reporting
      period. These estimates and assumptions relate to estimates of collectability
      of
      accounts receivable, the valuations of fair values of options and warrants,
      the
      impairment of long-lived assets, accounts payable and accrued expenses and
      other
      factors. Actual results could differ from those estimates. In addition, the
      accompanying consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      on
      a going concern basis, which contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business (See Note 2, “Going
      Concern Considerations”).




F-8





**CASH
      AND CASH EQUIVALENTS**





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





**MARKETABLE
      SECURITIES**





The
      Company accounts for its investment in debt and equity securities at amortized
      cost in accordance with Statement of Financial Accounting Standards ("SFAS")
      No.
      115, "Accounting for Certain Investments in Debt and Equity Securities." At
      December 31, 2007 the Company had no investments in debt or equity securities.
      At December 31, 2006, the Company had investments in Commercial Paper that
      were
      classified as held-to-maturity totaling $995,561 at cost and $999,704 on an
      amortized cost basis. During the years ended December 31, 2007, 2006 and 2005,
      the Company had no significant gross realized gains or losses on sales of
      securities.





**DUE
      FROM AFFILIATE**





Due
      from
      affiliate at December 31, 2007 consists of receivables totaling $412,050 due
      from a related party in connection with a Bulk Registration Co-Marketing
      Agreement entered into between such related party and the Company in December
      2007 (see Note 14, “Related Party Transactions” for further details). The
      $412,050 related party receivable was collected in full during the first quarter
      of 2008.





**PREPAID
      EXPENSES**





Prepaid
      expenses consist primarily of fees paid to Tralliance third party service
      providers for various services related to domain name registrations. Fees for
      some of these services vary based on transaction levels or transaction types.
      Such fees are amortized to cost of revenue over the term of the related domain
      name registration. Prepaid expenses also consist of prepaid costs paid for
      insurance, travel, and technology licenses, which are amortized to expense
      based
      upon the terms of the underlying service contracts.





**FAIR
      VALUE OF FINANCIAL INSTRUMENTS**





The
      carrying amount of certain of the Company's financial instruments, including
      cash, cash equivalents, restricted cash, marketable securities, accounts
      receivable, accounts payable, accrued expenses and short-term deferred revenue,
      approximate their fair value at December 31, 2007 and 2006 due to their short
      maturities.




**LONG-LIVED
      ASSETS**





Long-lived
      assets, including property and equipment and intangible assets subject to
      amortization are reviewed for impairment whenever events or changes in
      circumstances indicate that the carrying amount of an asset may not be
      recoverable, in accordance with SFAS No. 144, "Accounting for the Impairment
      or
      Disposal of Long-Lived Assets." If events or changes in circumstances indicate
      that the carrying amount of an asset, or an appropriate grouping of assets,
      may
      not be recoverable, the Company estimates the undiscounted future cash flows
      to
      result from the use of the asset, or asset group. If the sum of the undiscounted
      cash flows is less than the carrying value, the Company recognizes an impairment
      loss, measured as the amount by which the carrying value exceeds the fair value
      of the assets. Fair values are based on quoted market values, if available.
      If
      quoted market values are not available, the estimate of fair value may be based
      on the discounted value of the estimated future cash flows attributable to
      the
      assets, or other valuation techniques deemed reasonable in the
      circumstances.





Long-lived
      assets are stated
      at cost, net of accumulated depreciation and amortization. Long-lived assets
      are
      depreciated using the straight-line method over the estimated useful lives
      of
      the related assets, as follows:





Estimated
                Useful LivesCapitalized
                software
              Equipment
              Furniture
                and fixtures
              Leasehold
                improvements
              Intangible
                assets
            
            
            3
                years
              3
                years
              3-7
                years
              3-4
                years
              5
                years




F-9




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





**CONCENTRATION
      OF CREDIT RISK**





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




**REVENUE
      RECOGNITION**





***Continuing
      Operations***





**INTERNET
      SERVICES**





Internet
      services revenue consists of registration fees for Internet domain
      registrations, which generally have terms of one year, but may be up to ten
      years. Such registration fees are reported net of transaction fees paid to
      an
      unrelated third party which serves as the registry operator for the Company.
      Payments of registration fees are deferred when initially received and
      recognized as revenue on a straight-line basis over the registrations’
terms.





Advertising
      on the Company’s www.search.travel website
      was generally sold at a flat rate for a stated time period and was recognized
      on
      a straight-line basis over the term of the advertising contract.





***Discontinued
      Operations***





**COMPUTER
      GAMES BUSINESSES**





Advertising
      revenue from the sale of print advertisements under short-term contracts in
      the
      Company’s magazine publications was recognized at the on-sale date of the
      magazines.





Newsstand
      sales of the Company’s magazine publications were recognized at the on-sale date
      of the magazines, net of provisions for estimated returns. Subscription revenue,
      net of agency fees, was deferred when initially received and recognized as
      income ratably over the subscription term.





Sales
      of
      games and related products from the Company’s online store were recognized as
      revenue when the product was shipped to the customer. Amounts billed to
      customers for shipping and handling charges were included in net revenue. The
      Company provided an allowance for returns of merchandise sold through its online
      store.





**VOIP
      TELEPHONY SERVICES**





VoIP
      telephony services revenue represented fees charged to customers for voice
      services and was recognized based on minutes of customer usage or as services
      were provided. The Company recorded payments received in advance for prepaid
      services as deferred revenue until the related services were
      provided.





***MARKETING
      SERVICES***





Revenue
      from the distribution of Internet advertising was recognized when Internet
      users
      visited and completed actions at an advertiser's website. Revenue consisted
      of
      the gross value of billings to clients, including the recovery of costs incurred
      to acquire online media required to execute client campaigns. Recorded revenue
      was based upon reports generated by the Company's tracking
      software.




Revenue
      derived from the purchase and tracking of
      direct response media, such as television and radio commercials, was recognized
      on a net basis when the associated media was aired. In many cases, the amount
      the Company billed to clients significantly exceeded the amount of revenue
      that
      was earned due to the existence of various "pass-through" charges such as the
      cost of the television and radio media. Amounts received in advance of media
      airings were deferred.




F-10




Revenue
      generated from the production of direct response advertising programs, such
      as
      infomercials, was recognized on the completed contract method when such programs
      were complete and available for airing. Production activities generally ranged
      from eight to twelve weeks and the Company usually collected amounts in advance
      and at various points throughout the production process. Amounts received from
      customers prior to completion of commercials were included in deferred revenue
      and direct costs associated with the production of commercials in process were
      deferred.





**ADVERTISING
      COSTS**





Advertising
      costs are expensed as incurred and are included in sales and marketing expense.
      Advertising costs charged to continuing operations were approximately $158,000,
      $678,000 and $59,000 for the years ended December 31, 2007, 2006 and 2005,
      respectively.





**STOCK-BASED
      COMPENSATION**





In
      December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment." This
      statement is a revision of SFAS No. 123, "Accounting for Stock-Based
      Compensation", supersedes Accounting Principles Board ("APB") Opinion No. 25,
      "Accounting for Stock Issued to Employees" and amends SFAS No. 95, “Statement of
      Cash Flows.” The statement eliminates the alternative to use the intrinsic value
      method of accounting that was provided in SFAS No. 123, which generally resulted
      in no compensation expense recorded in the financial statements related to
      the
      issuance of equity awards to employees. The statement also requires that the
      cost resulting from all share-based payment transactions be recognized in the
      financial statements. It establishes fair value as the measurement objective
      in
      accounting for share-based payment arrangements and generally requires all
      companies to apply a fair-value-based measurement method in accounting for
      share-based payment transactions with employees. The Company adopted SFAS No.
      123R effective January 1, 2006, using the modified prospective
      application method in accordance with the statement. This application requires
      the Company to record compensation expense for all awards granted to employees
      and directors after the adoption date and for the unvested portion of awards
      that are outstanding at the date of adoption. The Company’s consolidated
      financial statements as of and for the years ended December 31, 2007 and 2006,
      reflect the impact of SFAS No. 123R. In accordance with the modified prospective
      application method, the Company’s consolidated financial statements for prior
      periods have not been restated to reflect and do not include the impact of
      SFAS
      No. 123R.





Prior
      to
      January 1, 2006, the Company had historically followed SFAS No. 123, "Accounting
      for Stock-Based Compensation," which permitted entities to continue to apply
      the
      provisions of Accounting Principles Board Opinion No. 25 ("APB 25") and provide
      pro forma net earnings (loss) disclosures for employee stock option grants
      as if
      the fair-value-based method defined in SFAS No. 123 had been applied. Under
      this
      method, compensation expense was recorded on the date of grant only if the
      then
      current market price of the underlying stock exceeded the exercise price. The
      following table presents the Company's pro forma historical net loss for the
      year ended December 31, 2005 had the Company determined compensation cost based
      on the fair value at the grant date for all of its employee stock options issued
      under SFAS No. 123:




Year
                Ended
              December
                31, 2005Net
                loss - as reported
            
            $
            (11,510,048
            )Add:
                Stock-based employee compensation expense included in net loss as
                reported
            
            
            502,217Deduct:
                Total stock-based employee compensation expense determined under
                fair
                value method for all awards
            
            
            (1,242,169
            )Net
                loss - pro forma
            
            $
            (12,250,000
            )Basic
                net loss per share - as reported
            
            $
            (0.06
            )Basic
                net loss per share - pro forma
            
            $
            (0.07
            )




During
      the year ended December 31, 2007, a total of 100,000 stock options were granted
      with a per share weighted-average fair value of $0.07. During the year ended
      December 31, 2006, a total of 6,130,000 stock options were granted with a per
      share weighted-average fair value of $0.14. A total of 5,922,250 stock options
      were granted during the year ended December 31, 2005 with a per share
      weighted-average fair value of $0.10. All stock options granted during 2007,
      2006, and 2005 were granted at exercise prices which equaled the market price
      of
      the stock on the date of grant.




F-11





Fair
      values of stock options were calculated using the Black Scholes option-pricing
      method based on the assumptions noted in the following table. Expected
      volatilities are based on the historical volatility of theglobe’s Common Stock,
      over a time period that is consistent with the expected life of the option.
      Effective January 1, 2006, the Company began using the simplified method as
      allowed by SEC Staff Accounting Bulletin No. 107 to calculate the expected
      term
      of stock option grants, which is the average of the option’s weighted average
      vesting period and its contractual term. The risk fee interest rate is based
      on
      the U.S. Treasury yield in effect at the time of the grant.




Year
                Ended December 31,2007
            
            2006
            
            2005Risk-free
                interest rate
            
            
            4.85
            %
            
            4.00
                - 5.00
            %
            
            3.00
                - 4.00
            %Expected
                term / life
            
            
            6
                years
            
            
            3
                - 6 years
            
            
            3
                - 5 yearsVolatility
            
            
            115
            %
            
            115
                - 150
            %
            
            160
            %Weighted
                average volatility
            
            
            115
            %
            
            140
            %
            
            160
            %Expected
                dividend rate
            
            
            0
            
            
            0
            
            
            0





**INCOME
      TAXES**





The
      Company accounts for income taxes using the asset and liability method. Under
      this method, deferred tax assets and liabilities are recognized for the future
      tax consequences attributable to differences between the consolidated financial
      statement carrying amounts of existing assets and liabilities and their
      respective tax bases for operating loss and tax credit carryforwards. Deferred
      tax assets and liabilities are measured using enacted tax rates expected to
      apply to taxable income in the years in which those temporary differences are
      expected to be recovered or settled. The effect on deferred tax assets and
      liabilities of a change in tax rates is recognized in the consolidated results
      of operations in the period that the tax change occurs. Valuation allowances
      are
      established, when necessary, to reduce deferred tax assets to the amount
      expected to be realized.





**NET
      LOSS PER COMMON SHARE**





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





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





December
                31,2007
            
            2006
            
            2005Options
                to purchase common stock
            
            
            16,341,000
            
            
            20,143,000
            
            
            15,373,000Common
                shares issuable uponconversion
                of Convertible Notes
            
            
            193,000,000
            
            
            68,000,000
            
            
            68,000,000Common
                shares issuable upon exerciseof
                Warrants
            
            
            16,911,000
            
            
            16,911,000
            
            
            8,776,000Total
            
            
            226,252,000
            
            
            105,054,000
            
            
            92,149,000




F-12




**COMPREHENSIVE
      INCOME (LOSS)**





The
      Company reports comprehensive income (loss) in accordance with the SFAS No.
      130,
      "Reporting Comprehensive Income." Comprehensive income (loss) generally
      represents all changes in stockholders' equity during the year except those
      resulting from investments by, or distributions to, stockholders. The Company's
      comprehensive loss was approximately $6.2 million, $17.0 million and $11.5
      million for the years ended December 31, 2007, 2006 and 2005, respectively,
      which approximated the Company's reported net loss.





**RECENTLY
      ISSUED ACCOUNTING PRONOUNCEMENTS**





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





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





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





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





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This
      standard defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles and expands disclosure about fair
      value
      measurements. SFAS No. 157 applies to other accounting standards that require
      or
      permit fair value measurements. Accordingly, this statement does not require
      any
      new fair value measurement. This statement is effective for fiscal years
      beginning after November 15, 2007 and interim periods within those fiscal years.
      We are currently evaluating the requirements of SFAS No. 157 and have not
      determined the impact on our consolidated financial statements.




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





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




F-13





**RECLASSIFICATIONS**





Certain
      amounts in the prior year financial statements have been reclassified to conform
      to the current year presentation. In accordance with SFAS No. 144, “Accounting
      for the Impairment or Disposal of Long-Lived Assets”, the operations of the
      Company’s computer games, VoIP telephony services and its SendTec marketing
      services divisions have been accounted for in accordance with the provisions
      of
      SFAS No. 144 and the results of operations of these discontinued businesses
      have
      been included in income from discontinued operations for all periods
      presented.





**(2)
      GOING CONCERN CONSIDERATIONS**





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





During
      the year ended December 31, 2007, the Company was able to continue operating
      as
      a going concern due principally to funding of $1,250,000 received from the
      sale
      of secured convertible demand promissory notes to an entity controlled by
      Michael Egan, its Chairman and Chief Executive Officer. Additionally, in
      December 2007, additional funding of $380,000 was provided from the sale of
      all
      of the Company’s rights related to its www.search.travel domain name and website
      to an entity also controlled by Mr. Egan. At December 31, 2007, the Company
      had
      a net working capital deficit of approximately $9,400,000, inclusive of a cash
      and cash equivalents balance of approximately $631,000. Such working capital
      deficit included an aggregate of $4,650,000 in secured convertible demand debt
      and related accrued interest of approximately $955,000 due to entities
      controlled by Mr. Egan (See Note 8, “Debt” and Note 14, “Related Party
      Transactions” for further details). Additionally, such working capital deficit
      included approximately $1,900,000 of net liabilities of discontinued operations,
      with a significant portion of such liabilities related to charges which have
      been disputed by the Company.





Notwithstanding
      previous cost reduction actions taken by the Company and its decision to
      shutdown its unprofitable computer games and VoIP telephony services businesses
      in March 2007 (see Note 3, “Discontinued Operations” for further details), the
      Company continues to incur substantial consolidated net losses, although reduced
      in comparison with prior periods, and management believes that the Company
      will
      continue to be unprofitable in the foreseeable future. Based upon the Company’s
      current financial condition, as discussed above, and without the infusion of
      additional capital, management does not believe that the Company will be able
      to
      fund its operations beyond the end of the second quarter of 2008.





As
      more
      fully discussed in Note 16, “Subsequent Events”, on February 1, 2008, the
      Company announced that it had entered into a letter of intent to sell
      substantially all of the business and net assets of its Tralliance Corporation
      subsidiary and to issue approximately 269,000,000 shares of its common stock
      to
      an entity controlled by Mr. Egan (the “Proposed Tralliance Transaction”). In the
      event that this Proposed Tralliance Transaction is consummated, all of the
      Company’s remaining secured and unsecured debt owed to entities controlled by
      Mr. Egan (which was approximately $5,600,000 million and $400,000 at December
      31, 2007, respectively) will be exchanged or cancelled. Additionally, the
      consummation of the Proposed Tralliance Transaction would also result in
      significant reductions in the Company’s cost structure, based upon the
      elimination of Tralliance’s operating expenses. Although substantially all of
      Tralliance’s revenue would also be eliminated, approximately 10% of Tralliance’s
      future net revenue through May 5, 2015 would be essentially retained through
      the
      contemplated net revenue earn-out provisions of the Proposed Tralliance
      Transaction. Additionally, the consummation of the Proposed Tralliance
      Transaction would increase Mr. Egan’s ownership in the Company to approximately
      84% (assuming exercise of all outstanding stock options and warrants) and would
      significantly dilute all other existing shareholders. The foregoing description
      is preliminary in nature and there may be significant changes between such
      preliminary terms and the terms of any final definitive purchase
      agreement.





**MANAGEMENT’S
      PLANS**





Management
      expects that the consummation of the Proposed Tralliance Transaction will
      significantly reduce the amount of net losses currently being sustained by
      the
      Company. However, management does not believe that the consummation of the
      Proposed Tralliance Transaction will, in itself, allow the Company to become
      profitable and generate operating cash flows sufficient to fund its operations
      and pay its existing current liabilities (including those liabilities related
      to
      its discontinued operations) in the foreseeable future. Accordingly, assuming
      that the Proposed Tralliance Transaction is consummated, management believes
      that additional capital infusions (although reduced in comparison with the
      amounts of capital required during the Company’s recent past) will continue to
      be needed in order for the Company to continue to operate as a going concern.





F-14




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





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





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





**(3)
      DISCONTINUED OPERATIONS**





In
      March
      2007, management and the Board of Directors of the Company made the decision
      to
      cease all activities related to its Computer Games businesses, including
      discontinuing the operations of its magazine publications, games distribution
      business and related websites. The Company’s decision to shutdown its computer
      games businesses was based primarily on the historical losses sustained by
      these
      businesses during the recent past and management’s expectations of continued
      future losses. As of December 31, 2007, all significant elements of its computer
      games business shutdown plan have been completed by the Company, except for
      the
      collection and payment of remaining outstanding accounts receivables and
      payables.





In
      addition, in March 2007, management and the Board of Directors of the Company
      decided to discontinue the operating, research and development activities of
      its
      VoIP telephony services business and terminate all of the remaining employees
      of
      the business. **** The
      Company’s decision to discontinue the operations of its VoIP telephony services
      business was based primarily on the historical losses sustained by the business
      during the past several years, management’s expectations of continued losses for
      the foreseeable future and estimates of the amount of capital required to
      attempt to successfully monetize its business. On April 2, 2007, theglobe agreed
      to transfer to Michael Egan all of its VoIP intellectual property in
      consideration for his agreement to provide the Security in connection with
      the
      MySpace litigation Settlement Agreement (See Note 13, “Litigation,” for further
      discussion). The Company had previously written off the value of the VoIP
      intellectual property as a result of its evaluation of the VoIP telephony
      services business’ long-lived assets in connection with the preparation of the
      Company’s 2004 year-end consolidated financial statements. As of December 31,
      2007, all significant elements of its VoIP telephony services business shutdown
      plan have been completed by the Company, except for the resolution of certain
      vendor disputes and the payment of remaining outstanding vendor
      payables.





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




F-15




The
        following is a summary of the assets and liabilities of the discontinued
        operations of the computer games and VoIP telephony services businesses as
        included in the accompanying condensed consolidated balance sheets. A
        significant portion of the net liabilities of discontinued operations at
        December 31, 2007 relate to charges that have been disputed by the Company
        and
        for which estimates have been required.


