TheGlobe.com to cut staff, fold sites
The online media company will close its community site and scale back its online gaming business, resulting in the elimination of nearly half its work force.
TheGlobe plans to close its community business site, as well as its small-business Web hosting site, on Aug. 15. In conjunction with the closures, the company will cut 60 positions, or 49 percent of its total work force of 121 employees, according to a company release.
Additionally, TheGlobe said it is "aggressively" looking for business partners in, or the potential sale of, its gaming assets, including properties Happy Puppy, Kids Domain and others.
TheGlobe has become the poster child for companies that successfully managed to cash in on the Internet frenzy that hypnotized Wall Street, but then crashed hard. The company attempted to build its business around advertising, but the recent economic downturn and a series of unconvincing strategies left it delisted and with few business alternatives.
The company's shares traded as high as $97 on its first day of trading, but now the shares trade below 25 cents, and the market cap lingers around $4 million.
TheGlobe.com held its prestigious record for the largest first-day gain for more than a year, until December 1999, when it was usurped by VA Linux Systems. VA Linux, priced at $30, hit the public markets and jumped to $299. VA Linux closed its first day at 239.25--a 697.50 percent pop.
But TheGlobe.com is remembered even more so than VA Linux for its starring role in the Internet implosion, which began when public markets took their first dive in April 2000, and have continued to fall almost continually since then.
The focus on the selling of its gaming sites is its best move right now, said Patrick Thomas, a NetRatings analyst who follows the Internet.
"Gamers tend to be a lucrative audience to target, and in that sense, TheGlobe is making the move that makes the most sense. They're moving towards their most profitable part of their business," Thomas said.
What the company will do after a sale or what the prospects for a sale are remain unclear. Calls to TheGlobe.com were not returned late Friday.
The company was founded by two Cornell University undergraduates, Stephan Paternot and Todd Krizelman, in 1994.