Three years after internet community site TheGlobe.com set the record for the biggest first-day gain of any IPO, it has closed down half its business and said it is looking to sell the other half.

On Friday the company announced it was closing its community sites to concentrate on developing its games business, and was looking for a partner or a buyer for that operation.

It laid off 60 people (49 per cent) of its staff, as it blamed the continuing weakness in internet advertising for its woes.

Chief executive Chuck Peck said the company took the action to save money while it sought "synergistic business combination or asset sale opportunities for our games properties."

TheGlobe.com's share price had soared 606 per cent on its first day, going from the offer price of $9 to close at $67.

It had in fact traded as high as $93. On that day, the company that had annual revenues of less than $3m was valued by the market at nearly $850m.

The share price has gone only one way since then, and on Friday it was trading at 14 cents.

The shares traded on the OTC market in the US as TheGlobe.com was delisted from the Nasdaq in April. The company's market valuation now is less than $5m.

In its latest quarterly statement, it had a loss of $6.6m on revenues of $4.7m.

TheGlobe.com's Nasdaq record lasted 13 months until the IPO of VA Linux, which rose 697.5 per cent from $30 to $239.25 in December 1999.