December
                31,
            
            December
                31,2007
            
            2006Assets:Computer
                GamesAccounts
                receivable, net
            
            $
            30,000
            
            $
            518,279Inventory,
                net
            
            
            —
            
            
            37,736Prepaid
                and other current assets
            
            
            —
            
            
            44,111Property
                and equipment, net
            
            
            —
            
            
            38,74730,000
            
            
            638,873VoIP
                Telephony ServicesAccounts
                receivable, net
            
            
            —
            
            
            25,031Prepaid
                and other current assets
            
            
            —
            
            
            113,815Property
                and equipment, net
            
            
            —
            
            
            182,561—
            
            
            321,407Net
                assets of discontinued operations
            
            $
            30,000
            
            $
            960,280




December
                31,
            
            December
                31,2007
            
            2006Liabilities:Computer
                GamesAccounts
                payable
            
            $
            35,583
            
            $
            226,497Accrued
                expenses
            
            
            —
            
            
            22,863Subscriber
                liability, net
            
            
            5,398
            
            
            71,82740,981
            
            
            321,187VoIP
                Telephony ServicesAccounts
                payable
            
            
            1,632,653
            
            
            2,062,562Accrued
                legal settlement
            
            
            —
            
            
            2,550,000Other
                accrued expenses
            
            
            228,710
            
            
            227,1231,861,363
            
            
            4,839,685Net
                liabilities of discontinued operations
            
            $
            1,902,344
            
            $
            5,160,872




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


Years
                  Ended December 31,
              
              2007
              
              2006
              
              2005Computer
                  Games:Net
                  revenue
              
              $
              634,164.00
              
              $
              2,038,649.00
              
              $
              1,948,716.00Loss
                  from operations, net of tax
              
              $
              (114,738.00
              )
              $
              (593,497.00
              )
              $
              (2,144,610.00
              )VoIP
                  Telephony ServicesNet
                  revenue
              
              $
              630.00
              
              $
              34,638.00
              
              $
              248,789.00Loss
                  from operations, net of tax
              
              $
              (614,502.00
              )
              $
              (9,508,764.00
              )
              $
              (13,147,704.00
              )




F-16


The
      Company has estimated the costs expected to be incurred in shutting down its
      computer games and VoIP telephony services businesses and has accrued charges
      as
      of December 31, 2007, as follows:




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




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




Net
      current liabilities of discontinued operations at December 31, 2007 include
      accounts payable and accruals totaling $355,466 related to the estimated
      shut-down costs summarized above.





On
      August
      10, 2005, the Company entered into an Asset Purchase Agreement with
      RelationServe Media, Inc. ("RelationServe") whereby the Company agreed to sell
      all of the business and substantially all of the net assets of its SendTec
      marketing services subsidiary to RelationServe for $37,500,000 in cash, subject
      to certain net working capital adjustments. On August 23, 2005, the Company
      entered into Amendment No. 1 to the Asset Purchase Agreement with RelationServe
      (the “1 st  Amendment”
      and together with the original Asset Purchase Agreement, the “Purchase
      Agreement”). On October 31, 2005, the Company completed the asset sale.
      Including adjustments to the purchase price related to estimated excess working
      capital of SendTec as of the date of sale, the Company received an aggregate
      of
      $39,850,000 in cash pursuant to the Purchase Agreement. **** In
      accordance with the terms of an escrow agreement established as a source to
      secure the Company’s indemnification obligations under the Purchase Agreement,
      $1,000,000 of the purchase price and an aggregate of 2,272,727 shares of
      theglobe’s unregistered Common Stock (valued at $750,000 pursuant to the terms
      of the Purchase Agreement based upon the average closing price of the stock
      in
      the 10 day period preceding the closing of the sale) were placed into
      escrow.





Additionally,
      as contemplated by the Purchase Agreement, immediately following the asset
      sale,
      the Company completed the redemption of 28,879,097 shares of its Common Stock
      owned by six members of management of SendTec for approximately $11,604,000
      in
      cash pursuant to a Redemption Agreement dated August 23, 2005, (the “Redemption
      Payment”). Pursuant to a separate Termination Agreement, the Company also
      terminated and canceled 1,275,783 stock options and the contingent interest
      in
      2,062,785 earn-out warrants held by the six members of management in exchange
      for approximately $400,000 in cash. The Company also terminated 829,678 stock
      options of certain other non-management employees of SendTec and entered into
      bonus arrangements with a number of other non-management SendTec employees
      for
      amounts totaling approximately $600,000. Approximately $4,043,000 of the
      Redemption Payment was attributed to the “fair value” of the shares of Common
      Stock redeemed and recorded as treasury shares. The “fair value” for financial
      accounting purposes was calculated based on the closing price of the Company’s
      Common Stock as reflected on the OTCBB on August 10, 2005, the date the
      principal terms of the Redemption Agreement were announced publicly. The closing
      of the redemption occurred on October 31, 2005. The remaining portion of the
      Redemption Payment, or approximately $7,561,000, was recorded as a reduction
      to
      the gain on the sale of the SendTec business, as the excess of the price paid
      to
      redeem the shares over the “fair value” for financial accounting purposes was
      attributed to the sale in accordance with FASB Technical Bulletin
      85-6.




F-17





On
      March
      31, 2006, a partial release of $750,000 of the escrowed cash was made to the
      Company pursuant to the terms of the escrow agreement, less $318,750 of cash
      due
      to RelationServe in final settlement of the purchase price net working capital
      adjustments. On December 22, 2006, the remaining $250,000 of escrowed cash,
      as
      well as the Common Stock held in escrow, was released to the
      Company.





Results
      of operations for SendTec have been reported separately as “Discontinued
      Operations” in the accompanying consolidated statements of operations for the
      year ended December 31, 2005. Summarized financial information for the
      discontinued operations of SendTec was as follows:




SendTec
                Marketing Services Division
            
            Year
                Ended December 31, 2005Net
                revenue, net of intercompany eliminations
            
            $
            31,872,229Income
                from operations
            
            $
            1,014,430Provision
                for income taxes
            
            
            (945,629
            )Income
                from operations, net of tax
            
            
            68,801Gain
                on sale of business
            
            
            15,017,621Provision
                for income taxes
            
            
            (13,248,090
            )Gain
                on sale, net of tax
            
            
            1,769,531Net
                income from SendTec discontinued operations, net of taxes
            
            $
            1,838,332




The
      Company originally acquired SendTec on September 1, 2004. In exchange for all
      of
      the issued and outstanding shares of capital stock of SendTec, the Company
      paid
      consideration consisting of: (i) $6,000,000 in cash, excluding transaction
      costs, (ii) the issuance of an aggregate of 17,500,024 shares of the Company's
      Common Stock, (iii) the issuance of an aggregate of 175,000 shares of Series
      H
      Automatically Converting Preferred Stock (which was converted into 17,500,500
      shares of the Company's Common Stock effective December 1, 2004), and (iv)
      the
      issuance of a subordinated promissory note in the amount of $1,000,009. The
      Company also issued an aggregate of 3,974,165 replacement options to acquire
      the
      Company's Common Stock for each of the issued and outstanding options to acquire
      SendTec shares held by the former employees of SendTec.





In
      addition, warrants to acquire shares of the Company’s Common Stock would be
      issued to the former shareholders of SendTec when and if SendTec exceeded
      forecasted operating income, as defined, of $10.125 million, for the year ended
      December 31, 2005. The number of earn-out warrants issuable ranged from an
      aggregate of approximately 250,000 to 2,500,000 (if actual operating income
      exceeded the forecast by at least 10%). Pursuant to the Termination Agreement
      mentioned above, the contingent interest in 2,062,785 of the earn-out warrants
      was canceled effective October 31, 2005. The remainder of the earn-out warrants
      expired on December 31, 2005, as the operating income target was not
      achieved.





As
      part
      of the SendTec acquisition transaction, certain executives of SendTec entered
      into new employment agreements with SendTec. The employment agreements each
      had
      a term of five years and contained certain non-compete provisions for periods
      as
      specified by the agreements. The $1,800,000 value assigned to the non-compete
      agreements was being amortized on a straight-line basis over five years.
      Pursuant to the Termination Agreement mentioned above, the employment agreements
      were terminated effective October 31, 2005 and the unamortized balance of the
      non-compete intangible was charged to discontinued operations’
expense.





**(4)
      ACQUISITION OF TRALLIANCE CORPORATION**





On
      February 25, 2003, the Company entered into a Loan and Purchase Option
      Agreement, as amended, with Tralliance, an Internet related business venture,
      pursuant to which it agreed to fund, in the form of a loan, at the discretion
      of
      the Company, Tralliance's operating expenses and obtained the option to acquire
      all of the outstanding capital stock of Tralliance in exchange for, when and
      if
      exercised, $40,000 in cash and the issuance of an aggregate of 2,000,000
      unregistered restricted shares of the Company's Common Stock. The Loan was
      secured by a lien on the assets of the venture. On May 5, 2005, Tralliance
      and
      the Internet Corporation for Assigned Names and Numbers ("ICANN") entered into
      an agreement designating Tralliance as the registry for the ".travel" top-level
      domain. On May 9, 2005, the Company exercised its option to acquire all of
      the
      outstanding capital stock of Tralliance. The purchase price consisted of the
      issuance of 2,000,000 shares of the Company’s Common Stock, warrants to acquire
      475,000 shares of the Company’s Common Stock and $40,000 in cash. The warrants
      are exercisable for a period of five years at an exercise price of $0.11 per
      share. As part of the transaction, 10,000 shares of the Company’s Common Stock
      were also issued to a third party in payment of a finder's fee resulting from
      the acquisition. The Common Stock issued as a result of the acquisition of
      Tralliance is entitled to certain "piggy-back" registration rights. In addition,
      as part of the transaction, the Company agreed to pay approximately $154,000
      in
      outstanding liabilities of Tralliance immediately after the closing of the
      acquisition.




F-18





Upon
      acquisition, the then existing CEO and CFO of Tralliance entered into employment
      agreements, which included certain non-compete provisions, whereby each would
      agree to remain in the employ of Tralliance for a period of two years in
      exchange for annual base compensation totaling $200,000 to each officer, plus
      participation in a bonus pool based upon the pre-tax income of the venture
      (see
      Note 5, “Intangible Assets”). During 2007, the employee agreements for these two
      individuals expired and their employment with the Company was
      terminated.





**(5)
      INTANGIBLE ASSETS**





As
      discussed in Note 4, “Acquisition of Tralliance Corporation,” upon the May 9,
      2005 acquisition of Tralliance, the then existing CEO and CFO of Tralliance
      entered into employment agreements which included certain non-compete provisions
      as specified by the agreements. At December 31, 2007 and 2006, intangible assets
      consist of the $790,236 value assigned to the non-compete agreements which
      is
      being amortized on a straight-line basis over five years. Related accumulated
      amortization as of December 31, 2007 and 2006 totaled $421,459 and $263,412
      respectively.





During
      the years ended December 31, 2007, 2006 and 2005, intangible asset amortization
      expense related to the non-compete agreements totaled $158,047 $188,211, and
      $75,201, respectively.





As
      of
      December 31, 2007, future annual amortization expense of such intangible assets
      is projected to be: $158,047 for each of 2008 and 2009 and $52,683 in
      2010.




**(6)
      PROPERTY AND EQUIPMENT**





Property
      and equipment consisted of the following:




December
                31,2007
            
            2006Equipment
            
            $
            160,810
            
            $
            102,630Capitalized
                software costs
            
            
            121,352
            
            
            186,002Furniture
                and fixtures
            
            
            14,136
            
            
            14,136Leasehold
                improvements
            
            
            7,007
            
            
            7,007303,305
            
            
            309,775Less:
                Accumulated depreciation and amortization
            
            
            267,557
            
            
            165,559$
            35,748
            
            $
            144,216





**(7)
      ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES**





Accrued
      expenses and other current liabilities consisted of the following:




December
                31,2007
            
            2006Interest
                payable on 10% promissory notes due affiliates
            
            $
            954,795
            
            $
            556,164Other
            
            
            1,034,311
            
            
            928,505$
            1,989,106
            
            $
            1,484,669




F-19




**(8)
      DEBT**





Debt
      consisted of the following:


December
                31,2007
            
            20062007
                Convertible Notes due to affiliates; due on demand
            
            $
            1,250,000
            
            $
            —2005
                Convertible Notes due to affiliates; due on demand
            
            
            3,400,000
            
            
            3,400,0004,650,000
            
            
            3,400,000Less:
                short-term portion
            
            
            4,650,000
            
            
            3,400,000Long-term
                portion
            
            $
            —
            
            $
            —





On
      May
      29, 2007, Dancing Bear Investments, Inc. (“Dancing Bear”), an entity which is
      controlled by the Company’s Chairman and Chief Executive Officer, entered into a
      note purchase agreement (the “2007 Agreement”) with the Company pursuant to
      which it acquired a convertible promissory note (the “2007 Convertible Note”) in
      the principal amount of $250,000. Under the terms of the 2007 Agreement, Dancing
      Bear was granted the optional right, for a period of 180 days from the date
      of
      the 2007 Agreement, to purchase additional 2007 Convertible Notes such that
      the
      aggregate principal amount issued under the 2007 Agreement could total
      $3,000,000 (the “2007 Option”). **** On June
      25, 2007, July 19, 2007 and September 6, 2007, Dancing Bear acquired additional
      2007 Convertible Notes in the principal amounts of $250,000, $500,000 and
      $250,000, respectively.  At December 31, 2007 the aggregate outstanding
      principal amount of 2007 Convertible Notes totaled $1,250,000.





The
      2007
      Convertible Notes are convertible at anytime prior to payment into shares of
      the
      Company’s Common Stock at the rate of $0.01 per share.  The conversion
      price of the 2007 Convertible Notes is subject to adjustment upon the occurrence
      of certain events, including with respect to stock splits or combinations.
      Assuming full conversion of all 2007 Convertible Notes that are outstanding
      at
      December 31, 2007 at the initial conversion rate, and without regard to
      potential anti-dilutive adjustments resulting from stock splits and the like,
      125,000,000 shares of the Company’s Common Stock would be issued to Dancing
      Bear. The 2007 Convertible Notes are due five days after demand for payment
      by
      Dancing Bear and are secured by a pledge of all of the assets of the Company
      and
      its subsidiaries, subordinate to existing liens on such assets.  The 2007
      Convertible Notes bear interest at the rate of ten percent per annum.





As
      the
      2007 Convertible Notes were immediately convertible into common shares of the
      Company at issuance, an aggregate of $1,250,000 of non-cash interest expense
      was
      recognized and credited to additional paid-in capital during the year ended
      December 31, 2007, as a result of the beneficial conversion features of the
      2007
      Convertible Notes.  The value attributable to the beneficial conversion
      features was calculated by comparing the fair value of the underlying common
      shares of the 2007 Convertible Notes on the date of issuance based on the
      closing price of theglobe’s Common Stock as reflected on the OTCBB to the
      conversion price and was limited to the aggregate proceeds received from the
      issuance of the 2007 Convertible Notes.





On
      April
      22, 2005, E&C Capital Partners, LLLP and E&C Capital Partners II, LLLP
      (the "E&C Partnerships"), entities controlled by the Company's Chairman and
      Chief Executive Officer, entered into a note purchase agreement (the "2005
      Agreement") with theglobe pursuant to which they acquired convertible promissory
      notes (the "2005 Convertible Notes") in the aggregate principal amount of
      $1,500,000. Under the terms of the 2005 Agreement, the E&C Partnerships were
      also granted the optional right, for a period of 90 days from the date of the
      2005 Agreement, to purchase additional 2005 Convertible Notes such that the
      aggregate principal amount of 2005 Convertible Notes issued under the 2005
      Agreement could total $4,000,000 (the "2005 Option"). On June 1, 2005, the
      E&C Partnerships exercised a portion of the 2005 Option and acquired an
      additional $1,500,000 of 2005 Convertible Notes. On July 18, 2005, the E&C
      Partnerships exercised the remainder of the 2005 Option and acquired an
      additional $1,000,000 of 2005 Convertible Notes.





The
      2005
      Convertible Notes are convertible at the option of the E&C Partnerships into
      shares of the Company's Common Stock at an initial price of $0.05 per share.
      During the year ended December 31, 2005, an aggregate of $600,000 of 2005
      Convertible Notes were converted by the E&C Partnerships into an aggregate
      of 12,000,000 shares of the Company’s Common Stock. At both December 31, 2007
      and 2006, the total principal amount of 2005 Convertible Notes outstanding
      was
      $3,400,000. Assuming full conversion of all 2005 Convertible Notes which remain
      outstanding as of December 31, 2007, an additional 68,000,000 shares of the
      Company's Common Stock would be issued to the E&C Partnerships. The 2005
      Convertible Notes provide for interest at the rate of ten percent per annum
      and
      are secured by a pledge of substantially all of the assets of the Company.
      The
      2005 Convertible Notes are due and payable five days after demand for payment
      by
      the E&C Partnerships.




F-20





As
      the
      2005 Convertible Notes were immediately convertible into common shares of the
      Company at issuance, an aggregate of $4,000,000 of non-cash interest expense
      was
      recorded during the year ended December 31, 2005 as a result of the beneficial
      conversion features of the 2005 Convertible Notes. The value attributed to
      the
      beneficial conversion features was calculated by comparing the fair value of
      the
      underlying common shares of the 2005 Convertible Notes on the date of issuance
      based on the closing price of theglobe's Common Stock as reflected on the OTCBB
      to the conversion price and was limited to the aggregate proceeds received
      from
      the issuance of the Convertible Notes.





As
      discussed in Note 3, “Discontinued Operations,” on September 1, 2004 the Company
      issued a subordinated promissory note in the amount of $1,000,009 in connection
      with the acquisition of SendTec. The subordinated promissory note provided
      for
      interest at the rate of four percent per annum and was due on September 1,
      2005.
      The Company paid the principal and interest due under the terms of the
      subordinated promissory note on October 31, 2005, including default interest
      at
      a rate of 15% per annum for the period the debt was outstanding subsequent
      to
      the original due date.





**(9)
      STOCKHOLDERS' EQUITY**





As
      discussed in Note 8, “Debt” above, on May 29, 2007, Dancing Bear Investments,
      Inc. (“Dancing Bear”), an entity which is controlled by the Company’s Chairman
      and Chief Executive Officer, entered into a note purchase agreement (the “2007
      Agreement”) with the Company pursuant to which it acquired convertible
      promissory notes (the “2007 Convertible Notes”) totaling $1,250,000 during the
      year ended December 31, 2007.





The
      2007
      Convertible Notes are convertible at anytime prior to payment into shares of
      the
      Company’s Common Stock at the rate of $0.01 per share.  The conversion
      price of the 2007 Convertible Notes is subject to adjustment upon the occurrence
      of certain events, including with respect to stock splits or combinations. 
Assuming full conversion of all 2007 Convertible Notes that are outstanding
      at
      December 31, 2007 at the initial conversion rate, and without regard to
      potential anti-dilutive adjustments resulting from stock splits and the like,
      125,000,000 shares of Common Stock would be issued to Dancing Bear.
      Additionally, under the terms of the 2007 Agreement, Dancing Bear was granted
      certain demand and certain “piggy-back” registration rights in the event that
      Dancing Bear exercises its option to convert any of the 2007 Convertible
      Notes.





On
      November 22, 2006, the Company entered into certain Marketing Services
      Agreements (the “Marketing Services Agreements”) with two entities whereby the
      entities agreed to market certain of the Company’s products in exchange for
      certain commissions and promotional fees and which granted the Company exclusive
      right to certain uses of a trade name in connection with certain of the
      Company’s websites. Additionally, on November 22, 2006, in connection with the
      Marketing Services Agreements, the Company entered into a Warrant Purchase
      Agreement with Carl Ruderman, the controlling shareholder of the entities.
      The
      Warrant Purchase Agreement provides for the issuance to Mr. Ruderman of one
      warrant to purchase 5,000,000 shares of the Company’s Common Stock at an
      exercise price of $0.15 per share with a three year term and a second warrant
      to
      purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of
      $0.15 per share with a term of four years. Each warrant provides for the
      extension of the exercise term by an additional three years if certain criteria
      are met under the Marketing Services Agreements. The Warrant Purchase Agreement
      grants to Mr. Ruderman “piggy-back” registration rights with respect to the
      shares of the Company’s Common Stock issuable upon exercise of the warrants. The
      $515,262 fair value of the warrants was determined using the Black Scholes
      model
      and was recorded as a charge to sales and marketing expense and additional
      paid
      in capital in the accompanying 2006 consolidated financial
      statements.





In
      connection with the issuance of the warrants, on November 22, 2006, Mr. Ruderman
      entered into a Stockholders’ Agreement with the Company’s chairman and chief
      executive officer, the Company’s president and certain of their affiliates.
      Pursuant to the Stockholders’ Agreement, Mr. Ruderman granted an irrevocable
      proxy over the shares issuable upon exercise of the warrants to E&C Capital
      Partners, LLLP and granted a right of first refusal over his shares to all
      of
      the other parties to the Stockholders’ Agreement. Mr. Ruderman also agreed to
      sell his shares under certain circumstances in which the other parties to the
      Stockholders’ Agreement have agreed to sell their respective shares. Mr.
      Ruderman was also granted the right to participate in certain sales of the
      Company’s Common Stock by the other parties to the Stockholders’
Agreement.





On
      December 31, 2005, the Company’s Board of Directors authorized the retirement of
      699,281 common shares held in treasury.





