Where are they now: TheGlobe.com

David Cotriss — Thu, 29 May 2008 15:24:13 -0700

Founding: TheGlobe.com was launched in 1995 by Todd Krizelman and Stephan Paternot, who raised $15,000 in startup capital from family and friends. The company later received a $20 million private investment from former Alamo Rent-A-Car chief Michael Egan.

History: Long before anyone dreamed up MySpace or Facebook, two 20 year-old Cornell students – Todd Krizelman and Stephan Paternot – became pop culture icons when they launched TheGlobe.com in 1995. Having become icons of dot com mania, their story landed them an appearance on Oprah and dozens of other media outlets.

“TheGlobe.com was one of the first online communities," Paternot says in an email interview with The Industry Standard. "The goal was to use the Internet to help people connect with each other, and around topics of common interest. We thought the real power of the Internet was in helping people share their own thoughts with each other, and that interactions amongst themselves, now on a global level, would be far more valuable and revolutionary (and cost effective) than what non-interactive mass media had offered until then.”

The idea was enough for a history-making IPO in November 1998. The offer price was $9, but the stock opened at $87, rose to a high of $97, before closing the day at $63.50. This was the largest first-day gain of any IPO to date. Just two years later, the stock was trading at 53 cents and was delisted from the Nasdaq.

What Happened: In an attempt to achieve profitability, Charles Peck, former senior vice president of the American Institute of CPAs, was hired as the new CEO in July 2000 (see his account of his tenure and his appraisal of the company in the comments section, below). However, this didn’t prevent the eventual shutdown of TheGlobe community site in August 2001.

Where Are They Now? The story of TheGlobe.com’s failure is a familiar tale. “Simply put, we were 10 years too early,” Paternot tells The Standard. “It was a time when the market was oversaturated with competition, with too many venture capital dollars at work, way too little advertising revenues to support everyone, in addition to which much of the technology (software, hardware, bandwidth) was not mature or cost effective enough. So despite all the traffic we amassed (about 17 million users), it was hard to turn a profit.”

Paternot has since moved on to bigger and better things. He founded Actarus Funds to help entrepreneurs build their second or third Internet companies, and co-founded Palmstar Entertainment, a feature-film production company. “I enjoy this newfound creative balance far too much to want to go back to the mania days of the 90’s,” he says.

Todd Krizelman now runs MagazineRadar, a company that assists in print magazine ad sales. Charles Peck is now a consultant in the technology sector. TheGlobe.com domain now redirects to the home page of Tralliance Corporation, which maintains the .travel top level domain.

Were you an employee, customer, or client of this service? Then share your memories below! What did you like about the company? What didn't work? What other factors contributed to its success or failure?

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