Recently a great 6 page story ran in The New Yorker talking about the history of online communities, and how they’ve evolved into the social networking (ie “me media”) we now use today. Below is a brief excerpt related to theglobe.com, for the full story click on the link below.

http://www.newyorker.com/archive/2006/05/15/060515fa_fact_cassidy?currentPage=6

By John Cassidy

Online communities have existed since the dawn of the Internet era, and so has the desire to make them profitable. After Netscape went public, and surfing the Web became easy, a number of companies emerged to help people build Web pages, where they could post pictures and text. One of the first was theglobe.com, which two Cornell undergraduates, Stephen Paternot and Todd Krizelman, started in their dorm room in 1994. Within a year, theglobe.com had roughly two hundred and fifty thousand registered users, and it was generating about fourteen million page views a month. Using the slogan “A Whole New Life Awaits You,” the site advertised on MTV and on the sides of buses. In contrast to other home-page companies, such as GeoCities, theglobe.com encouraged its users to send messages to one another. “Our philosophy was more about people interacting with other people,” Paternot wrote in his 2001 memoir, “A Very Public Offering.” “Very quickly, everyone started using the term community. Everyone jumped on the bandwagon. Everyone became community.”

On November 13, 1998, theglobe-.com issued three million shares through the investment bank Bear Stearns, at a price of nine dollars each. By the end of the first day of trading, the stock price had jumped to $63.50. On paper, at least, Paternot and Krizelman were worth more than sixty million dollars each. Less than two years later, theglobe.com’s stock was trading at two dollars, and Paternot stepped down as co-chief executive.

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PHILLIPS: Google has gone public on the Nasdaq. The search engine that gave a whole new lexicon as in “Google it,” got out the blocks at $100 a share, $15 higher than its initial offering price. It is set to make its young founders instant billionaires. But before Google, there was the theglobe.com.

CNN’s Jen Rogers has been Googling that.

JEN ROGERS, CNNfn CORRESPONDENT (voice-over): He toasted champagne at the Nasdaq MarketSite, partied like a rock star at New York’s hippest clubs, and was the media’s Internet darling.

UNIDENTIFIED FEMALE: Do you feel rich?

ROGERS: Before the Google guys, Steph Paternot and his partner, Todd Krizelman, two twentysomethings who started a Web-based community called theglobe.com, were the rich Internet entrepreneurs of the go-go ’90s.

It all started in November 1998 when theglobe.com went public, setting a record at the time as the stock surged more than 600 percent on its first day. The company had yet to turn a profit.

STEPH PATERNOT, FORMER DOT-COM ENTREPRENEUR: The perception is you’re a trillionaire. I mean, nevermind whether I was worth $100 million or a billion, I mean, people’s perception are, you are worth an infinite amount of cash.

ROGERS: That image of wealth changed Paternot’s life, even if his fortune, roughly $100 million, was mostly tied up in stock.

PATERNOT: Charities start calling, bankers are calling, you are getting anonymous mail, you are getting love letters with photographs of cute girls. I mean, getting photographs of cute guys. It’s like — it starts coming out from everywhere.

ROGERS: Juggling his admirers and a business valued in the billions proved a challenge, one Google’s co-founders will be intimately familiar with.

PATERNOT: They can now look back at everything we did right, we did wrong, and what everyone else did right and wrong and not make a lot of those same mistakes.

ROGERS: Mistakes that included a laser-like focus on the company’s stock.

PATERNOT: It takes over your life. People are miserable when the stock is down 20 percent. They are phenomenally happy when it is up 20 percent. So your emotions are tied to the stock price. And it starts to affect business.

ROGERS: Eventually business realities got to theglobe.com and the company collapsed, taking Paternot’s job and his millions. Which brings us to his last bit of advice, focus on your own balance sheet as well as the company’s.

PATERNOT: Well, I didn’t do a very good job of managing my money otherwise I would have something left.

ROGERS: These days his most valuable commodity may be his tale of life as an overhyped Internet icon. He has already written a book and now he’s working on the screenplay. Maybe these two will want to read it.

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