As
      discussed in Note 3, "Discontinued Operations”, the Company completed the sale
      of the business and substantially all of the net assets of its SendTec marketing
      services subsidiary on October 31, 2005. As contemplated by the Purchase
      Agreement, immediately following the asset sale, the Company completed the
      redemption of 28,879,097 shares of its Common Stock owned by six members of
      management of SendTec for approximately $11,604,000 in cash pursuant to a
      Redemption Agreement dated August 23, 2005 (the “Redemption Payment”).
      Approximately $4,043,000 of the Redemption Payment was attributed to the “fair
      value” of the shares of Common Stock redeemed and recorded as treasury shares.
      The “fair value” for financial accounting purposes was calculated based on the
      closing price of the Company’s Common Stock as reflected on the OTCBB on August
      10, 2005, the date the principal terms of the Redemption Agreement were
      announced publicly. The closing of the redemption occurred on October 31, 2005.
      The remaining portion of the Redemption Payment, or approximately $7,561,000,
      was recorded as a reduction to the gain on the sale of the SendTec business,
      as
      the excess of the price paid to redeem the shares over the “fair value” for
      financial accounting purposes was attributed to the sale in accordance with
      FASB
      Technical Bulletin 85-6. The 28,879,097 common shares redeemed were retired
      effective October 31, 2005. Pursuant to a separate Termination Agreement, the
      Company also terminated and canceled 1,275,783 stock options and the contingent
      interest in 2,062,785 earn-out warrants held by the six members of management
      in
      exchange for approximately $400,000 in cash.




F-21





In
      accordance with the terms of an escrow agreement established as a source to
      secure the Company’s indemnification obligations under the Purchase Agreement,
      $1,000,000 of the purchase price and an aggregate of 2,272,727 shares of
      theglobe’s unregistered Common Stock (valued at $750,000 pursuant to the terms
      of the Purchase Agreement based upon the average closing price of the stock
      in
      the 10 day period preceding the closing of the sale) were placed into escrow.
      During the year ended December 31, 2006, the escrowed cash and shares of the
      theglobe’s Common Stock were released to the Company and the common shares were
      retired.





The
      Company originally acquired SendTec on September 1, 2004. In exchange for all
      of
      the issued and outstanding shares of capital stock of SendTec, the Company
      paid
      consideration consisting of: (i) $6,000,000 in cash, excluding transaction
      costs, (ii) the issuance of an aggregate of 17,500,024 shares of the Company's
      Common Stock, (iii) the issuance of an aggregate of 175,000 shares of Series
      H
      Automatically Converting Preferred Stock (which was converted into 17,500,500
      shares of the Company's Common Stock effective December 1, 2004, the effective
      date of the amendment to the Company’s certificate of incorporation increasing
      its authorized shares of Common Stock from 200,000,000 shares to 500,000,000
      shares), and (iv) the issuance of a subordinated promissory note in the amount
      of $1,000,009.





As
      more fully described in Note 4, “Acquisition of Tralliance Corporation,” on May
      9, 2005, the Company exercised its option to acquire all of the outstanding
      capital stock of Tralliance. The purchase price consisted of the issuance of
      2,000,000 shares of the Company’s Common Stock and warrants to acquire 475,000
      shares of the Company’s Common Stock, as well as the payment of $40,000 in cash.
      The warrants are exercisable for a period of five years at an exercise price
      of
      $0.11 per share. The Common Stock issued as a result of the acquisition of
      Tralliance is entitled to certain “piggy-back” registration rights.





Reference
      should be made to Note 8, “Debt,” for the discussion of a note purchase
      agreement entered into by the E&C Partnerships and theglobe on April 22,
      2005, providing for the issuance of an aggregate of $4,000,000 of 2005
      Convertible Notes. The Convertible Notes are convertible at the option of the
      E&C Partnerships into shares of the Company's Common Stock at an initial
      price of $0.05 per share. Through December 31, 2007, an aggregate of $600,000
      of
      2005 Convertible Notes had been converted by the E&C Partnerships into an
      aggregate of 12,000,000 shares of the Company’s Common Stock. Assuming full
      conversion of all of the 2005 Convertible Notes which remain outstanding as
      of
      December 31, 2007, 68,000,000 shares of the Company’s Common Stock would be
      issued to the E&C Partnerships.





**(10)
      STOCK OPTION PLANS**





During
      1995, the Company established the 1995 Stock Option Plan, which was amended
      (the
      "Amended Plan") by the Board of Directors in December 1996 and August 1997.
      Under the Amended Plan, a total of 1,582,000 common shares were reserved for
      issuance. Any incentive stock options granted under the Amended Plan were
      required to be granted at the fair market value of the Company's Common Stock
      at
      the date the option was issued.





Under
      the
      Company's 1998 Stock Option Plan (the "1998 Plan") a total of 3,400,000 common
      shares were reserved for issuance and 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 and its subsidiaries are eligible to receive grants
      under the 1998 Plan.





In
      January 2000, the Board adopted the 2000 Broad Based Employee Stock Option
      Plan
      (the "Broad Based Plan"). Under the Broad Based Plan, 850,000 shares of Common
      Stock were reserved for issuance. The intention of the Broad Based Plan is
      that
      at least 50% of the options granted will be to individuals who are not managers
      or officers of theglobe. In April 2000, the Company's 2000 Stock Option Plan
      (the "2000 Plan") was adopted by the Board of Directors and approved by the
      stockholders of the Company. The 2000 Plan authorized the issuance of 500,000
      shares of Common Stock, subject to adjustment as provided in the 2000 Plan.
      The
      Broad Based Plan and the 2000 Plan provide 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 Broad Based Plan and the 2000 Plan. Directors,
      officers, employees and consultants of the Company and its subsidiaries are
      eligible to receive grants under the Broad Based Plan and the 2000
      Plan.




In
      September 2003, the Board adopted the 2003 Sales Representative Stock Option
      Plan (the "2003 Plan") which authorized the issuance of up to 1,000,000
      non-qualified stock options to purchase the Company's Common Stock to sales
      representatives who are not employed by the Company or its subsidiaries. In
      January 2004, the Board amended the 2003 Plan to include certain employees
      and
      consultants of the Company.





The
      Company's Board of Directors adopted a new benefit plan entitled the 2004 Stock
      Incentive Plan (the "2004 Plan") on August 31, 2004. An aggregate of 7,500,000
      shares of the Company's Common Stock may be issued pursuant to the 2004 Plan.
      Employees, consultants, and prospective employees and consultants of theglobe
      and its affiliates and non-employee directors of theglobe are eligible for
      grants of non-qualified stock options, stock appreciation rights, restricted
      stock awards, performance awards and other stock-based awards under the 2004
      Plan.




F-22





On
      December 1, 2004, based upon approval of the stockholders of the Company, the
      2000 Plan was amended and restated to (i) increase the number of shares reserved
      for issuance under the 2000 Plan by 7,500,000 shares to a total of 8,000,000
      shares and (ii) to remove a previous plan provision that limited the number
      of
      options that may be awarded to any one individual.





In
      accordance with the provisions of the Company's stock option plans, nonqualified
      stock options may be granted to officers, directors, other employees,
      consultants and advisors of the Company. The option price for nonqualified
      stock
      options shall be at least 85% of the fair market value of the Company's Common
      Stock. In general, options granted under the Company's stock option plans expire
      after a ten-year period and in certain circumstances options, under the 1995
      and
      1998 plans, are subject to the acceleration of vesting. Incentive options
      granted to stockholders who own greater than 10% of the total combined voting
      power of all classes of stock of the Company must be issued at 110% of the
      fair
      market value of the stock on the date the options are granted. A committee
      selected by the Company's Board of Directors has the authority to approve
      optionees and the terms of the stock options granted, including the option
      price
      and the vesting terms. Stock option awards are generally granted with an
      exercise price equal to the market price of theglobe’s Common Stock at the date
      of grant with 25% of the stock option grant vesting immediately and the
      remainder vesting equally over the next twelve quarters.





During
      the year ended December 31, 2007, a total of 100,000 stock options were granted
      to a consultant. A total of 6,130,000 stock options were granted during the
      year
      ended December 31, 2006. The 2006 total included the issuance of 550,000 stock
      options in connection with a consulting agreement which would vest only upon
      the
      achievement of certain performance targets, as well as grants of 250,000 stock
      options to other non-employees. The performance targets were not achieved and
      the 550,000 stock options were cancelled in the first quarter of 2007. Options
      were granted during 2005 for a total of 5,922,250 shares of Common Stock,
      including grants of 775,000 stock options to non-employees.





As
      a
      result of the sale of the SendTec business on October 31, 2005, and pursuant
      to
      a Termination Agreement, the Company terminated and canceled 1,275,783 stock
      options and the contingent interest in 2,062,785 earn-out warrants held by
      the
      six members of management in exchange for approximately $400,000 in cash. The
      Company also terminated 829,678 stock options of certain other non-management
      employees of SendTec and entered into bonus arrangements with a number of other
      non-management SendTec employees for amounts totaling approximately $600,000.
      Remaining outstanding stock options related to the bonus option pool which
      was
      established as of the acquisition, totaling 477,000 options, were also
      terminated as the forecasted operating income targets for the year ended
      December 31, 2005 had not been achieved.





No
      stock
      options were exercised during the year ended December 31, 2007. Stock option
      exercises during the years ended December 31, 2006 and 2005, resulted in cash
      inflows to the Company of $18,420 and $166,841, respectively. The corresponding
      intrinsic value as of exercise date of the 349,474 stock options exercised
      during the year ended December 31, 2006 was $119,628. Intrinsic value as of
      the
      exercise date of the 2,001,661 stock options exercised during the year ended
      December 31, 2005 was $418,268.





Stock
      option activity during the year ended December 31, 2007 was as
      follows:





WeightedNumber
                of
            
            Weighted
                Average Exercise
            
            Average
                Remaining Contractual
            
            Aggregate
                IntrinsicOptions
            
            Price
            
            Term
            
            Value****
            
            ****
            
            ****
            
            ****Outstanding
                at December 31, 2006
            
            
            20,142,620
            
            $
            0.36Granted
            
            
            100,000
            
            
            0.08Exercised
            
            
            —
            
            
            —Canceled
            
            
            (3,901,960
            )
            
            0.17Outstanding
                at December 31, 2007
            
            
            16,340,660
            
            $
            0.40
            
            
            6.3
                years
            
            $
            —Exercisable
                at December 31, 2007
            
            
            15,800,770
            
            $
            0.41
            
            
            6.2
                years
            
            $
            —Options
                available at December 31, 2007
            
            
            6,643,701





A
      total
      of $140,549 and $449,749 of employee stock compensation expense was charged
      to
      operating expenses during the years ended December 31, 2007 and 2006,
      respectively, including $35,468 and $13,584 resulting from modifications made
      to
      stock option grants to accelerate vesting upon termination of employees. Prior
      to the adoption of SFAS No. 123R on January 1, 2006, the Company had applied
      APB
      Opinion No. 25 in accounting for grants to employees pursuant to stock option
      plans. Compensation cost of $20,987 was recorded to operating expenses of
      continuing operations during the year ended December 31, 2005, primarily related
      to vesting of prior year employee option grants with below-market exercise
      prices. In addition, $28,000 of stock compensation expense was recorded during
      the year ended December 31, 2005 as a result of the accelerated vesting of
      stock
      options issued to certain terminated employees.




F-23





Compensation
      cost charged to operating expenses of continuing operations in connection with
      stock options granted in recognition of services rendered by non-employees
      was
      $7,126, $109,199 and $176,050, for the years ended December 31, 2007, 2006
      and
      2005, respectively.





At
      December 31, 2007, there was approximately $46,000 of unrecognized compensation
      expense related to unvested stock options which is expected to be recognized
      over a weighted-average period of 1.5 years.





**(11)
      INCOME TAXES**





The
      provision (benefit) for income taxes is summarized as follows:




Year
                Ended December 31,2007
            
            2006
            
            2005Continuing
                operations
            
            $
            —
            
            $
            124,313
            
            $
            (7,795,538
            )Discontinued
                operations
            
            
            —
            
            
            —
            
            
            8,375,719$
            —
            
            $
            124,313
            
            $
            580,181




The
      provision (benefit) attributable to the loss from continuing operations before
      income taxes was as follows:




Year
                Ended December 31,2007
            
            2006
            
            2005Current:Federal
            
            $
            —
            
            $
            —
            
            $
            —State
            
            
            —
            
            
            124,313
            
            
            ——
            
            
            124,313
            
            
            —Deferred:Federal
            
            
            —
            
            
            —
            
            
            (6,999,912
            )State
            
            
            —
            
            
            —
            
            
            (795,626
            )—
            
            
            —
            
            
            (7,795,538
            )Provision
                (benefit) for income taxes
            
            $
            —
            
            $
            124,313
            
            $
            (7,795,538
            )




The
      following is a reconciliation of the federal income tax provision (benefit)
      at
      the federal statutory rate to the Company’s tax benefit attributable to
      continuing operations:




Year
                Ended December 31,2007
            
            2006
            
            2005Statutory
                federal income tax rate
            
            
            34.00
            %
            
            34.00
            %
            
            34.00
            %Beneficial
                conversion interest
            
            
            (7.84
            )
            
            —
            
            
            (11.65
            )Nondeductible
                items
            
            
            (0.23
            )
            
            (0.40
            )
            
            (5.03
            )State
                income taxes, net of federal benefit
            
            
            3.02
            
            
            2.10
            
            
            2.02Change
                in valuation allowance
            
            
            (29.01
            )
            
            (40.54
            )
            
            46.02Change
                in effective tax rate
            
            
            —
            
            
            —
            
            
            —Other
            
            
            0.06
            
            
            3.02
            
            
            1.44Effective
                tax rate
            
            
            0.00
            %
            
            (1.82
            )%
            
            66.80
            %




F-24


The
      tax
      effects of temporary differences that give rise to significant portions of
      the
      deferred tax assets and deferred tax liabilities at December 31, 2007 and 2006
      are presented below.




December
                31,
            
            December
                31,2007
            
            2006Deferred
                tax assets (liabilities):Net
                operating loss carryforwards
            
            $
            63,300,000
            
            $
            60,937,000Issuance
                of warrants
            
            
            1,438,000
            
            
            1,182,000Allowance
                for doubtful accounts
            
            
            13,000
            
            
            —Inventory
                reserve
            
            
            7,000
            
            
            147,000AMT
                tax credit
            
            
            313,000
            
            
            313,000Litigation
                settlement accrual
            
            
            —
            
            
            977,000Accrued
                interest
            
            
            362,000
            
            
            211,000Accrued
                expenses
            
            
            843,000
            
            
            590,000Depreciation
                and amortization
            
            
            (97,000
            )
            
            107,000Other
            
            
            300,000
            
            
            166,000Total
                gross deferred tax assets
            
            
            66,479,000
            
            
            64,630,000Less:
                valuation allowance
            
            
            (66,479,000
            )
            
            (64,630,000
            )Total
                net deferred tax assets
            
            $
            —
            
            $
            —




Because
      of the Company's lack of earnings history, the net deferred tax assets have
      been
      fully offset by a 100% valuation allowance. The valuation allowance for net
      deferred tax assets was $66.5 million and $64.6 million as of December 31,
      2007
      and 2006, respectively. The net change in the total valuation allowance was
      $1.8
      million and $7.2 million for the years ended December 31, 2007 and 2006,
      respectively. The Company had a tax benefit in 2005 of $13.6 million, allocated
      to continuing and discontinued operations, resulting from the effect of changes
      in the valuation assessment of current and prior year net operating losses,
      due
      to the sale of SendTec.





In
      assessing the realizability of deferred tax assets, management considers whether
      it is more likely than not that some portion or all of the deferred tax assets
      will not be realized. The ultimate realization of deferred tax assets, which
      consist of tax benefits primarily from net operating loss carryforwards, is
      dependent upon the generation of future taxable income during the periods in
      which those temporary differences become deductible. Management considers the
      scheduled reversal of deferred tax liabilities, projected future taxable income
      and tax planning strategies in making this assessment. Of the total valuation
      allowance of $66.5 million as of December 31, 2007, subsequently recognized
      tax
      benefits, if any, in the amount of $6.4 million will be applied directly to
      contributed capital.





At
      December 31, 2007, the Company had net operating loss carryforwards available
      for U.S. tax purposes of approximately $167.0 million. These carryforwards
      expire through 2027. Under Section 382 of the Internal Revenue Code of 1986,
      as
      amended (the "Code"), the utilization of net operating loss carryforwards may
      be
      limited under the change in stock ownership rules of the Code. Due to various
      significant changes in our ownership interests, as defined in the Internal
      Revenue Code of 1986, as amended, the Company has substantially limited the
      availability of its net operating loss carryforwards. There can be no assurance
      that the Company will be able to avail itself of any net operating loss
      carryforwards. These net operating loss carryforwards may be further adversely
      impacted if the Proposed Tralliance Transaction is consummated.




**(12)
        COMMITMENTS**
  **REGISTRY
        COMMITMENTS**
  Tralliance
        has entered into various agreements with unrelated third parties for the
        outsourcing of certain marketing, administrative and registry functions.
        Fees
        for some of these services vary based on transaction levels, but the agreements
        generally provide for annual and/or monthly payments, and in the case of
        one
        agreement specifies minimum payments of $100,000 annually. The term of the
        agreement which specifies the minimum payment of $100,000 annually continues
        for
        as long as the agreement designating Tralliance as the sole registry for
        the
“.travel” top-level domain by the Internet Corporation for Assigned Names and
        Numbers (“ICANN”) is in effect, including any renewal periods. The initial term
        of the agreement with ICANN is ten years. Commitments under such marketing,
        administrative and registry agreements are as follows:


Year
                ending December 31:2008
            
            $
            235,0002009
            
            
            110,0002010
            
            
            110,0002011
            
            
            110,0002012
            
            
            110,000Thereafter
            
            
            284,000$
            959,000




F-25


**EMPLOYMENT
      AGREEMENTS**





On
      August
      1, 2003, the Company entered into employment agreements with its Chairman and
      Chief Executive Officer, President and Vice President of Finance (its former
      Chief Financial Officer). The three agreements, which are for a period of one
      year and automatically extend for one day each day until either party notifies
      the other not to further extend the employment period, provide for annual base
      salaries totaling $640,000 (as amended) and annual bonuses based on pre-tax
      operating income, as defined, for an annual minimum of $100,000 in total. On
      October 1, 2007, the employment agreements were amended so as to irrevocably
      terminate the Company’s obligation to pay annual minimum bonuses to any of its
      officers in the future. The agreements also provide for severance benefits
      under
      certain circumstances, as defined, which in the case of the Chairman and Chief
      Executive Officer and the President, include lump-sum payments equal to ten
      times the sum of the executive's base salary and the highest annual bonus earned
      by the executive, and in the case of the Vice President of Finance, include
      lump-sum payments equal to two times the sum of the executive's base salary
      and
      the highest annual bonus earned by the executive. In addition, these severance
      benefits also require the Company to maintain insurance benefits for a period
      of
      up to ten years, in the case of the Chairman and Chief Executive Officer and
      the
      President, and up to two years, in the case of the Vice President of Finance,
      substantially equivalent to the insurance benefits existing upon
      termination.





**OPERATING
      LEASES**





Historically,
      the Company has leased various facilities under non-cancellable operating
      leases. These leases generally contained renewal options and required the
      Company to pay certain executory costs such as maintenance and insurance. All
      of
      the Company’s then existing facility leases expired during 2007, and based
      primarily upon the Company’s decision to shut down its VoIP telephony services
      and computer games businesses during the first quarter of 2007, were not
      renewed. Rent expense charged to continuing operations for the years ended
      December 31, 2007, 2006 and 2005 totaled approximately $318,000, $89,000 and
      $58,000, respectively. Rent expense included within discontinued operations
      for
      the years ended December 31, 2007, 2006 and 2005 totaled approximately $96,000,
      $611,000 and $948,000, respectively. The above rent expense amounts include
      rent
      expenses incurred in connection with certain sublease agreements with related
      parties, as discussed below.





Effective
      September 1, 2003, the Company entered into a sublease agreement for office
      space with a company controlled by our Chairman. Rent expense related to this
      sub-lease, which expired on August 31, 2007, was $269,000, $416,000, and
      $353,000 for the years ended December 31, 2007, 2006, and 2005, respectively.
      Effective September 1, 2007, the Company entered into a new sublease, on a
      month-to-month basis, with this same related party for which the Company is
      obligated to pay total rent of $15,000 month. During 2007, rent expense totaling
      $75,000 was incurred under this new sublease.





