The Rise and Fall of HandHeld Entertainment

Several months ago I reported on eBaumsWorld.com being acquired for several millions of dollars. A month after that post, I made another one about how the company that was purchasing eBaumsWorld.com, saw a huge increase in their ComScore figures. The company that acquired eBaumsWorld.com and multiple other high traffic entertainment sites is HandHeld Entertainment and their stock symbol is ZVUE. Why is this relevant to affiliate marketing? It’s completely relevant, because all of the acquired web sites made their money from Affiliate Programs and CPM based advertising. Let’s take a look at the RISE and FALL of ZVUE.

The two year high for ZVUE, was back when they first announced they were acquiring Dorks.com for a million dollars. ZVUE went on to acquire several other sites such as FunMansion.com, YourDailyMedia.com and PutFile.com. In my previous post I did a break down of how much each site was acquired for, but based off their earnings and traffic levels, I would say ZVUE overpaid on all of them. Unfortunately for many of the site owners, their deal included a large portion of STOCK, instead of complete cash deals. Now their million dollar deals have dwindled in size to multi-hundred thousand dollar deals. (Yet another deciding factor to think about when deciding if you should Sell or Not to Sell.)

Before YouTube & 2.0 Sites, EBaumWorld.com was King.

Today ZVUE stock is at a miserable .39 per share and down 71.59% on the year. To make matters worse, ZVUE was issued a Delisting Warning Letter from NASDAQ today. I can’t imagine there is much hope for this company should they get pushed down to the pink sheets. It’s amazing how badly their numbers and stock price has dropped since the acquisition of eBaumsWorld.com, which is still a powerhouse in the entertainment area. With the stock price now as low as it is, an acquisition from another company could make sense, even just for the amount of volume of traffic it’s network of sites produce.

What do you think of ZVUE’s performance with it’s network of web sites and have you ever attempted to make money in the video/entertainment niche area?

(Disclaimer: I do not recommend buying or selling this stock. This is simply a write up based on a company that deals with web sites and affiliate marketing. This post is in no way intended for action on your part based on making money or stock trading. You are responsible for any actions you take, whether it is affiliate marketing or through the stock market.)

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Google Paid Search on the Decline

If you follow the stock market at all, you are probably aware that Google’s stock has been on quite a decline lately. From it’s high of $747.24 a share in November to only $444.08 this week, there is reason for concern. Google’s February search traffic fell 4.6% below the January level and paid clicks fell 3% that same period. The latest comScore numbers are indicating that paid clicks are on track to be down more than 12% for the quarter.

While these numbers are extremely important for stock analysts and Google stock owners, a better question is “How is this affecting Adwords and Adsense users?“. We are part of the industry that spends and earns big off Google. Is the recession of the market and economy effecting your ppc campaigns or Google Adsense earnings? With the loss of ppc advertisers on Google, will it make it easier on the survivors of search and the ones who can flourish with continual paid search listings?

The recent news of Google’s continued loss in search traffic pushed the stock down another 3% for Wednesday’s pricing. The chart to the right shows the lifespan of Google’s stock since going live in late 2005, and peaking in November 2007. With the stock already down nearly a third this year, how much lower will Google stock tank?

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Microsoft to Buy Yahoo for $45 Billion

In earth shaking news this morning “Software giant makes cash and stock offer of $31 a share, a 62% premium from Yahoo’s closing price on Thursday.“, reports CNNMoney.com. Microsoft made an offer for nearly $45 BILLION cash and stock to acquire Yahoo. The deal would pays Yahoo a premium of 62% per share, bringing the price to $31 a share. Steve Ballmer, Microsoft’s chief executive, called the move the “next major milestone” for the software giant.

In the war against Google, I always thought this was the best move… and have been waiting forever for it to happen. With Yahoo’s stock and earnings numbers struggling so much, now was the time for Microsoft to make the move. How you think this will effect affiliate marketing or search engine promotions of offers? Will the team up of Microsoft and Yahoo be enough to hurt Google in the search engine wars?

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ComScore Ranks HandHeld Entertainment #1

I last talked about HandHeld Entertainment when they announced that they were acquiring eBaumsWorld.com for $17.5 million. I also went into great detail on all the other site acquisitions they had over the past year and how their plummeting stock was a disaster!

In addition to keeping an eye on this stock and knowing pretty much all of the sites they have scooped up, I’ve also been holding stock in this company for a long time now. I first purchased right after they picked up Dorks.com back in November 2006… and have been buying on the dips, all the way down to $1.50! (52wk Range: 1.00 - 7.78)

Today I was looking over my portfolio and saw my numbers were up pretty high. I noticed ZVUE (HandHeld Entertainment’s Stock Symbol) was up over +50%! For the first time, comScore is now measuring all of HandHeld’s Web sites as a single entity. This is a big change over and mainly because of HandHeld’s formal launch of ZVUE Networks, its online video advertising network. With the new ranking in place, HHE was ranked #1, at the top of the ‘Top 10 Gaining Properties by Percentage Change in Unique Visitors” for August 2007. HandHeld had the largest increase in unique visitors (U.S.) by 327% month-over-month from July 2007 to August 2007.

In addition to the big spike on news today, ZVUE also made news saying they will buy back over a million shares of their own stock over the next 6 months. With all the news on this stock and a company buyback in place, is it now time to buy into ZVUE? Time will tell, and I’m sure they will have more business acquisitions on the way.

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Buying on the Cheap

We are down another -300 points today in the market… quick… "SELL! SELL! SELL!"… (as Jim Cramer would say). That’s the reaction of a good majority of people in the stock market right now. As for Cramer and myself… we’ve been more of a "BUY! BUY! BUY!". As you may know, I’m a member of Jim Cramer’s Action Alerts, which tells me every time Jim is about to Buy or Sell a stock for his charitable fund. Over the past week, Jim has been doing a lot of buying. Today I picked up a decent amount of shares as well, from a variety of companies. Don’t get me wrong, this market plain sucks… but it’s likely to come back.

In my last post on Jim Cramer’s Action Alerts and my portfolio of his recommended stocks, I talked about how my portfolio was up nearly $5,000 (8.55%)! This was pretty good and I was extremely happy with the performance. Since I have started posting on my JCAA performance, I have been getting allot of emails asking for updates. Unfortunately I didn’t post again recently before the recent crash, as it was up a bit higher.

From the chart above, you can see it pretty much took a complete spin. After being up 8%, now its down 8%. It may seem bad, but it really isn’t when you compare it to what else is really going on. My other personal trading accounts are getting hurt a lot more than my Cramer portfolio. Many hedge funds are also down 40-60% right now. This market is just killing everything right now and I will continue to buy as Jim Cramer does. He was here through the last several bull markets, and will guide us through this one as well.

If you take a look at just some of the stocks in our internet marketing area, you will see them at nearly half they price they were a few months ago. ValueClick, Google and Yahoo have all been hit hard as of lately. Below are their stock charts for the past three months.

VCLK - ValueClick   :   52wk Range: $16.03 - $36.70

GOOG - Google   :   52wk Range: $372.26 - $558.58

YHOO - Yahoo   :   52wk Range: $22.44 - $33.61

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