Tralliance
      Corporation, from date of acquisition on May 9, 2005, subleased office space
      in
      New York city from an entity controlled by its former President for
      approximately $3,400 per month. This sub-lease was terminated in June 2007.





The
      approximate future minimum lease payments under non-cancellable operating leases
      with initial or remaining terms of one year or more, which is related
      exclusively to office equipment leases, at December 31, 2007, were as
      follows:




2008
            
            $
            6,9002009
            
            
            4,600$
            11,500





**(13)
      LITIGATION**





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




F-26





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





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





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





On
      October 4, 2005, Sprint Communications Company, L.P. (“Sprint”) filed a
      Complaint in the United States District Court for the District of Kansas against
      theglobe, theglobe’s subsidiary, tglo.com (formerly known as voiceglo Holdings,
      Inc. or “voiceglo”), and Vonage Holdings Corp. (“Vonage”). On October 12, 2005,
      Sprint filed a First Amended Complaint naming Vonage America, Inc. (“Vonage
      America”) as an additional defendant. Neither theglobe nor voiceglo has any
      affiliation with Vonage or Vonage America. Sprint alleged that theglobe and
      voiceglo had made unauthorized use of “inventions” described and claimed in
      seven patents held by Sprint. Sprint sought monetary and injunctive relief
      for
      this alleged infringement. On November 21, 2005, theglobe and voiceglo filed
      an
      Answer to Sprint’s First Amended Complaint, denying infringement and interposing
      affirmative defenses, including that each of the asserted patents were invalid.
      voiceglo counterclaimed against Sprint for a declaratory judgment of
      non-infringement and invalidity. On January 18, 2006, the court issued a
      Scheduling Order which called for, among other things, discovery to be completed
      by December 29, 2006, and for trial to commence August 7, 2007. On August 22,
      2006, the Company, together with its subsidiary, and Sprint entered into a
      settlement agreement (the “Settlement”) which resolved the pending patent
      infringement lawsuit. As part of the Settlement, the Company and its subsidiary
      agreed to enter into a non-exclusive license under certain of Sprint’s
      patents.





On
      and
      after August 3, 2001 six putative shareholder class action lawsuits were filed
      against the Company, certain of its current and former officers and directors
      (the “Individual Defendants”), and several investment banks that were the
      underwriters of the Company's initial public offering and secondary offering.
      The lawsuits were filed in the United States District Court for the Southern
      District of New York. A Consolidated Amended Complaint, which is now the
      operative complaint, was filed in the Southern District of New York on April
      19,
      2002.





The
      lawsuits purport to be class actions filed on behalf of purchasers of the stock
      of the Company during the period from November 12, 1998 through December 6,
      2000. Plaintiffs allege that the underwriter defendants agreed to allocate
      stock
      in the Company's initial public offering and its secondary offering to certain
      investors in exchange for excessive and undisclosed commissions and agreements
      by those investors to make additional purchases of stock in the aftermarket
      at
      pre-determined prices. Plaintiffs allege that the Prospectuses for the Company's
      initial public offering and its secondary offering were false and misleading
      and
      in violation of the securities laws because it did not disclose these
      arrangements. The action seeks damages in an unspecified amount. On February
      19,
      2003, a motion to dismiss all claims against the Company was denied by the
      Court. On December 5, 2006, the Second Circuit vacated a decision by the
      district court granting class certification in six of the coordinated cases,
      which are intended to serve as test, or “focus,” cases. The plaintiffs selected
      these six cases, which do not include the Company. On April 6, 2007, the Second
      Circuit denied a petition for rehearing filed by the plaintiffs, but noted
      that
      the plaintiffs could ask the district court to certify more narrow classes
      than
      those that were rejected.




F-27





Prior
      to
      the Second Circuit’s December 5, 2006 ruling, the majority of issuers, including
      the Company, and their insurers had submitted a settlement agreement to the
      district court for approval. In light of the Second Circuit opinion, the parties
      agreed that the settlement could not be approved because the defined settlement
      class, like the litigation class, could not be certified. On June 25, 2007,
      the
      district court approved a stipulation filed by the plaintiffs and the issuers
      which terminated the proposed settlement. On August 14, 2007, the plaintiffs
      filed amended complaints in the six focus cases. The amended complaints include
      a number of changes, such as changes to the definition of the purported class
      of
      investors, and the elimination of the individual defendants as defendants.
      On
      September 27, 2007, the plaintiffs filed a motion for class certification in
      the
      six focus cases. On November 14, 2007, the issuers and the underwriters named
      as
      defendants in the six focus cases filed motions to dismiss the amended
      complaints against them. We are awaiting the Court’s decision on these motions.





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





The
      Company is currently a party to certain other claims and disputes arising in
      the
      ordinary course of business, including certain disputes related to vendor
      charges incurred primarily as the result of the failure and subsequent shutdown
      of its discontinued VoIP telephony services business. The Company believes
      that
      it has recorded adequate accruals on its balance sheet to cover such disputed
      charges and is seeking to resolve and settle such disputed charges for amounts
      substantially less than recorded amounts. An adverse outcome in any of these
      matters, however, could materially and adversely effect our financial position,
      utilize a significant portion of our cash resources and adversely affect our
      ability our ability to continue as a going concern (see Note 3, “Discontinued
      Operations”).





**(14)
      RELATED PARTY TRANSACTIONS**





Certain
      directors of the Company also serve as officers and directors of and own
      controlling interests in Dancing Bear Investments, Inc. ("Dancing Bear"),
      E&C Capital Partners LLLP, E&C Capital Partners II, LLLP, The Registry
      Management Company, LLC, Labigroup Holdings, LLC and Search.Travel LLC. Dancing
      Bear, E&C Capital Partners, LLLP and E&C Capital Partners II, LLLP are
      stockholders of the Company and are entities controlled by our
      Chairman.





As
      discussed more fully in Note 16, “Subsequent Events”, on February 1, 2008, the
      Company entered into a letter of intent to sell substantially all of the
      business and assets of Tralliance and to issue approximately 269,000,000 shares
      of its common stock to The Registry Management Company, LLC for aggregate
      consideration of approximately $7,300,000. The Registry Management Company,
      LLC
      is a privately held entity controlled by the Company’s Chairman, of which our
      remaining directors also own a minority interest.





On
      December 20, 2007, Tralliance entered into a Bulk Registration Co-Marketing
      Agreement (the “Co-Marketing Agreement”) with Labigroup Holdings, LLC
      (“Labigroup”), under Tralliance’s bulk purchase program. Labigroup is a private
      entity controlled by the Company’s Chairman and our remaining directors own a
      minority interest in Labigroup. Under the Co-Marketing Agreement, Labigroup
      committed to purchase a predetermined minimum number of “.travel” domain names
      on a bulk basis from an accredited “.travel” registrar of its own choosing and
      to establish a predetermined minimum number of related “.travel” websites. As
      consideration for the “.travel” domain names to be purchased under the
      Co-Marketing Agreement, Labigroup agreed to pay certain fixed fees and make
      certain other payments including, but not limited to, an ongoing royalty
      calculated as a percentage share of its net revenue, as defined in the
      Co-Marketing Agreement (the “Labigroup Royalties”), to Tralliance. The
      Co-Marketing Agreement has an initial term which expires September 30, 2010
      after which it may be renewed for successive periods of two and three years,
      respectively. During the period from December 20, 2007 through December 31,
      2007, Labigroup registered 164,708 “.travel” domain names under the Co-Marketing
      Agreement. As of December 31, 2007, Labigroup has paid $262,500 and is obligated
      to pay an additional $412,050 in fees and costs to Tralliance under the
      Co-Marketing Agreement. Such amounts, which are equal to the amount of
      incremental fees and costs incurred by Tralliance in registering these bulk
      purchase names, have been treated as a reimbursement of these incremental fees
      and costs in the Company’s financial statements. The Company plans to recognize
      revenue related to this Co-Marketing Agreement only to the extent that Labigroup
      Royalties are earned.. No such revenue has been recorded as of December 31,
      2007.





On
      December 13, 2007, the Company entered into and closed an Assignment, Conveyance
      and Bill of Sale Agreement with Search.Travel, LLC (“Search.Travel”). Pursuant
      to this agreement, Tralliance sold all of its rights relating to the
      www.search.travel domain name, website and related assets to Search.Travel
      for a
      purchase price of $380,000, which was paid in cash at the closing date.
      Search.Travel is a private entity controlled by the Company’s Chairman, of which
      our remaining directors also own a minority interest. The purchase price was
      determined by the Board of Directors taking into account the valuation given
      to
      the assets by an independent investment banking firm. A gain on the sale of
      Search.Travel in the amount of $379,791 was recognized and has been included
      within Other Income in the Consolidated Statement of Operations for the year
      ended December 31, 2007.




F-28





As
      discussed more fully in Note 8, “Debt”, on May 29, 2007, Dancing Bear entered
      into a note purchase agreement (the “2007 Agreement”) with the Company pursuant
      to which Dancing Bear acquired a secured demand convertible promissory note
      (the
“2007 Convertible Note”) in the amount of $250,000. Under the terms of the 2007
      Agreement, Dancing Bear was granted the optional right, for a period of 180
      days
      from the date of the 2007 Agreement, to purchase additional 2007 Convertible
      Notes such that the aggregate principal amount issued under the 2007 Agreement
      could total $3,000,000. On June 25, 2007, July 19, 2007 and September 6, 2007,
      Dancing Bear acquired additional 2007 Convertible Notes in the principal amounts
      of $250,000, $500,000 and $250,000 respectively. At December 31, 2007, the
      aggregate principal amount of 2007 Convertible Notes totaled $1,250,000.
      Interest associated with the 2007 Convertible Notes of approximately $58,600
      was
      charged to expense during the year ended December 31, 2007, and remained
      outstanding at December 31, 2007.





On
      April
      2, 2007, theglobe agreed to transfer to Michael Egan all of its VoIP
      intellectual property in consideration for his agreement to provide certain
      security and credit enhancements in connection with the MySpace litigation
      Settlement Agreement (See Note 13, “Litigation”, for further discussion). The
      Company had previously written off the value of the VoIP intellectual property
      as a result of its evaluation of the VoIP telephony services business’
long-lived assets in connections with the preparation of the Company’s 2004
      year-end consolidated financial statements.





On
      November 22, 2006, the Company entered into a License Agreement (the “License
      Agreement”) with Speecho, LLC which granted a license to use the Company’s chat,
      VoIP and video communications technology for a minimum license fee of $10,000
      per month with an initial term of ten years. The Company’s Chairman, the
      Company’s President and the Company’s Vice President of Finance, as well as
      certain other employees of the Company, are members of a company that owns
      50%
      of the membership interests in Speecho, LLC. Due to various technology related
      problems, the License Agreement was terminated in August 2007. No revenue was
      ever recognized by the Company related to the License Agreement.





On
      November 22, 2006, the Company entered into certain Marketing Services
      Agreements (the “Marketing Services Agreements”) with two entities whereby the
      entities agreed to market certain of the Company’s products in exchange for
      certain commissions and promotional fees and which granted the Company exclusive
      right to certain uses of a trade name in connection with certain of the
      Company’s websites. Additionally, on November 22, 2006, in connection with the
      Marketing Services Agreements, the Company entered into a Warrant Purchase
      Agreement with Carl Ruderman, the controlling shareholder of the entities.
      The
      Warrant Purchase Agreement provides for the issuance to Mr. Ruderman of one
      warrant to purchase 5,000,000 shares of the Company’s Common Stock at an
      exercise price of $0.15 per share with a three year term and a second warrant
      to
      purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of
      $0.15 per share with a term of four years. Each warrant provides for the
      extension of the exercise term by an additional three years if certain criteria
      are met under the Marketing Services Agreements. The Warrant Purchase Agreement
      grants to Mr. Ruderman “piggy-back” registration rights with respect to the
      shares of the Company’s Common Stock issuable upon exercise of the warrants.





In
      connection with the issuance of the warrants, on November 22, 2006, Mr. Ruderman
      entered into a Stockholders’ Agreement with the Company’s chairman and chief
      executive officer, the Company’s president and certain of their affiliates.
      Pursuant to the Stockholders’ Agreement, Mr. Ruderman granted an irrevocable
      proxy over the shares issuable upon exercise of the warrants to E&C Capital
      Partners, LLLP and granted a right of first refusal over his shares to all
      of
      the other parties to the Stockholders’ Agreement. Mr. Ruderman also agreed to
      sell his shares under certain circumstances in which the other parties to the
      Stockholders’ Agreement have agreed to sell their respective shares. Mr.
      Ruderman was also granted the right to participate in certain sales of the
      Company’s Common Stock by the other parties to the Stockholders’
Agreement.





As
      discussed more fully in Note 8, “Debt,” on April 22, 2005, E&C Capital
      Partners, LLLP and E&C Capital Partners II, LLLP entered into a note
      purchase agreement (the “2005 Agreement”) with the Company pursuant to which
      they ultimately acquired secured demand convertible promissory notes (the “2005
      Convertible Notes”) totaling $4,000,000. During the year ended December 31,
      2005, an aggregate of $600,000 of the 2005 Convertible Notes were converted
      into
      the Company’s Common Stock. At both December 31, 2007 and 2006, the total
      principal amount of 2005 Convertible Notes outstanding was $3,400,000. **** Interest
      associated with the 2005 Convertible Notes of approximately $340,000, $340,000
      and $216,200 was charged to expense during the years ended December 31, 2007,
      2006 and 2005, respectively, and remained unpaid as of December 31,
      2007.





Several
      entities controlled by our Chairman have provided services to the Company and
      several of its subsidiaries, including: the lease of office and warehouse space;
      and the outsourcing of customer service and warehouse functions for the
      Company's VoIP operation. During the first quarter of 2005, an entity controlled
      by our Chairman also began performing human resource and payroll processing
      functions for the Company and several of its subsidiaries. During the years
      ended December 31, 2007, 2006 and 2005, a total of approximately $394,000,
      $466,000 and $386,000 of expense was recorded related to these services,
      respectively. Approximately $440,000 and $158,000 related to these services
      was
      included in accounts payable and accrued expenses at December 31, 2007 and
      2006,
      respectively.





Tralliance
      Corporation, which was acquired May 9, 2005, subleased office space in New
      York
      City on a month-to-month basis from an entity controlled by its former
      President. A total of approximately $13,000 and $41,000 in rent expense related
      to this month-to-month sublease was included in the accompanying statement
      of
      operations for the years ended December 31, 2007 and 2006,
      respectively.




F-29




**(15)
      SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)**




Quarter
                  EndedDecember
                  31,
              
              September
                  30,
              
              June
                  30,
              
              March
                  31,2007
              
              2007
              
              2007
              
              2007Continuing
                  Operations:Net
                  revenue
              
              $
              553,626
              
              $
              599,580
              
              $
              645,322
              
              $
              431,742Operating
                  expenses
              
              
              1,055,837
              
              
              1,382,573
              
              
              1,987,120
              
              
              2,025,763Operating
                  loss
              
              
              (502,211
              )
              
              (782,993
              )
              
              (1,341,798
              )
              
              (1,594,021
              )Loss
                  from continuing operations
              
              
              (237,285
              )
              
              (1,634,004
              )
              
              (1,923,020
              )
              
              (1,627,580
              )Discontinues
                  Operations, net of taxIncome
                  (loss) from operations
              
              
              23,576
              
              
              251,196
              
              
              157,024
              
              
              (1,161,036
              )Net
                  loss
              
              
              (213,709
              )
              
              (1,382,808
              )
              
              (1,765,996
              )
              
              (2,788,616
              )Net
                  loss applicable to common shareholders
              
              
              (213,709
              )
              
              (1,382,808
              )
              
              (1,765,996
              )
              
              (2,788,616
              )Basic
                  and diluted net loss per share:Continuing
                  operations
              
              $
              -
              
              $
              (0.01
              )
              $
              (0.01
              )
              $
              (0.01
              )Discontinued
                  operations
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              (0.01
              )Net
                  loss
              
              $
              -
              
              $
              (0.01
              )
              $
              (0.01
              )
              $
              (0.02
              )
  Quarter
                  EndedDecember
                  31,
              
              September
                  30,
              
              June
                  30,
              
              March
                  31,2006
              
              2006
              
              2006
              
              2006Continuing
                  Operations:Net
                  revenue
              
              $
              346,695
              
              $
              385,755
              
              $
              362,674
              
              $
              313,613Operating
                  expenses
              
              
              2,508,686
              
              
              2,163,485
              
              
              1,554,002
              
              
              2,071,962Operating
                  loss
              
              
              (2,161,991
              )
              
              (1,777,730
              )
              
              (1,191,328
              )
              
              (1,758,349
              )Loss
                  from continuing operations
              
              
              (2,168,753
              )
              
              (1,899,766
              )
              
              (1,106,737
              )
              
              (1,696,211
              )Discontinues
                  Operations, net of taxIncome
                  from operations
              
              
              (3,525,298
              )
              
              (1,052,614
              )
              
              (2,675,947
              )
              
              (2,848,402
              )Net
                  loss
              
              
              (5,694,051
              )
              
              (2,952,380
              )
              
              (3,782,684
              )
              
              (4,544,613
              )Net
                  loss applicable to common shareholders
              
              
              (5,694,051
              )
              
              (2,952,380
              )
              
              (3,782,684
              )
              
              (4,544,613
              )Basic
                  and diluted net loss per share:Continuing
                  operations
              
              $
              (0.01
              )
              $
              (0.01
              )
              $
              (0.01
              )
              $
              (0.01
              )Discontinued
                  operations
              
              $
              (0.02
              )
              $
              (0.01
              )
              $
              (0.01
              )
              $
              (0.02
              )Net
                  loss
              
              $
              (0.03
              )
              $
              (0.02
              )
              $
              (0.02
              )
              $
              (0.03
              )




F-30




**(16)
      SUBSEQUENT EVENTS**





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





As
      part
      of the purchase consideration for the Proposed Tralliance Transaction, Mr.
      Egan
      and certain of his affiliates, including Dancing Bear, the E&C Partnerships
      and Certified Tours, Inc. will exchange and surrender all of their right, title
      and interest to the 2005 Convertible Notes and 2007 Convertible Notes, accrued
      and unpaid interest thereon, as well as accrued and unpaid rent and
      miscellaneous fees that are due and outstanding as of the date of the closing
      of
      the Proposed Tralliance Transaction. At December 31, 2007, amounts due under
      the
      2005 Convertible Notes and 2007 Convertible Notes, accrued and unpaid interest
      thereon, and accrued and unpaid rent and miscellaneous fees totaled
      approximately $4,650,000, $955,000 and $440,000, respectively, which amounts
      collectively equal $6,045,000 (see Note 8, “Debt” for additional
      details).





As
      additional consideration, The Registry Management Company will pay an earn-out
      to theglobe equal to 10% (subject to certain minimums) of The Registry
      Management Company’s net revenue derived from “.travel” names registered by The
      Registry Management Company through May 5, 2015. The total net present value
      of
      the minimum guaranteed earn-out payments is estimated to be approximately
      $1,300,000, bringing the total purchase consideration for the Proposed
      Tralliance Transaction to approximately $7,345,000 (based upon December 31,
      2007
      liability balances as discussed above).





The
      Proposed Tralliance Transaction is subject to the negotiation and closing of
      a
      definitive purchase agreement, receipt of an independent fairness opinion,
      and
      shareholder approval. The Proposed Tralliance Transaction is expected to close
      no earlier that the second quarter of 2008. The foregoing description is
      preliminary in nature and there may be significant changes between such
      preliminary terms and the terms of any final definitive purchase agreement.
      As
      of March 27, 2008, the Company and The Registry Management Company continue
      to
      work toward finalizing a definitive agreement, however as of such date, no
      definitive agreement has been entered into.




F-31




**ITEM
      9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE**





None.





**ITEM
      9A (T). CONTROLS AND PROCEDURES**





**A.
      Disclosure Controls and Procedures**


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





Our
      Chief
      Executive Officer and Chief Financial Officer have evaluated the effectiveness
      of our disclosure controls and procedures as of December 31, 2007. Based on
      that
      evaluation, our Chief Executive Officer and our Chief Financial Officer have
      concluded that our disclosure controls and procedures are effective in alerting
      them in a timely manner to material information regarding us (including our
      consolidated subsidiaries) that is required to be included in our periodic
      reports to the SEC.





**B.
      Management’s Annual Report on Internal Control and Financial
      Reporting**





The
      Company’s management, under the supervision of the Chief Executive Officer and
      the Chief Financial Officer, is responsible for establishing and maintaining
      adequate internal control over financial reporting (as defined in Rules 13a
      -
      15(f) and 15d - 15(f) under the Exchange Act). Internal control over financial
      reporting is a process designed to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial statements
      for external purposes in accordance with GAAP. Internal control over financial
      reporting includes policies and procedures that:





(i)
            pertain
                to the maintenance of records that, in reasonable detail, accurately
                and
                fairly reflect the transactions and dispositions of the assets of
                the
                Company;





(ii)
            provide
                reasonable assurance that transactions are recorded as necessary
                to permit
                preparation of financial statements in accordance with GAAP, and
                that
                receipts and expenditures of the Company are being made only in accordance
                with authorizations of management and directors of the Company;
                and





(iii)
            provide
                reasonable assurance regarding prevention or timely detection of
                unauthorized acquisition, use, or disposition of the Company’s assets that
                could have a material effect on the financial
                statements.





Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with existing policies or procedures may deteriorate.





Under
      the
      supervision of the Chief Executive Officer and the Chief Financial Officer,
      the
      Company’s management conducted an evaluation of the Company’s internal control
      over financial reporting as of December 31, 2007 in accordance with the
      interpretive guidance published in the SEC’s “Commission Guidance Regarding
      Management’s Report on Internal Control Over Financial Reporting Under Section
      13(a) or 15(d) of the Securities Exchange Act of 1934” dated and effective on
      June 27, 2007. Such evaluation was based on the framework and criteria
      established in “Internal Control - Integrated Framework” issued by the Committee
      of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon this
      evaluation and management’s assessment, management has concluded that internal
      control over financial reporting was not effective as of December 31, 2007
      as a
      result of the material weaknesses described below.





A
      material weakness is a control deficiency, or combination of control
      deficiencies, that results in a reasonable possibility that a material
      misstatement of the annual or interim financial statements will not be prevented
      or detected. In connection with management’s assessment of the Company’s
      internal control over financial reporting referred to above, management has
      identified the following material weaknesses in the Company’s internal control
      over financial reporting as of December 31, 2007.





1.
      The
      Company outsources a significant portion of its “.travel” domain name
      registration process to a third party registry operator, who is responsible
      for
      (i) directly receiving all transaction data and fees related to “.travel” name
      registrations, (ii) disbursing to the Company its portion of collected
      registration fees, and (iii) issuing periodic accounting reports, which detail
      and summarize such transactions and fees, to the Company. The Company relies
      upon and uses such accounting reports as its basis for recording “.travel” name
      registration revenue and operating expense transactions.




34





The
      Company is currently unable to independently verify the completeness and
      accuracy of the “.travel” name registration data reported by its third party
      registry operator. Additionally, the Company has not been able to satisfactorily
      assess the operating effectiveness of the controls in place at this service
      organization, and such third party registry operator currently in unable to
      provide a Type 2 SAS 70 report that the Company could alternatively place
      reliance on.





2.
      The
      Company enters the “.travel” name registration data reported by its third party
      registry operator into a number of internal databases. These databases are
      maintained by various employees and/or independent contractors engaged by the
      Company, outside of the direct control of the Company’s central accounting
      department. Information from these databases are used for various purposes,
      including determining contractual amounts payable to a number of third party
      enterprises, independent contractors and employees. Because the Company is
      currently unable to adequately verify the accuracy and completeness of the
      data
      contained in such databases, the correctness of amounts paid or to be paid
      to
      such enterprises and individuals cannot be assured. Management has concluded
      that there is a reasonable possibility that both of the aforementioned control
      deficiencies, individually or in combination thereof, could result in a material
      misstatement of the Company’s revenue, operating expense, current assets,
      current liabilities and deferred revenue accounts. As a result, these control
      deficiencies represent material weaknesses as of December 31, 2007.





At
      the
      present time, management has not yet decided on a definite course of action
      to
      be taken with respect to remediating the material weaknesses described above.
      Among other things, the Company’s liquidity and future business prospects,
      including the potential sale of its Tralliance “.travel” domain registration
      business (see Note 16, “Subsequent Events” of the accompanying Notes to
      Consolidated Financial Statements for further details) will be significant
      factors to be considered in this regard.





Because
      we are a smaller public company, we are not yet required to provide an
      independent public accountant’s attestation report covering our assessment of
      internal control over financial reporting. At the present time, such attestation
      report will be first required in connection with our annual report as of
      December 31, 2009.





**C.
      Changes in Internal Control over Financial Reporting**





Our
      management, with the participation of our Chief Executive Officer, have
      evaluated any change in our internal control over financial reporting that
      occurred during the quarter ended December 31, 2007 that has materially
      affected, or is reasonably likely to materially affect, our internal control
      over financial reporting, and have determined there to be no reportable
      changes.




**ITEM
      9B. OTHER INFORMATION**





None.





**PART
      III**




**ITEM
      10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**





The
      following table sets forth the names, ages and current positions with the
      Company held by our Directors and Executive Officers. There is no immediate
      family relationship between or among any of the Directors or Executive Officers,
      and the Company is not aware of any arrangement or understanding between any
      Director or Executive Officer and any other person pursuant to which he was
      elected to his current position. Each of the following persons are Directors
      of
      the Company.





NAME
            
            AGE
            
            POSITION
                OR OFFICE WITHTHE
                COMPANY
            
            DIRECTORSINCEMichael
                S. Egan
            
            67
            
            Chairman
                and Chief Executive Officer
            
            1997Edward
                A. Cespedes
            
            42
            
            President,
                Treasurer and Chief Financial Officer and Director
            
            1997Robin
                S. Lebowitz
            
            43
            
            Vice
                President of Finance and Director
            
            2001





Michael
      S. Egan. Michael Egan has served as theglobe’s Chairman since 1997 and as its
      Chief Executive Officer since June 1, 2002. Since 1996, Mr. Egan has been the
      controlling investor of Dancing Bear Investments, Inc., a privately held
      investment company. Additionally, Mr. Egan is the controlling investor of
      E&C Capital Partners LLLP and E&C Capital Partners II, LLLP, privately
      held investment partnerships. Mr. Egan is also Chairman of Certified Vacations,
      a privately held wholesale travel company which was founded in 1980. Certified
      Vacations specializes in designing, marketing and delivering vacation packages.
      Mr. Egan spent over 30 years in the rental car business. **** He began
      with Alamo Rent-A-Car in 1973, became an owner in 1979, and became Chairman
      and
      majority owner from January 1986 until November 1996 when he sold the company
      to
      AutoNation. In 2000, AutoNation spun off the rental division, ANC Rental
      Corporation (Other OTC: ANCXZ.PK), and Mr. Egan served as Chairman until October
      2003. Prior to acquiring Alamo, he held various administration positions at
      Yale
      University and taught at the University of Massachusetts at Amherst. Mr. Egan
      is
      a graduate of Cornell University where he received his Bachelor’s degree in
      Hotel Administration.




35





Edward
      A.
      Cespedes. Edward Cespedes has served as a director of theglobe since 1997,
      as
      President of theglobe since June 1, 2002 and as Treasurer and Chief Financial
      Officer of theglobe since February 1, 2005. Mr. Cespedes is also the President
      of E&C Capital Ventures, Inc., the general partner of E&C Capital
      Partners LLLP. Mr. Cespedes served as the Vice Chairman of Prime Ventures,
      LLC,
      from May 2000 to February 2002. From August 2000 to August 2001, Mr. Cespedes
      served as the President of the Dr. Koop Lifecare Corporation and was a member
      of
      the Company’s Board of Directors from January 2001 to December 2001. From 1996
      to 2000, Mr. Cespedes was a Managing Director of Dancing Bear Investments,
      Inc.
      Concurrent with his position at Dancing Bear Investments, Inc., from 1998 to
      2000, Mr. Cespedes also served as Vice President for corporate development
      for
      theglobe where he had primary responsibility for all mergers, acquisitions,
      and
      capital markets activities. In 1996, prior to joining Dancing Bear Investments,
      Inc., Mr. Cespedes was the Director of Corporate Finance for Alamo Rent-A-Car.
      From 1988 to 1996, Mr. Cespedes worked in the Investment Banking Division of
      J.P. Morgan and Company, where he most recently focused on mergers and
      acquisitions. In his capacity as a venture capitalist, Mr. Cespedes has served
      as a member of the board of directors of various portfolio companies. Mr.
      Cespedes is the founder of the Columbia University Hamilton Associates, a
      foundation for university academic endowments. In 1988 Mr. Cespedes received
      a
      Bachelor’s degree in International Relations from Columbia
      University.





Robin
      S.
      Lebowitz. Robin Lebowitz has served as a director of theglobe since December
      2001, as Secretary of theglobe since June 1, 2002, and as Vice President of
      Finance of theglobe since February 23, 2004. Ms. Lebowitz also served as
      Treasurer of theglobe from June 1, 2002 until February 23, 2004 and as Chief
      Financial Officer of theglobe from July 1, 2002 until February 23, 2004. Ms.
      Lebowitz has worked in various capacities for the Company’s Chairman, Michael
      Egan, for thirteen years. She is the Controller/Managing Director of Dancing
      Bear Investments, Inc., Mr. Egan’s privately held investment management and
      holding company. Previously, Ms. Lebowitz served on the Board of Directors
      of
      theglobe from August 1997 to October 1998. At Alamo Rent-A-Car, she served
      as
      Financial Assistant to the Chairman (Mr. Egan). Prior to joining Alamo, Ms.
      Lebowitz was the Corporate Tax Manager at Blockbuster Entertainment Group where
      she worked from 1991 to 1994. From 1986 to 1989, Ms. Lebowitz worked in the
      audit and tax departments of Arthur Andersen & Co. Ms. Lebowitz received a
      Bachelor of Science in Economics from the Wharton School of the University
      of
      Pennsylvania; a Masters in Business Administration from the University of Miami
      and is a Certified Public Accountant.





**INVOLVEMENT
      IN CERTAIN LEGAL PROCEEDINGS**





None.





**COMPLIANCE
      WITH SECTION 16(A) OF THE EXCHANGE ACT**





Section
      16(a) of the Securities and Exchange Act of 1934 requires our officers and
      directors, and persons who own more than ten percent (10%) of a registered
      class
      of our equity securities, to file certain reports regarding ownership of, and
      transactions in, our securities with the SEC and with The NASDAQ Stock Market,
      Inc. Such officers, directors, and 10% stockholders are also required to furnish
      theglobe with copies of all Section 16(a) forms that they file.





Based
      solely on our review of copies of Forms 3 and 4 and any amendments furnished
      to
      us pursuant to Rule 16a-3(e) and Forms 5 and any amendments furnished to us
      with
      respect to the 2005 fiscal year, and any written representations referred to
      in
      Item 405(b)(2)(i) of Regulation S-K stating that no Forms 5 were required,
      we
      believe that, during the 2007 and 2006 fiscal year, our officers, directors
      and
      all persons owning more than 10% of a registered class of our equity securities
      have complied with all Section 16(a) applicable filing
      requirements.




**CODE
      OF ETHICS**





The
      Company has adopted a Code of Ethics applicable to its officers, including
      its
      principal executive officer, principal financial officer, principal accounting
      officer or controller and any other persons performing similar functions. The
      Code of Ethics will be provided free of charge by the Company to interested
      parties upon request. Requests should be made in writing and directed to the
      Company at the following address: 110 East Broward Boulevard; Suite 1400; Fort
      Lauderdale, Florida 33301.





**BOARD
      MEETINGS AND COMMITTEES OF THE BOARD**





Including
      unanimous written actions of the Board, the Board of Directors met 15 times
      in
      2007. No incumbent director who was on the Board for the entire year attended
      less than 75% of the total number of all meetings of the Board and any
      committees of the Board on which he or she served, if any, during 2007. ****




36





The
      Board
      of Directors has a standing Audit and Compensation Committee but no standing
      Nominating Committee.





*Audit
      Committee.* The
      Audit Committee, which was formed in July 1998, reviews, acts on and reports
      to
      the Board of Directors with respect to various auditing and accounting matters,
      including the selection of our independent auditors, the scope of the annual
      audits, fees to be paid to the auditors, the performance of our auditors and
      our
      accounting practices and internal controls. The Audit Committee operates
      pursuant to a written charter, as amended, adopted by the Board of Directors
      on
      June 12, 2000. The current members of the Audit Committee are Messrs. Egan
      and
      Cespedes and Ms. Lebowitz, all of whom are employee directors. None of the
      current committee members are considered “independent” within the meaning of
      applicable NASD rules. Ms. Lebowitz serves as the “audit committee financial
      expert” within the meaning of applicable SEC rules, but is not considered
“independent” within the meaning of applicable NASD rules. Including unanimous
      written actions of the Committee, the Audit Committee held 5 meetings in
      2007.





*Compensation
      Committee* . The
      Compensation Committee, which met 2 times in 2007 (including unanimous written
      actions of the Committee), establishes salaries, incentives and other forms
      of
      compensation for officers and other employees of theglobe. The Compensation
      Committee (as well as the entire Board of Directors) also approves option grants
      under all of our outstanding stock based incentive plans. The current members
      of
      the Compensation Committee are Messrs. Egan and Cespedes.





*Nominating
      Committee* . The
      Board of Directors does not have a separate nominating committee. Rather, the
      entire Board of Directors acts as nominating committee. Based on the Company’s
      Board currently consisting only of employee directors, the Board of Directors
      does not believe the Company would derive any significant benefit from a
      separate nominating committee. Due primarily to their status as employees of
      the
      Company, none of the members of the Board are “independent” as defined in the
      NASD listing standards. The Company does not have a Nominating Committee
      charter.





In
      recommending director candidates in the future (including director candidates
      recommended by stockholders), the Board intends to take into consideration
      such
      factors as it deems appropriate based on the Company’s current needs. These
      factors may include diversity, age, skills, decision-making ability,
      inter-personal skills, experience with businesses and other organizations of
      comparable size, community activities and relationships, and the
      interrelationship between the candidate’s experience and business background,
      and other Board members’ experience and business background, whether such
      candidate would be considered “independent”, as such term is defined in the NASD
      listing standards, as well as the candidate’s ability to devote the required
      time and effort to serve on the Board.





The
      Board
      will consider for nomination by the Board director candidates recommended by
      stockholders if the stockholders comply with the following requirements. Under
      our By-Laws, if a stockholder wishes to nominate a director at the Annual
      Meeting, we must receive the stockholder’s written notice not less than 60 days
      nor more than 90 days prior to the date of the annual meeting, unless we give
      our stockholders less than 70 days’ notice of the date of our Annual Meeting. If
      we provide less than 70 days’ notice, then we must receive the stockholder’s
      written notice by the close of business on the 10th day after we provide notice
      of the date of the Annual Meeting. The notice must contain the specific
      information required in our By-Laws. A copy of our By-Laws may be obtained
      by
      writing to the Corporate Secretary. If we receive a stockholder’s proposal
      within the time periods required under our By-Laws, we may choose, but are
      not
      required, to include it in our proxy statement. If we do, we may tell the other
      stockholders what we think of the proposal, and how we intend to use our
      discretionary authority to vote on the proposal. All proposals should be made
      in
      writing and sent via registered, certified or express mail, to our executive
      offices, 110 East Broward Boulevard, Suite 1400, Fort Lauderdale, Florida 33301,
      Attention: Robin S. Lebowitz, Corporate Secretary.





*Shareholder
      Communications with the Board of Directors.* Any
      shareholder who wishes to send communications to the Board of Directors should
      mail them addressed to the intended recipient by name or position in care of:
      Corporate Secretary, theglobe.com, inc., 110 East Broward Boulevard, Suite
      1400,
      Fort Lauderdale, Florida, 33301. Upon receipt of any such communications, the
      Corporate Secretary will determine the identity of the intended recipient and
      whether the communication is an appropriate shareholder communication. The
      Corporate Secretary will send all appropriate shareholder communications to
      the
      intended recipient. An "appropriate shareholder communication" is a
      communication from a person claiming to be a shareholder in the communication,
      the subject of which relates solely to the sender’s interest as a shareholder
      and not to any other personal or business interest.





In
      the
      case of communications addressed to the Board of Directors, the Corporate
      Secretary will send appropriate shareholder communications to the Chairman
      of
      the Board. In the case of communications addressed to any particular directors,
      the Corporate Secretary will send appropriate shareholder communications to
      such
      director. In the case of communications addressed to a committee of the Board,
      the Corporate Secretary will send appropriate shareholder communications to
      the
      Chairman of such committee.





**ATTENDANCE
      AT ANNUAL MEETINGS**





The
      Board
      of Directors encourages, but does not require, its directors to attend the
      Company’s annual meeting of stockholders. The Company did not hold an annual
      meeting last year.





37




**ITEM
      11. EXECUTIVE COMPENSATION**





**COMPENSATION
      DISCUSSION AND ANALYSIS**





**OVERVIEW**





The
      Company’s compensation program is intended to meet three principal objectives
      (1) attract, reward, and retain executive officers and other key employees;
      (2)
      motivate these individuals to achieve short-term and long-term corporate goals
      that enhance stockholder value; and (3) promote internal equity and external
      competitiveness. Our Compensation Committee, which for all periods included
      in
      this Compensation Discussion and Analysis, consisted of Mr. Michael S. Egan,
      our
      Chairman and Chief Executive Officer and Mr. Edward A. Cespedes, our President,
      Treasurer, Chief Financial Officer and a Director (See “Corporate Governance -
      Compensation Committee”), establishes our compensation policies as well as
      detail compensation plans and specific compensation levels for all Company
      employees and executives, including themselves. The Compensation Committee
      also
      administers the Company’s equity incentive plans.





The
      Compensation Committee’s compensation policies are based upon the following
      principles:





·
            Compensation
                levels should be competitive with pay plans for positions of similar
                responsibility at other companies of comparable complexity and
                size.





·
            Compensation
                plans should reward both individual performance and the achievement
                of the
                Company’s short-term and long-term strategic, operating and financial
                goals.





·
            Compensation
                levels should be higher for senior individuals with greater responsibility
                and greater ability to influence our achievement of strategic, operating
                and financial goals.





·
            Incentive
                compensation should be a greater part of total compensation for senior
                individuals with greater responsibility and the opportunity to create
                greater stockholder value.





**EMPLOYMENT
      AGREEMENTS**





On
      August
      1, 2003, we entered into separate employment agreements with each of our named
      executive officers. The employment agreements with the Chief Executive Officer
      and President each provide for an annual base salary of $250,000 with
      eligibility to receive annual increases as determined in the sole discretion
      of
      the Board of Directors and an annual cash bonus, which will be awarded upon
      the
      achievement of specified pre-tax operating income, not to be less than $50,000
      per year. Effective October 1, 2007, these employment agreements were amended
      so
      as to irrevocably terminate the Company’s obligation to pay guaranteed annual
      minimum bonuses of $50,000 to these officers in the future. The employment
      agreement, as amended, with the Vice President of Finance currently provides
      for
      an annual base salary of $140,000 and a discretionary annual cash bonus, awarded
      at the discretion of the Board of Directors.





Additionally,
      each of the employment agreements with the named executive officers provide
      for
      (i) employment as one of our executives; (ii) participation in all welfare,
      benefit and incentive plans, including equity based compensation plans, offered
      to senior management; and (iii) a term of employment which commenced on August
      1, 2003 through the first anniversary thereof, and which automatically extends
      for one day each day unless either the Company or the executive provides written
      notice to the other not to further extend. Each of the employment agreements
      also provides for certain payments and/or benefits upon termination, which
      are
      more fully described under the section, “Potential Payments Upon Termination or
      Change In Control”.





**ELEMENTS
      OF COMPENSATION**





Our
      executive compensation program has three primary elements: base salary, annual
      performance-based cash bonuses and the potential for long-term equity
      incentives. These primary elements are supplemented by the opportunity to
      participate in health, welfare and benefit plans that are generally available
      to
      all of our employees.





Base
      Salary . We
      provide our executive officers with base salary to provide them with a fixed
      base amount of compensation for services rendered during the fiscal year. We
      believe this is consistent with competitive practices and will help assure
      we
      retain qualified leadership in those positions. Base salary for each of our
      executive officers was initially established in their respective August 1,
      2003
      employment agreements, with no base salary increases subsequently awarded to
      any
      executive officer.




38





Cash
      Bonus .
      Additional compensation in the form of annual cash bonuses is made in accordance
      with each executive officer’s employment agreement, where applicable or at the
      discretion of the Compensation Committee, taking into account the performance
      and contributions made by the executive officers of theglobe. All executive
      officers bonuses are approved by the full Board. Our rationale for paying annual
      cash bonuses was based upon our desire to encourage achievement of short-term
      and long-term financial and operating results and to reward our executive
      officers for their performance in achieving desired results. For the 2007 fiscal
      year, no cash bonuses were awarded to any of our executive officers. For the
      2006 fiscal year, cash bonuses of $50,000 each were awarded to Messrs. Egan
      and
      Cespedes, representing the minimal required amounts specified in their
      employment agreements, and a cash bonus of $25,000 was awarded to Robin S.
      Lebowitz, our Vice President of Finance. All 2006 fiscal year bonuses were
      paid
      in January 2007. For the 2005 fiscal year, cash bonuses of $1,500,000 each
      were
      awarded to Messrs. Egan and Cespedes and a $125,000 bonus was awarded to Ms.
      Lebowitz. The 2005 fiscal year bonuses were based principally on the
      contributions made by each of the aforementioned executive officers in selling
      the SendTec marketing services business on October 31, 2005 for net cash
      proceeds totaling approximately $23.0 million, or a ten (10) times
      cash-over-cash return. All 2005 fiscal year bonuses were paid in November
      2005.





Long-Term
      Equity Incentives .
      Long-term incentives are provided primarily by stock option grants. The grants
      are designed to align the interest of each executive officer with those of
      the
      stockholder and provide each executive officer with a significant incentive
      to
      manage the Company from the perspective of an owner with an equity stake in
      the
      business. Each grant allows the executive officer to acquire shares of the
      Company’s Common Stock at a fixed price per share (the market price on the date
      of grant) over a specified time period (generally up to 10 years). The number
      of
      shares subject to each option grant is set at a level intended to create a
      meaningful opportunity for stock ownership based on the officer’s current
      position with the Company, the base salary associated with that position, the
      individual’s potential for increasing stockholder value, and the individual’s
      personal performance. The Compensation Committee does not adhere to any specific
      guidelines as to the relative option holding of the Company’s executive
      officers, nor does it have any program, plan or practice to time the grant
      of
      stock options in coordination with material non-public information.





Health,
      Welfare and Benefit Plans . To be
      competitive in attracting and retaining qualified personnel, we offer a standard
      range of health and welfare benefits to all employees, including our executive
      officers. These benefits include medical, prescription drugs and dental
      coverage, life insurance and disability and accidental death and dismemberment
      insurance. Under the benefit plans, the cost of employee coverage, including
      executive officers’ coverage, is borne 100% by the Company. All employees, with
      the exception of the executive officers, contribute towards the cost of spousal
      and dependent health insurance coverage **.** Additionally,
      during 2006 and 2005 annual car allowances totaling $17,000 were paid to both
      our Chairman and our President. During 2006, a $10,000 car allowance was paid
      to
      our Vice President of Finance. No car allowances were paid to any of our
      executive officers during 2007.





Deductibility
      of Compensation over $1 Million .
      Section 162(m) of the Internal Revenue Code imposes a limit of $1 million,
      unless compensation is performance-based or another exception applies, on the
      amount that a publicly held corporation may deduct in any year for the
      compensation paid to its chief executive officer and the four other most highly
      compensated executive officers. The cash compensation paid to executive officers
      for each of the 2007 and 2006 fiscal years did not exceed the $1 million limit
      per officer. During the 2005 fiscal year, however, Messrs. Egan and Cespedes’
compensation both exceeded $1 million. Therefore, in filing our 2005 federal
      and
      state income tax returns, our compensation deductions for executive officer
      pay
      were limited. However, current year losses and available prior year net
      operating losses were utilized in filing our 2005 returns, which served to
      eliminate substantially all of the incremental income taxes that would have
      been
      otherwise paid at that time. We are mindful of the potential impact that Section
      162(m) may have on the income taxes that the Company may have to pay in the
      future and intend generally to structure our compensation arrangements, where
      feasible, to eliminate or minimize the impact of the Section 162(m)
      limitations.





Termination
      and Change-in-Control Payments . On
      August 1, 2003, the Company entered into separate employment agreements with
      each of our current executive officers that specify, among other things, the
      obligation of the Company in the case of termination or change-in-control.
      The
      Company’s obligations under these employment agreements are described in more
      detail in a subsequent section of this Report on Form 10-K which is entitled
      “Potential Payments Upon Termination or Change-In-Control.” These employment
      agreements were entered into to induce our executive officers to perform their
      roles and to continue employment with the Company for an extended period of
      time. The particular events which trigger termination payments under the
      employment agreements are generally based upon customary business practices
      in
      the United States.




39




**SUMMARY
      COMPENSATION TABLE**





The
      following table sets forth information concerning compensation for services
      in
      all capacities awarded to, earned by or paid by us to those persons serving
      as
      the principal executive officer and principal financial officer at any time
      during the last calendar year and our other executive officer for the year
      ended
      December 31, 2007 (collectively, the "Named Executive Officers"):




Name
                and Principal Position
            
            Year
            
            Salary
              ($)
            
            Bonus
              ($)
            
            Option
              Awards
                (1)
              ($)
            
            All
                Other (2)
              ($)
            
            Total
              ($)Michael
                S. Egan,
            
            
            2007
            
            
            250,000
            
            
            0
            
            
            0
            
            
            (6
            )
            
            251,163Chairman,
                Chief Executive
            
            
            2006
            
            
            250,000
            
            
            50,000
            
            
            0
            
            
            17,868
            
            
            317,868Officer
                (3)
            
            
            2005
            
            
            250,000
            
            
            1,500,000
            
            
            175,000
            
            
            17,987
            
            
            1,942,987Edward
                A. Cespedes,
            
            
            2007
            
            
            250,000
            
            
            0
            
            
            0
            
            
            16,418
            
            
            266,418President,
                Treasurer and Chief
            
            
            2006
            
            
            250,000
            
            
            50,000
            
            
            0
            
            
            33,605
            
            
            333,605Financial
                Officer (4)
            
            
            2005
            
            
            250,000
            
            
            1,500,000
            
            
            175,000
            
            
            31,714
            
            
            1,956,714Robin
                S. Lebowitz,
            
            
            2007
            
            
            140,000
            
            
            0
            
            
            0
            
            
            15,182
            
            
            155,182Former
                Chief Financial Officer;
            
            
            2006
            
            
            140,000
            
            
            25,000
            
            
            13,000
            
            
            25,580
            
            
            203,580Vice
                President of Finance (5)
            
            
            2005
            
            
            140,000
            
            
            125,000
            
            
            40,000
            
            
            14,632
            
            
            319,632





(1)
      Amounts represent the aggregate grant date fair value of stock options in
      accordance with Statement of Financial Accounting Standards No. 123R. See Note
      1, “Organization and Summary of Significant Accounting Policies - Stock Based
      Compensation,” and Note 11, “Stock Option Plans,” in the accompanying
      consolidated financial statements as of December 31, 2007 and for the year
      then
      ended for information regarding the assumptions used in the valuation of stock
      option awards.





(2)
      Other
      compensation includes the cost of life, disability and accidental death and
      dismemberment insurance premiums paid on behalf of the named executive officers
      and for 2005 and 2006, car allowances paid to the named executive officers.
      In
      the case of the President and the Vice President of Finance, other compensation
      also includes the cost of medical and dental insurance coverage for the named
      executive officer, their spouse and dependents, as applicable.





(3)
      Mr.
      Egan became an executive officer in July 1998. We began paying Mr. Egan a base
      salary in July 2003. The 2005 option awards include a grant of 1,750,000 options
      at an exercise price of $0.12 per share.





(4)
      Mr.
      Cespedes became President in June 2002 and Treasurer and Chief Financial Officer
      in February 2005. The 2005 option awards include a grant of 1,750,000 options
      at
      an exercise price of $0.12 per share.





(5)
      Ms.
      Lebowitz became an officer of the Company in June 2002 and Chief Financial
      Officer in July 2002. In February 2004, Ms. Lebowitz resigned her position
      as
      Chief Financial Officer and became Vice President of Finance. The option awards
      include grants of 400,000 and 100,000 options at an exercise price of $0.12
      and
      $0.14 per share in 2005 and 2006, respectively.





(6)
      Not
      reported as the aggregate of the items was less than $10,000.




40




There
      were no plan-based awards made to the Named Executive Officers in
      2007.




**OUTSTANDING
      EQUITY AWARDS AT FISCAL 2007 YEAR-END**





Number
                of Securities
              Underlying
                Unexercised Options (1)
            
            Option
                Exercise
            
            Option
                ExpirationName
            
            Exercisable
                (#)
            
            Unexercisable
                (#)
            
            Price
                ($)
            
            DateMichael
                S. Egan
            
            
            50,000
            
            
            —
            
            $
            4.50
            
            
            7/16/2008179,798
            
            
            —
            
            
            4.50
            
            
            8/1/200820,202
            
            
            —
            
            
            4.95
            
            
            8/1/200870,000
            
            
            —
            
            
            15.75
            
            
            1/6/200910,000
            
            
            —
            
            
            6.69
            
            
            2/17/20107,500
            
            
            —
            
            
            0.23
            
            
            6/27/20117,500
            
            
            —
            
            
            0.04
            
            
            6/21/20122,500,000
            
            
            —
            
            
            0.02
            
            
            8/13/20121,000,000
            
            
            —
            
            
            0.56
            
            
            5/22/20131,750,000
            
            
            —
            
            
            0.12
            
            
            4/7/2015Edward
                A. Cespedes
            
            
            50,000
            
            
            —
            
            $
            4.50
            
            
            7/16/20087,500
            
            
            —
            
            
            4.50
            
            
            8/1/200850,000
            
            
            —
            
            
            15.75
            
            
            1/6/200915,000
            
            
            —
            
            
            6.69
            
            
            2/17/201020,000
            
            
            —
            
            
            2.50
            
            
            4/18/20107,500
            
            
            —
            
            
            2.38
            
            
            6/8/20107,500
            
            
            —
            
            
            0.23
            
            
            6/27/20117,500
            
            
            —
            
            
            0.04
            
            
            6/21/20121,750,000
            
            
            —
            
            
            0.02
            
            
            8/13/2012550,000
            
            
            —
            
            
            0.56
            
            
            5/22/20131,750,000
            
            
            —
            
            
            0.12
            
            
            4/7/2015Robin
                S. Lebowitz
            
            
            1,580
            
            
            —
            
            $
            1.59
            
            
            5/31/201025,000
            
            
            —
            
            
            0.05
            
            
            12/14/20117,500
            
            
            —
            
            
            0.04
            
            
            6/21/2012500,000
            
            
            —
            
            
            0.02
            
            
            8/13/2012100,000
            
            
            —
            
            
            0.56
            
            
            5/22/2013400,000
            
            
            —
            
            
            0.12
            
            
            4/7/2015100,000
            
            
            —
            
            
            0.14
            
            
            8/16/2016




(1)
      All
      stock option awards included in the above table are fully vested. None of the
      named executive officers exercised any stock options during the year ended
      December 31, 2007.





41




**POTENTIAL
      PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL**





The
      Company has entered into separate employment agreements with each of the named
      executive officers which specify the obligations of the Company, as well as
      the
      named executive officer in the case of termination or a
      change-in-control.





Each
      of
      the employment agreements provide for payments to be made to the executive
      officers if they are terminated “without cause” or if the executive terminates
      with “good reason”, or in the event that the executive officer’s employment is
      terminated as a result of disability or death. Events which may be considered
      “good reason” as defined by the employment agreements include:





(a)
      any
      change in the duties, responsibilities or status of the executive officer that
      is inconsistent in any material and adverse respect with the executive’s
      position, duties, responsibilities or status with the Company;




(b)
      a
      material and adverse change in the executive officer’s titles or offices held
      with the Company;





(c)
      a
      reduction in the executive officer’s base salary, guaranteed bonus or bonus
      opportunity;





(d)
      the
      relocation of the Company’s principal executive offices or the executive
      officer’s own office location to a location more than 25 miles outside of Fort
      Lauderdale, Florida;





(e)
      any
      refusal by the Company or any affiliate to continue to permit the executive
      officer to engage in activities not directly related to the business of the
      Company which the executive officer was permitted to engage as of the date
      the
      employment agreement was entered into;





(f)
      any
      reason following a change in control, as defined by the employment agreement;
      or





(g)
      any
      other breach of a material provision of the employment agreement by the Company
      or any affiliate.





Each
      of
      the employment agreements between the Company and the Chief Executive Officer
      and the President provide, in the case of termination by the Company without
      cause or termination by the executive officer for good reason, the payment
      within five days of such termination of (i) any accrued and unpaid base salary;
      (ii) a pro-rated incentive payment, as defined by the agreement, for the current
      year through the date of termination; (iii) any accrued vacation pay; and (iv)
      a
      Lump-Sum Cash Payment (“Lump-Sum Cash Payment”) equal to ten times the sum of
      the executive officer’s base salary and highest annual incentive, as defined by
      the employment agreement. In addition, the employment agreements provide that
      the Company shall maintain in full force and effect, for a period of ten years
      following the date of termination, the medical, hospitalization, dental and
      life
      insurance programs in which the executive officer, his spouse and his dependents
      were participating immediately prior to the date of termination at the level
      in
      effect and upon substantially the same terms and conditions as existed
      immediately prior to the date of termination. Such insurance benefits terminate
      on the date the executive officer receives equivalent coverage and benefits
      under the plans or programs of a subsequent employer. The employment agreements
      also provide for the acceleration of vesting of any stock, stock option, stock
      appreciation right or similar awards, as of the date of termination and permit
      the executive officer to exercise such awards until the earlier of (i) the
      third
      anniversary of the date of termination or (ii) the end of the term of the
      award.





The
      employment agreement between the Company and the Vice President of Finance
      provides for, in the case of termination by the Company without cause or
      termination by the executive officer for good reason, payments and benefits
      similar to the employment agreements of the Chief Executive Officer and
      President except that the Lump-Sum Cash Payment shall equal two times the sum
      of
      the Vice President of Finance’s base salary and highest annual incentive and the
      Company will be required to maintain insurance benefits for a period of two
      years following the date of termination.







In
      the
      event the named executive officer’s employment is terminated as a result of
      disability, the employment agreements provide for the payment of all accrued
      salary and benefits through the termination date, including a pro-rated
      incentive payment, as defined by the agreement, as well as the payment of
      insurance benefits for a period of one year subsequent to
      termination.





In
      the
      event the named executive officer’s employment is terminated as a result of the
      officer’s death, the employment agreements provide for the payment of all
      accrued salary and benefits through the termination date. Additionally, the
      employment agreements specify that the Company shall provide the named executive
      officer’s spouse and dependents with insurance benefits for a period of ten
      years in the case of the Chief Executive Officer and the President and for
      a
      period of one year in the case of the Vice President of Finance.





Assuming
      the named executive officers were terminated by the Company without cause or
      the
      named executive officers terminated with good reason as of December 31, 2007,
      Lump-Sum Cash Payments totaling $7,667,000 would be payable to each of the
      Chief
      Executive Officer and the President of the Company and a Lump-Sum Cash Payment
      totaling $380,000 would be payable to the Vice President of Finance of the
      Company. In addition, the Company’s estimated obligation for insurance benefits
      to be provided for the Chief Executive Officer, the President and the Vice
      President of Finance in accordance with their respective employment agreement
      totaled approximately $12,000, $165,000 and $30,000, respectively.




42


**COMPENSATION
      OF DIRECTORS**





Directors
      who are also our employees receive no compensation for serving on our Board
      or
      committees. We reimburse non-employee directors for all travel and other
      expenses incurred in connection with attending Board and committee meetings.
      Non-employee directors are also eligible to receive automatic stock option
      grants under our 1998 Stock Option Plan, as amended and restated. As of December
      31, 2007 there were no directors who met this definition.





Each
      director who becomes an eligible non-employee director for the first time
      receives an initial grant of options to acquire 25,000 shares of our Common
      Stock. In addition, each eligible non-employee director will receive an annual
      grant of options to acquire 7,500 shares of our Common Stock on the first
      business day following each annual meeting of stockholders that occurs while
      the
      1998 Stock Option Plan or 2000 Stock Option Plan is in effect. These stock
      options will be granted with per share exercise prices equal to the fair market
      value of our common stock as of the date of grant.




**COMPENSATION
      COMMITTEE**





**COMPENSATION
      COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION**





Michael
      S. Egan, theglobe’s Chairman and Chief Executive Officer and Edward A. Cespedes,
      theglobe’s President, Treasurer and Chief Financial Officer and Director served
      as members of the Compensation Committee of the Board of Directors during 2007.
      Although certain relationships and related transactions between Messrs. Egan
      and
      Cespedes and theglobe are disclosed in the section of this Annual Report on
      Form
      10-K entitled “Certain Relationships and Related Transactions,” none of these
      relationships or transactions relate to interlocking directorships or
      compensation committees.




**COMPENSATION
      COMMITTEE REPORT**





The
      Compensation Committee of the Board of Directors establishes our general
      compensation policies as well as the compensation plans and specific
      compensation levels for executive officers. The Compensation Committee also
      administers our stock based incentive plans for executive officers.





The
      Compensation Committee has reviewed and discussed the information provided
      within the “Compensation Discussion and Analysis” section of this Annual Report
      on Form 10-K with management and based on this review, the Compensation
      Committee has recommended to the entire Board of Directors that the
“Compensation Discussion and Analysis” be included in the Company’s Annual
      Report on Form 10-K for the year ended December 31, 2007.





**COMPENSATION
      COMMITTEE:**





Michael
      S. Egan


Edward A. Cespedes




**ITEM
      12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS**





The
      following table sets forth certain information regarding beneficial ownership
      of
      our Common Stock as of March 5, 2008 (except as otherwise indicated) by (i)
      each
      person who owns beneficially more than 5% of our Common Stock, (ii) each of
      our
      directors, (iii) each of our "Named Executive Officers" and (iv) all directors
      and executive officers as a group. A total of 172,484,838 shares of theglobe’s
      Common Stock were issued and outstanding on March 5, 2008.





The
      amounts and percentage of common stock beneficially owned are reported on the
      basis of regulations of the Securities and Exchange Commission ("SEC") governing
      the determination of beneficial ownership of securities. Under the rules of
      the
      SEC, a person is deemed to be a "beneficial owner" of a security if that person
      has or shares "voting power," which includes the power to vote or to direct
      the
      voting of such security, or "investment power," which includes the power to
      dispose of or to direct the disposition of such security. A person is also
      deemed to be a beneficial owner of any securities of which that person has
      a
      right to acquire beneficial ownership within 60 days. Under these rules, more
      than one person may be deemed a beneficial owner of the same securities and
      a
      person may be deemed to be a beneficial owner of securities as to which such
      person has no economic interest. Unless otherwise indicated below, the address
      of each person named in the table below is in care of theglobe.com, inc., P.O.
      Box 029006, Fort Lauderdale, Florida 33302.




43




SHARES BENEFICIALLY OWNEDDIRECTORS,
                  NAMED EXECUTIVE OFFICERS AND 5% STOCKHOLDERS
            
            NUMBER
            
            PERCENT
            
            TITLE
                  OF CLASSDancing
                Bear Investments, Inc. (1)
            
            
            133,303,148
            
            
            44.8
            %
            
            CommonMichael
                S. Egan (1)(2)(6)(7)(8)
            
            
            274,699,034
            
            
            72.1
            %
            
            CommonEdward
                A. Cespedes (3)
            
            
            4,215,000
            
            
            2.4
            %
            
            CommonRobin
                S. Lebowitz (4)
            
            
            1,134,080
            
            
            *
            
            
            CommonCarl
                Ruderman (5)
            
            
            10,000,000
            
            
            5.5
            %
            
            CommonE&C
                Capital Partners, LLLP (6)(8)
            
            
            82,469,012
            
            
            38.1
            %
            
            CommonE&C
                Capital Partners II, LLLP(7)
            
            
            40,000,000
            
            
            19.4
            %
            
            CommonAll
                directors and executive officersas
                a group (3 persons)
            
            
            280,048,114
            
            
            72.4
            %
            
            Common





*
      less
      than 1%





(1)
      Mr.
      Egan owns Dancing Bear Investments, Inc. Includes 125,000,000 shares of our
      common stock issuable upon the conversion of the 2007 Convertible
      Notes.





(2)
      Includes the shares that Mr. Egan is deemed to beneficially own as the
      controlling investor of Dancing Bear Investments, Inc., E&C Capital
      Partners, LLLP, and E&C Capital Partners II, LLLP and as the Trustee of the
      Michael S. Egan Grantor Retained Annuity Trusts for the benefit of his children.
      Also includes (i) 5,595,000 shares of our Common Stock issuable upon exercise
      of
      options that are currently exercisable; (ii) 3,541,337 shares of our Common
      Stock held by Mr. Egan's wife, as to which he disclaims beneficial ownership;
      and (iii) 204,082 shares of our Common Stock issuable upon exercise of warrants
      at $1.22 per share owned by Mr. Egan and his wife.





(3)
      Consists of 4,215,000 shares of our Common Stock issuable upon exercise of
      options that are currently exercisable.





(4)
      Consists of 1,134,080 shares of our Common Stock issuable upon exercise of
      options that are currently exercisable.





(5)
      Consists of 10,000,000 shares of Common Stock issuable upon the exercise of
      warrants at $0.15 per share.





(6)
      E&C Capital Partners, LLLP is a privately held investment vehicle controlled
      by our Chairman, Michael S. Egan. Our President, Edward A. Cespedes, has a
      minority, non-controlling interest in E&C Capital Partners, LLLP. Includes
      34,000,000 shares of our Common Stock issuable upon the conversion of the
      Convertible Notes. Also, includes 10,000,000 shares of Common Stock if and
      to
      the extent issued upon exercise of the warrants described in footnote (5) over
      which E&C holds an irrevocable proxy pursuant to the Stockholders’ Agreement
      described in footnote (8) below.





(7)
      E&C Capital Partners II, LLLP is a privately held investment vehicle
      controlled by our Chairman, Michael S. Egan. Includes 34,000,000 shares of
      our
      Common Stock issuable upon the conversion of the Convertible Notes.





(8)
      In
      connection with certain Marketing Services Agreements entered with Universal
      Media of Miami, Inc. and Trans Digital Media, LLC on November 22, 2006, the
      Company entered into a warrant purchase agreement with Carl Ruderman, the
      controlling shareholder of such entities. In connection with the issuance of
      the
      warrants, Mr. Ruderman entered into a Stockholders’ Agreement with our Chairman
      and Chief Executive Officer, Michael S. Egan, our President, Edward A. Cespedes,
      and certain of their affiliates. Pursuant to the Stockholders’ Agreement, Mr.
      Ruderman granted an irrevocable proxy over the shares issuable upon exercise
      of
      the warrants to E&C Capital Partners, LLLP and granted a right of first
      refusal over his shares to all of the other parties to the Stockholders’
Agreement. Mr. Ruderman also agreed to sell his shares under certain
      circumstances in which the other parties to the Stockholders’ Agreement have
      agreed to sell their respective shares. Mr. Ruderman was granted the right
      to
      participate in certain sales of the Company’s Common Stock by the other parties
      to the Stockholders’ Agreement. The amount set forth in the table includes
      10,000,000 shares of Common Stock if and to the extent issued upon exercise
      of
      the warrants described in footnote (5) over which E&C holds such irrevocable
      proxy.





44





**ITEM
      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE**





Transactions
      with Related Persons .





Certain
      directors of the Company also serve as officers and directors of and own
      controlling interests in Dancing Bear Investments, Inc. ("Dancing Bear"),
      E&C Capital Partners LLLP, E&C Capital Partners II, LLLP, The Registry
      Management Company, LLC, Labigroup Holdings, LLC and Search.Travel LLC. Dancing
      Bear, E&C Capital Partners, LLLP and E&C Capital Partners II, LLLP are
      stockholders of the Company and are entities controlled by our
      Chairman.





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





As
      part
      of the purchase consideration for the Proposed Tralliance Transaction, Mr.
      Egan
      and certain of his affiliates, including Dancing Bear, the E&C Partnerships
      and Certified Tours, Inc. will exchange and surrender all of their right, title
      and interest to the 2005 Convertible Notes and 2007 Convertible Notes, accrued
      and unpaid interest thereon, as well as accrued and unpaid rent and
      miscellaneous fees that are due and outstanding as of the date of the closing
      of
      the Proposed Tralliance Transaction. At December 31, 2007, amounts due under
      the
      2005 Convertible Notes and 2007 Convertible Notes, accrued and unpaid interest
      thereon, and accrued and unpaid rent and miscellaneous fees totaled
      approximately $4,650,000, $955,000 and $440,000, respectively, which amounts
      collectively equal $6,045,000 (see Note 8, “Debt” of the Notes to Consolidated
      Financial Statements for additional details).





As
      additional consideration, The Registry Management Company will pay an earn-out
      to theglobe equal to 10% (subject to certain minimums) of The Registry
      Management Company’s net revenue derived from “.travel” names registered by The
      Registry Management Company through May 5, 2015. The total net present value
      of
      the minimum guaranteed earn-out payments is estimated to be approximately
      $1,300,000, bringing the total purchase consideration for the Proposed
      Tralliance Transaction to approximately $7,345,000 (based upon December 31,
      2007
      liability balances as discussed above).





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





On
      December 20, 2007, Tralliance entered into a Bulk Registration Co-Marketing
      Agreement (the “Co-Marketing Agreement”) with Labigroup Holdings, LLC
      (“Labigroup”), under Tralliance’s bulk purchase program. Labigroup is a private
      entity controlled by the Company’s Chairman and our remaining directors own a
      minority interest in Labigroup. Under the Co-Marketing Agreement, Labigroup
      committed to purchase a predetermined minimum number of “.travel” domain names
      on a bulk basis from an accredited “.travel” registrar of its own choosing and
      to establish a predetermined minimum number of related “.travel” websites. As
      consideration for the “.travel” domain names to be purchased under the
      Co-Marketing Agreement, Labigroup agreed to pay certain fixed fees and make
      certain other payments including, but not limited to, an ongoing royalty
      calculated as a percentage share of its net revenue, as defined in the
      Co-Marketing Agreement (the “Labigroup Royalties”), to Tralliance. The
      Co-Marketing Agreement has an initial term which expires September 30, 2010
      after which it may be renewed for successive periods of two and three years,
      respectively. During the period from December 20, 2007 through December 31,
      2007, Labigroup registered 164,708 “.travel” domain names under the Co-Marketing
      Agreement. As of December 31, 2007, Labigroup has paid $262,500 and is obligated
      to pay an additional $412,050 in fees and costs to Tralliance under the
      Co-Marketing Agreement. Such amounts, which are equal to the amount of
      incremental fees and costs incurred by Tralliance in registering these bulk
      purchase names, have been treated as a reimbursement of these incremental fees
      and costs in the Company’s financial statements. The Company plans to recognize
      revenue related to this Co-Marketing Agreement only to the extent that Labigroup
      Royalties are earned.. No such revenue has been recorded as of December 31,
      2007.





On
      December 13, 2007, the Company entered into and closed an Assignment, Conveyance
      and Bill of Sale Agreement with Search.Travel, LLC (“Search.Travel”). Pursuant
      to this agreement, Tralliance sold all of its rights relating to the
      www.search.travel domain name, website and related assets to Search.Travel
      for a
      purchase price of $380,000, which was paid in cash at the closing date.
      Search.Travel is a private entity controlled by the Company’s Chairman, of which
      our remaining directors also own a minority interest. The purchase price was
      determined by the Board of Directors taking into account the valuation given
      to
      the assets by an independent investment banking firm. A gain on the sale of
      search.travel in the amount of $379,791 was recognized and has been included
      within Other Income in the Consolidated Statement of Operations for the year
      ended December 31, 2007.





On
      May
      29, 2007, Dancing Bear entered into a note purchase agreement (the “2007
      Agreement”) with the Company pursuant to which Dancing Bear acquired a secured
      demand convertible promissory note (the “2007 Convertible Note”) in the amount
      of $250,000. Under the terms of the 2007 Agreement, Dancing Bear was granted
      the
      optional right, for a period of 180 days from the date of the 2007 Agreement,
      to
      purchase additional 2007 Convertible Notes such that the aggregate principal
      amount issued under the 2007 Agreement could total $3,000,000. On June 25,
      2007,
      July 19, 2007 and September 6, 2007, Dancing Bear acquired additional 2007
      Convertible Notes in the principal amounts of $250,000, $500,000 and $250,000,
      respectively. At December 31, 2007, the aggregate principal amount of 2007
      Convertible Notes totaled $1,250,000. Interest associated with the 2007
      Convertible Notes of approximately $58,600 was charged to expense during the
      year ended December 31, 2007, and remained outstanding at December 31,
      2007.




45





The
      2007
      Convertible Notes are convertible at anytime prior to payment into shares of
      the
      Company’s Common Stock at the rate of $0.01 per share.  The conversion
      price of the 2007 Convertible Notes is subject to adjustment upon the occurrence
      of certain events, including with respect to stock splits or combinations.
      Assuming full conversion of all 2007 Convertible Notes that are outstanding
      at
      December 31, 2007 at the initial conversion rate, and without regard to
      potential anti-dilutive adjustments resulting from stock splits and the like,
      125,000,000 shares of the Company’s Common Stock would be issued to Dancing
      Bear. The 2007 Convertible Notes are due five days after demand for payment
      by
      Dancing Bear and are secured by a pledge of all of the assets of the Company
      and
      its subsidiaries, subordinate to existing liens on such assets.  The 2007
      Convertible Notes bear interest at the rate of ten percent per annum.





On
      April
      2, 2007, theglobe agreed to transfer to Michael Egan all of its VoIP
      intellectual property in consideration for his agreement to provide certain
      security and credit enhancements in connection with the MySpace litigation
      Settlement Agreement (See Note 13, “Litigation”, for further discussion). The
      Company had previously written off the value of the VoIP intellectual property
      as a result of its evaluation of the VoIP telephony services business’
long-lived assets in connections with the preparation of the Company’s 2004
      year-end consolidated financial statements.





On
      November 22, 2006, the Company entered into a License Agreement (the “License
      Agreement”) with Speecho, LLC which granted a license to use the Company’s chat,
      VoIP and video communications technology for a minimum license fee of $10,000
      per month with an initial term of ten years. The Company’s Chairman, the
      Company’s President and the Company’s Vice President of Finance, as well as
      certain other employees of the Company, are members of a company that owns
      50%
      of the membership interests in Speecho, LLC. Due to various technology related
      problems, the License Agreement was terminated in August 2007. No revenue was
      ever recognized by the Company related to the License
      Agreement.





On
      November 22, 2006, the Company entered into certain Marketing Services
      Agreements (the “Marketing Services Agreements”) with two entities whereby the
      entities agreed to market certain of the Company’s products in exchange for
      certain commissions and promotional fees and which granted the Company exclusive
      right to certain uses of a tradename in connection with certain of the Company’s
      websites. Additionally, on November 22, 2006, in connection with the Marketing
      Services Agreements, the Company entered into a Warrant Purchase Agreement
      with
      Carl Ruderman, the controlling shareholder of the entities. The Warrant Purchase
      Agreement provides for the issuance to Mr. Ruderman of one warrant to purchase
      5,000,000 shares of the Company’s Common Stock at an exercise price of $0.15 per
      share with a three year term and a second warrant to purchase 5,000,000 shares
      of the Company’s Common Stock at an exercise price of $0.15 per share with a
      term of four years. Each warrant provides for the extension of the exercise
      term
      by an additional three years if certain criteria are met under the Marketing
      Services Agreements. The Warrant Purchase Agreement grants to Mr. Ruderman
      “piggy-back” registration rights with respect to the shares of the Company’s
      Common Stock issuable upon exercise of the warrants.





In
      connection with the issuance of the warrants, on November 22, 2006, Mr. Ruderman
      entered into a Stockholders’ Agreement with Mr. Egan, the Company’s chairman and
      chief executive officer, Mr. Cespedes, the Company’s president and certain of
      their affiliates. Pursuant to the Stockholders’ Agreement, Mr. Ruderman granted
      an irrevocable proxy over the shares issuable upon exercise of the warrants
      to
      E&C Capital Partners, LLLP and granted a right of first refusal over his
      shares to all of the other parties to the Stockholders’ Agreement. Mr. Ruderman
      also agreed to sell his shares under certain circumstances in which the other
      parties to the Stockholders’ Agreement have agreed to sell their respective
      shares. Mr. Ruderman was also granted the right to participate in certain sales
      of the Company’s Common Stock by the other parties to the Stockholders’
Agreement.





On
      April
      22, 2005, E&C Capital Partners, LLLP and E&C Capital Partners II, LLLP
      (the "E&C Partnerships"), entities controlled by the Company's Chairman and
      Chief Executive Officer, entered into a note purchase agreement (the "2005
      Agreement") with theglobe pursuant to which they acquired convertible promissory
      notes (the "2005 Convertible Notes") in the aggregate principal amount of
      $1,500,000. Under the terms of the 2005 Agreement, the E&C Partnerships were
      also granted the optional right, for a period of 90 days from the date of the
      2005 Agreement, to purchase additional 2005 Convertible Notes such that the
      aggregate principal amount of 2005 Convertible Notes issued under the 2005
      Agreement could total $4,000,000 (the "2005 Option"). On June 1, 2005, the
      E&C Partnerships exercised a portion of the 2005 Option and acquired an
      additional $1,500,000 of 2005 Convertible Notes. On July 18, 2005, the E&C
      Partnerships exercised the remainder of the 2005 Option and acquired an
      additional $1,000,000 of 2005 Convertible Notes.





The
      2005
      Convertible Notes are convertible at the option of the E&C Partnerships into
      shares of the Company's Common Stock at an initial price of $0.05 per share.
      During the year ended December 31, 2005, an aggregate of $600,000 of 2005
      Convertible Notes were converted by the E&C Partnerships into an aggregate
      of 12,000,000 shares of the Company’s Common Stock. At both December 31, 2007
      and 2006, the total principal amount of 2005 Convertible Notes outstanding
      was
      $3,400,000. Assuming full conversion of all 2005 Convertible Notes which remain
      outstanding as of December 31, 2007, an additional 68,000,000 shares of the
      Company's Common Stock would be issued to the E&C Partnerships. The 2005
      Convertible Notes provide for interest at the rate of ten percent per annum
      and
      are secured by a pledge of substantially all of the assets of the Company.
      The
      2005 Convertible Notes are due and payable five days after demand for payment
      by
      the E&C Partnerships. Interest associated with the 2005 Convertible Notes of
      approximately $340,000, $340,000 and $216,200 was charged to expense during
      the
      years ended December 31, 2007, 2006 and 2005, respectively, and remained unpaid
      at December 31, 2007.




46





Several
      entities controlled by our Chairman have provided services to the Company and
      several of its subsidiaries, including: the lease of office and warehouse space;
      and the outsourcing of customer service and warehouse functions for the
      Company's VoIP operation. During the first quarter of 2005, an entity controlled
      by our Chairman also began performing human resource and payroll processing
      functions for the Company and several of its subsidiaries. During the years
      ended December 31, 2007, 2006 and 2005, a total of approximately $394,000,
      $466,000 and $386,000 of expense was recorded related to these services,
      respectively. Approximately $440,000 and $158,000 related to these services
      was
      included in accounts payable and accrued expenses at December 31, 2007 and
      2006,
      respectively.





Tralliance
      Corporation, which was acquired May 9, 2005, subleased office space in New
      York
      City on a month-to-month basis from an entity controlled by its former
      President. A total of approximately $13,000 and $41,000 in rent expense related
      to this month-to-month sublease was included in the accompanying statement
      of
      operations for the years ended December 31, 2007 and 2006,
      respectively.





Review,
      Approval or Ratification of Transactions with Related Persons . The
      Board of Directors has adopted a Code of Ethics and Business Conduct, which
      applies to all officers, employees and directors of the Company. The Code of
      Ethics and Business Conduct describes the Company’s policies and standards for
      protecting the Company’s integrity and provides guidance to the Company’s
      officers, employees and directors in recognizing and reporting activities that
      conflict with, or have the appearance of conflicting with, the interests of
      the
      Company and its stockholders. The Code of Ethics and Business Conduct provides
      that no officer, employee or director of the Company shall derive any personal
      gain from any Company activity unless the transaction has been fully disclosed
      to and approved in writing by the Company’s Compliance Officer, Ms. Lebowitz, or
      the Board of Directors as the case may be.





Director
      Independence . None
      of the current members of the Company’s Board of Directors are considered
“independent” within the meaning of applicable NASD rules





**ITEM
      14. PRINCIPAL ACCOUNTING FEES AND SERVICES**





Audit
      Fees . The
      aggregate fees billed by Rachlin Cohen & Holtz LLP (“Rachlin Cohen”),
      independent public accountants, for professional services rendered for the
      audit
      of our annual financial statements during 2007 and 2006 and the reviews of
      the
      financial statements included in our Forms 10-Q and 10-K, as appropriate, were
      $81,529 and $128,625, respectively.





Audit-Related
      Fees . During
      the last two fiscal years, Rachlin Cohen provided the Company with the following
      services that are reasonably related to the performance of the audit of our
      financial statements:





The
      Company incurred no assurance and related services related to audits and review
      for various SEC filings (including S-8’s, proxy and private placements) during
      2007 or 2006.; and





Other
      services relating to consultation and research of various accounting
      pronouncements and technical issues were $518 for 2007 and $3,340 for
      2006.





Tax
      Fees . The
      aggregate fees billed for tax services provided by Rachlin Cohen in connection
      with tax compliance, tax consulting and tax planning services during 2007 and
      2006, were $81,358 and $88,860, respectively.





All
      Other Fees . Except
      as described above, the Company had no other fees for services provided by
      Rachlin Cohen during 2007 and 2006.





Pre-Approval
      of Services by the External Auditor . In
      April 2004, the Audit Committee adopted a policy for pre-approval of audit
      and
      permitted non-audit services by the Company’s external auditor. The Audit
      Committee will consider annually and, if appropriate, approve the provision
      of
      audit services by its external auditor and consider and, if appropriate,
      pre-approve the provision of certain defined audit and non-audit services.
      The
      Audit Committee will also consider on a case-by-case basis and, if appropriate,
      approve specific engagements that are not otherwise pre-approved. The Audit
      Committee pre-approved the audit related engagements and tax services billed
      by
      the amounts described above.




47




**PART
      IV**





**ITEM
      15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**




(a).
            
            List
                of all documents filed as part of this report.(1)
            
            Financial
                statements are listed in the index to the consolidated financial
                statements on page F-1 of this Report.(2)
            
            No
                financial statement schedules are included because they are not applicable
                or are not required or the information required to be set forth therein
                is
                included in the consolidated financial statements or notes
                thereto.(3)
            
            Exhibit
                Index3.1
            
            Form
                of Fourth Amended and Restated Certificate of Incorporation of the
                Company
                (3).3.2
            
            Certificate
                of Amendment to Fourth Amended and Restated Certificate of Incorporation
                (16).3.3
            
            Certificate
                of Amendment to Fourth Amended and Restated Certificate of Incorporation
                filed with the Secretary of State of Delaware on July 29, 2003
                (16).3.4
            
            Certificate
                relating to Previously Outstanding Series of Preferred Stock and
                Relating
                to the Designation, Preferences and Rights of the Series F Preferred
                Stock
                (12).3.5
            
            Certificate
                of Amendment Relating to the Designation Preferences and Rights of
                the
                Junior Participating Preferred Stock (13).3.6
            
            Form
                of By-Laws of the Company (16).3.7
            
            Certificate
                of Amendment Relating to the Designation Preferences and Rights of
                the
                Series H Automatically Converting Preferred Stock (15).3.8
            
            Certificate
                of Amendment to Fourth Amended and Restated Certificate of Incorporation
                filed with the Secretary of State of Delaware on December 1, 2004
                (18).4.1
            
            Registration
                Rights Agreement, dated as of September 1, 1998 (5).4.2
            
            Amendment
                No.1 to Registration Rights Agreement, dated as of April 9, 1999
                (6).4.3
            
            Specimen
                certificate representing shares of Common Stock of the Company
                (4).4.4
            
            Amended
                and Restated Warrant to Acquire Shares of Common Stock
                (2).4.5
            
            Form
                of Rights Agreement, by and between the Company and American Stock
                Transfer & Trust Company as Rights Agent (3).4.6
            
            Form
                of Warrant dated November 12, 2002 to acquire shares of Common Stock
                (8).4.7
            
            Form
                of Warrant dated March 28, 2003 to acquire shares of Common Stock
                (12).4.8
            
            Form
                of Warrant dated May 28, 2003 to acquire an aggregate of 500,000
                shares of
                theglobe.com Common Stock (9).4.9
            
            Form
                of Warrant dated July 2, 2003 to acquire securities of theglobe.com,
                inc.
                (10).4.10
            
            Form
                of Warrant dated March 5, 2004 to acquire securities of theglobe.com,
                inc.
                (14).4.11
            
            Form
                of Warrant relating to potential issuance of Earn-out Consideration
                (15).4.12
            
            Form
                of Secured Demand Convertible Promissory Note
                (19).





4.13
            
            Security
                Agreement dated April 22, 2005 by and between theglobe.com, inc.
                and
                certain other parties named therein
                (19).




48




4.14
            
            Unconditional
                Guaranty Agreement dated April 22, 2005 (19).4.15
            
            Security
                Agreement dated May 29, 2007 by and between theglobe.com, inc. and
                Dancing
                Bear Investments, Inc. (22).4.16
            
            Unconditional
                Guaranty Agreement dated May 29, 2007 (22).4.17
            
            $250,000
                Secured Demand Convertible Promissory Note dated May 29, 2007
                (22).4.18
            
            $250,000
                Secured Demand Convertible Promissory Note dated June 25, 2007
                (23).4.19
            
            $250,000
                Secured Demand Convertible Promissory Note dated July 19, 2007
                (24).4.20
            
            $250,000
                Secured Demand Convertible Promissory Note dated September 6, 2007
                (25).10.1
            
            Form
                of Indemnification Agreement between the Company and each of its
                Directors
                and Executive Officers (1).10.2
            
            2000
                Broad Based Stock Option Plan (7).**10.3
            
            1998
                Stock Option Plan, as amended (6).**10.4
            
            1995
                Stock Option Plan (1).**10.5
            
            Form
                of Subscription Agreement relating to the purchase of Units of Series
                G
                Preferred Stock and Warrants of theglobe.com, inc.
                (10).10.6
            
            Employment
                Agreement dated August 1, 2003 between theglobe.com, inc. and Michael
                S.
                Egan (11).**10.7
            
            Employment
                Agreement dated August 1, 2003 between theglobe.com, inc. and Edward
                A.
                Cespedes (11).**10.8
            
            Employment
                Agreement dated August 1, 2003 between theglobe.com, inc. and Robin
                Segaul
                Lebowitz (11).**10.9
            
            Amended
                & Restated Non-Qualified Stock Option Agreement effective as of August
                12, 2002 between theglobe.com, inc. and Michael S. Egan
                (11).**10.10
            
            Amended
                & Restated Non-Qualified Stock Option Agreement effective as of August
                12, 2002 between theglobe.com, inc. and Edward A. Cespedes
                (11).**10.11
            
            Amended
                & Restated Non-Qualified Stock Option Agreement effective as of August
                12, 2002 between theglobe.com, inc. and Robin Segaul Lebowitz
                (11).**10.12
            
            2003
                Amended and Restated Non-Qualified Stock Option Plan
                (20).**





10.13
            
            theglobe.com
                2004 Amended and Restated Stock Option Plan (17).10.14
            
            Form
                of Potential Conversion Note relating to Series H Preferred Stock
                (15).10.15
            
            Note
                Purchase Agreement dated April 22, 2005 by and between theglobe.com,
                inc.
                and certain named investors (19).10.16
            
            .travel
                Sponsored TLD Registry Agreement dated May 5, 2005 by and between
                ICANN
                and Tralliance Corporation (21).





10.17
            
            Warrant
                Purchase Agreement dated as of November 22, 2006 by and between
                theglobe.com, inc. and Carl Ruderman (21).*10.18
            
            Stockholders’
                Agreement dated as of November 22, 2006 by and among theglobe.com,
                inc.,
                Michael S. Egan, Edward A. Cespedes, E&C Capital Partners, LLLP,
                E&C Capital Partners II, Ltd., Dancing Bear Investments, Inc. and Carl
                Ruderman (21).10.19
            
            Warrant
                to Acquire 5,000,000 shares of theglobe.com, inc. dated as of November
                22,
                2006 issued to Carl Ruderman (21).*10.20
            
            Warrant
                to Acquire 5,000,000 shares of theglobe.com, inc. dated as of November
                22,
                2006 issued to Carl Ruderman (21).*10.21
            
            Amended
                and Restated License Agreement dated as of January 26, 2007 by and
                between
                tglo.com, inc. and Speecho LLC
                (21).*




49


10.22
            
            NeuLevel
                Master Service Agreement dated as of October 11, 2005 by and between
                NeuLevel, Inc. and Tralliance Corporation (21).*10.23
            
            Settlement
                Agreement between MySpace, Inc. and theglobe.com, inc. and Michael
                Egan
                dated as of March 15, 2007 (21).10.24
            
            Marketing
                Services Agreement dated as of November 22, 2006 between theglobe.com,
                inc. and Trans Digital Media, LLC (21).*10.25
            
            Marketing
                Services Agreement dated as of November 22, 2006 between theglobe.com,
                inc. and Universal Media of Miami, Inc.(21).*10.26
            
            Note
                Purchase Agreement dated May 29, 2007 between theglobe.com, inc.
                and
                Dancing Bear Investments, Inc. (22).10.27
            
            Amendment
                to Employment Agreement dated October 1, 2007 between theglobe.com
                and
                Michael S. Egan (26).**10.28
            
            Amendment
                to Employment Agreement dated October 1, 2007 between theglobe.com
                and
                Edward A. Cespedes (26).**10.29
            
            Master
                Co-Marketing Agreement dated October 1, 2007 between Neustar, Inc.
                and
                Tralliance Corporation (26).*10.30
            
            Agreement
                Conveyance and Bill of Sale dated as of December 13, 2007 by and
                between
                theglobe.com, inc., Tralliance Corporation and Search.Travel LLC
                (27).10.31
            
            Letter
                of Intent Agreement dated as of February 1, 2008 by and between The
                Registry Management Company LLC, Tralliance Corporation and theglobe,com,
                inc. (28).10.32
            
            Bulk
                Registration Co-Marketing Agreement dated as of December 20, 2007
                by and
                between Tralliance Corporation and Labigroup Holdings, LLC.
                *21.
            
            Subsidiaries31.1
            
            Certification
                of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
                15d-14(a).31.2
            
            Certification
                of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
                15d-14(a).32.1
            
            Certification
                of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350
                as
                adopted pursuant to Section 906 of The Sarbanes-Oxley Act of
                2002.32.2
            
            Certification
                of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350
                as
                adopted pursuant to Section 906 of The Sarbanes-Oxley Act of
                2002.


1.
        Incorporated by reference from our registration statement on Form S-1 filed
        July
        24, 1998 (Registration No. 333-59751).


50





2.
      Incorporated by reference from our Form S-1/A filed August 20,
      1998.





3.
      Incorporated by reference from our Form S-1/A filed September 15,
      1998.





4.
      Incorporated by reference from our Form S-1/A filed October 14,
      1998.





5.
      Incorporated by reference from our Form 10-K for the year ended December 31,
      1998 filed March 30, 1999.





6.
      Incorporated by reference from our Form S-1 filed April 13, 1999.





7.
      Incorporated by reference from our Form 10-Q for the quarter ended March 31,
      2000 dated May 15, 2000.





8.
      Incorporated by reference from our Form 8-K filed on November 26,
      2002.





9.
      Incorporated by reference from our Form 8-K filed on June 6, 2003.





10.
      Incorporated by reference from our Form 8-K filed on July 11, 2003.





11.
      Incorporated by reference from our Form 10-QSB filed on November 14,
      2003.





12.
      Incorporated by reference from our Form 10-K filed on March 31,
      2003.





13.
      Incorporated by reference from our Registration Statement on Form SB-2 filed
      on
      April 16, 2004 (Registration No. 333-114556).





14.
      Incorporated by reference from our Form 8-K filed on March 17,
      2004.





15.
      Incorporated by reference from our Form 8-K filed September 7,
      2004.





16.
      Incorporated by reference from our Form SB-2 filed April 16, 2004.





17.
      Incorporated by reference from our S-8 filed October 13, 2004.





18.
      Incorporated by reference from our Form 8-K filed on December 2,
      2004.





19.
      Incorporated by reference from our Form 8-K filed on April 26,
      2005.





20.
      Incorporated by reference from our Form S-8 filed January 22, 2004.





21.
      Incorporated by reference from our Form 10-K filed on March 30,
      2007.





22.
      Incorporated by reference from our Form SC 13D/A-3 filed on May 30,
      2007.





23.
      Incorporated by reference from our Form 8-K filed on June 26, 2007.





24.
      Incorporated by reference from our Form 10-Q filed on July 23,
      2007.





25.
      Incorporated by reference from our Form 8-K filed on September 7,
      2007.





26.
      Incorporated by reference from our Form 10-Q/A filed on November 14,
      2007.





27.
      Incorporated by reference from our Form 8-K filed on December 20,
      2007.





28.
      Incorporated by reference from our Form 8-K filed on February 7,
      2008.





*
      Confidential portions of this exhibit have been omitted and filed separately
      with the Commission pursuant to a request for confidential
      treatment.




**
      Management contract or compensatory plan or arrangement.




51




**SIGNATURES**





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




theglobe.com,
                inc.Dated:
                March 27, 2008
            By:
            /s/ *Michael
              S. Egan**Michael
                S. Egan**Chief
                Executive Officer*
              *(Principal
                Executive Officer)* By:
            /s/ *Edward
              A.
              Cespedes**Edward
                A. Cespedes**President,
                Chief Financial Officer*
              *(Principal
                Financial Officer)*





Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed by the following persons on behalf of the Registrant in the capacities
      and on the dates indicated.




*/s/
                Michael S.
                Egan***
            
            *March
                27, 2008**Michael
                S. Egan**Chairman,
                Director**/s/
                Edward A. Cespedes*
            
            *March
                27, 2008**Edward
                A. Cespedes**Director**/s/
                Robin Lebowitz*
            
            *March
                27****,****2008**Robin
                Lebowitz**Director*




52




**EXHIBIT
      INDEX**





**NO.
      ITEM**


3.1
            
            Form
                of Fourth Amended and Restated Certificate of Incorporation of the
                Company
                (3).3.2
            
            Certificate
                of Amendment to Fourth Amended and Restated Certificate of Incorporation
                (16).3.3
            
            Certificate
                of Amendment to Fourth Amended and Restated Certificate of Incorporation
                filed with the Secretary of State of Delaware on July 29, 2003
                (16).3.4
            
            Certificate
                relating to Previously Outstanding Series of Preferred Stock and
                Relating
                to the Designation, Preferences and Rights of the Series F Preferred
                Stock
                (12).3.5
            
            Certificate
                of Amendment Relating to the Designation Preferences and Rights of
                the
                Junior Participating Preferred Stock (13).3.6
            
            Form
                of By-Laws of the Company (16).3.7
            
            Certificate
                of Amendment Relating to the Designation Preferences and Rights of
                the
                Series H Automatically Converting Preferred Stock (15).3.8
            
            Certificate
                of Amendment to Fourth Amended and Restated Certificate of Incorporation
                filed with the Secretary of State of Delaware on December 1, 2004
                (18).4.1
            
            Registration
                Rights Agreement, dated as of September 1, 1998 (5).4.2
            
            Amendment
                No.1 to Registration Rights Agreement, dated as of April 9, 1999
                (6).4.3
            
            Specimen
                certificate representing shares of Common Stock of the Company
                (4).4.4
            
            Amended
                and Restated Warrant to Acquire Shares of Common Stock
                (2).4.5
            
            Form
                of Rights Agreement, by and between the Company and American Stock
                Transfer & Trust Company as Rights Agent (3).4.6
            
            Form
                of Warrant dated November 12, 2002 to acquire shares of Common Stock
                (8).4.7
            
            Form
                of Warrant dated March 28, 2003 to acquire shares of Common Stock
                (12).4.8
            
            Form
                of Warrant dated May 28, 2003 to acquire an aggregate of 500,000
                shares of
                theglobe.com Common Stock (9).





4.9
            
            Form
                of Warrant dated July 2, 2003 to acquire securities of theglobe.com,
                inc.
                (10).4.10
            
            Form
                of Warrant dated March 5, 2004 to acquire securities of theglobe.com,
                inc.
                (14).4.11
            
            Form
                of Warrant relating to potential issuance of Earn-out Consideration
                (15).4.12
            
            Form
                of Secured Demand Convertible Promissory Note (19).4.13
            
            Security
                Agreement dated April 22, 2005 by and between theglobe.com, inc.
                and
                certain other parties named therein
                (19).




4.14
            
            Unconditional
                Guaranty Agreement dated April 22, 2005 (19).4.15
            
            Security
                Agreement dated May 29, 2007 by and between theglobe.com, inc. and
                Dancing
                Bear Investments, Inc. (22).4.16
            
            Unconditional
                Guaranty Agreement dated May 29, 2007 (22).4.17
            
            $250,000
                Secured Demand Convertible Promissory Note dated May 29, 2007
                (22).4.18
            
            $250,000
                Secured Demand Convertible Promissory Note dated June 25, 2007
                (23).




53


4.19
            
            $500,000
                Secured Demand Convertible Promissory Note dated July 19, 2007
                (24).4.20
            
            $250,000
                Secured Demand Convertible Promissory Note dated September 6, 2007
                (25).10.1
            
            Form
                of Indemnification Agreement between the Company and each of its
                Directors
                and Executive Officers (1).10.2
            
            2000
                Broad Based Stock Option Plan (7).**10.3
            
            1998
                Stock Option Plan, as amended (6).**10.4
            
            1995
                Stock Option Plan (1).**10.5
            
            Form
                of Subscription Agreement relating to the purchase of Units of Series
                G
                Preferred Stock and Warrants of theglobe.com, inc.
                (10).10.6
            
            Employment
                Agreement dated August 1, 2003 between theglobe.com, inc. and Michael
                S.
                Egan (11).**10.7
            
            Employment
                Agreement dated August 1, 2003 between theglobe.com, inc. and Edward
                A.
                Cespedes (11).**10.8
            
            Employment
                Agreement dated August 1, 2003 between theglobe.com, inc. and Robin
                Segaul
                Lebowitz (11).**10.9
            
            Amended
                & Restated Non-Qualified Stock Option Agreement effective as of August
                12, 2002 between theglobe.com, inc. and Michael S. Egan
                (11).**10.10
            
            Amended
                & Restated Non-Qualified Stock Option Agreement effective as of August
                12, 2002 between theglobe.com, inc. and Edward A. Cespedes
                (11).**10.11
            
            Amended
                & Restated Non-Qualified Stock Option Agreement effective as of August
                12, 2002 between theglobe.com, inc. and Robin Segaul Lebowitz
                (11).**10.12
            
            2003
                Amended and Restated Non-Qualified Stock Option Plan
                (20).**10.13
            
            theglobe.com
                2004 Amended and Restated Stock Option Plan (17).10.14
            
            Form
                of Potential Conversion Note relating to Series H Preferred Stock
                (15).10.15
            
            Note
                Purchase Agreement dated April 22, 2005 by and between theglobe.com,
                inc.
                and certain named investors (19).10.16
            
            .travel
                Sponsored TLD Registry Agreement dated May 5, 2005 by and between
                ICANN
                and Tralliance Corporation (21).10.17
            
            Warrant
                Purchase Agreement dated as of November 22, 2006 by and between
                theglobe.com, inc. and Carl Ruderman (21).*10.18
            
            Stockholders’
                Agreement dated as of November 22, 2006 by and among theglobe.com,
                inc.,
                Michael S. Egan, Edward A. Cespedes, E&C Capital Partners, LLLP,
                E&C Capital Partners II, Ltd., Dancing Bear Investments, Inc. and Carl
                Ruderman (21).




10.19
            
            Warrant
                to Acquire 5,000,000 shares of theglobe.com, inc. dated as of November
                22,
                2006 issued to Carl Ruderman (21).*10.20
            
            Warrant
                to Acquire 5,000,000 shares of theglobe.com, inc. dated as of November
                22,
                2006 issued to Carl Ruderman (21).*10.21
            
            Amended
                and Restated License Agreement dated as of January 26, 2007 by and
                between
                tglo.com, inc. and Speecho LLC (21).*10.22
            
            NeuLevel
                Master Service Agreement dated as of October 11, 2005 by and between
                NeuLevel, Inc. and Tralliance Corporation (21).*10.23
            
            Settlement
                Agreement between MySpace, Inc. and theglobe.com, inc. and Michael
                Egan
                dated as of March 15, 2007 (21).10.24
            
            Marketing
                Services Agreement dated as of November 22, 2006 between theglobe.com,
                inc. and Trans Digital Media, LLC (21).*10.25
            
            Marketing
                Services Agreement dated as of November 22, 2006 between theglobe.com,
                inc. and Universal Media of Miami, Inc.
                (21).*




54


10.26
            
            Note
                Purchase Agreement dated May 29, 2007 between theglobe.com, inc.
                and
                Dancing Bear Investments, Inc. (22).10.27
            
            Amendment
                to Employment Agreement dated October 1, 2007 between theglobe.com
                and
                Michael S. Egan (26).**10.28
            
            Amendment
                to Employment Agreement dated October 1, 2007 between theglobe.com
                and
                Edward A. Cespedes (26).**10.29
            
            Master
                Co-Marketing Agreement dated October 1, 2007 between Neustar, Inc.
                and
                Tralliance Corporation (26).*10.30
            
            Assignment
                , Conveyance and Bill of Sale dated as of December 13, 2007 by and
                between
                theglobe.com, inc., Tralliance Corporation and Search.Travel LLC
                (27).10.31
            
            Letter
                of Intent Agreement dated as of February 1, 2008 by and between The
                Registry Management Company LLC, Tralliance Corporation and theglobe.com,
                inc. (28).10.32
            
            Bulk
                Registration Co-Marketing Agreement dated as of December 20, 2007
                by and
                between Tralliance Corporation and Labigroup Holdings, LLC.
                *21.
            
            Subsidiaries31.1
            
            Certification
                of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
                15d-14(a).31.2
            
            Certification
                of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
                15d-14(a).32.1
            
            Certification
                of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
                adopted pursuant to Section 906 of The Sarbanes-Oxley Act of
                2002.32.2
            
            Certification
                of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350
                as
                adopted pursuant to Section 906 of The Sarbanes-Oxley Act of
                2002.





1.
      Incorporated by reference from our registration statement on Form S-1 filed
      July
      24, 1998 (Registration No. 333-59751).




55





2.
      Incorporated by reference from our Form S-1/A filed August 20,
      1998.





3.
      Incorporated by reference from our Form S-1/A filed September 15,
      1998.





4.
      Incorporated by reference from our Form S-1/A filed October 14,
      1998.





5.
      Incorporated by reference from our Form 10-K for the year ended December 31,
      1998 filed March 30, 1999.





6.
      Incorporated by reference from our Form S-1 filed April 13, 1999.





7.
      Incorporated by reference from our Form 10-Q for the quarter ended March 31,
      2000 dated May 15, 2000.





8.
      Incorporated by reference from our Form 8-K filed on November 26,
      2002.





9.
      Incorporated by reference from our Form 8-K filed on June 6, 2003.





10.
      Incorporated by reference from our Form 8-K filed on July 11, 2003.





11.
      Incorporated by reference from our Form 10-QSB filed on November 14,
      2003.





12.
      Incorporated by reference from our Form 10-K filed on March 31,
      2003.





13.
      Incorporated by reference from our Registration Statement on Form SB-2 filed
      on
      April 16, 2004 (Registration No. 333-114556).





14.
      Incorporated by reference from our Form 8-K filed on March 17,
      2004.





15.
      Incorporated by reference from our Form 8-K filed September 7,
      2004.





16.
      Incorporated by reference from our Form SB-2 filed April 16, 2004.





17.
      Incorporated by reference from our S-8 filed October 13, 2004.





18.
      Incorporated by reference from our Form 8-K filed on December 2,
      2004.





19.
      Incorporated by reference from our Form 8-K filed on April 26,
      2005.





20.
      Incorporated by reference from our Form S-8 filed January 22, 2004.





21.
      Incorporated by reference from our Form 10-K filed on March 30,
      2007.





22.
      Incorporated by reference from our Form SC 13D/A-3 filed on May 30,
      2007.





23.
      Incorporated by reference from our Form 8-K filed on June 26, 2007.





24.
      Incorporated by reference from our Form 10-Q filed on July 23,
      2007.





25.
      Incorporated by reference from our Form 8-K filed on September 7,
      2007.





26.
      Incorporated by reference from our Form 10-Q/A filed on November 14,
      2007.





27.
      Incorporated by reference from our Form 8-K filed on December 20,
      2007.





28.
      Incorporated by reference from our Form 8-K filed on February 7,
      2008.





*
      Confidential portions of this exhibit have been omitted and filed separately
      with the Commission pursuant to a request for confidential
      treatment.





**
      Management contract or compensatory plan or arrangement.




56