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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I am reasonably familiar with ZVUE and the actual handheld electronics that they make and/or market, but I didn't know that they went around buying websites too.
I believe they are (or were) attempting to build up a network of sites that would allow the people that buy their media players, to access videos and download from their network of sites. Unfortunately they don't seem to being doing too well focusing on two different projects…
Man…when you break this down this should have been a major win for them. I have never seen their numbers but there has to be something they are missing. eBaumsWorld could generate some major income in the right hands.
Good article Zac….I know it doesn't matter but I liked it.
It matters, I appreciate when my readers reflect and comment on my posts. I also wonder how HHE couldn't get these numbers and figures to work for them. I believe they were paying very high premiums over what these domains were actually work. Dorks.com went for $1.5 million and was pretty much a non-revenue generating web site at the time of the purchase!
I can only say that the new company has lost it and they have not done their job well. Company like Ebaumworld is sure get worse when the get in hand of new management. 🙁
Thats a big drop
they lost the oppurtunity.
Great analysis. I wonder if they have a chance to pull out of it. Probably not.
Looking on the other side, do you see any companies of this type that are doing things right and moving forward?
That's a lot of cash being thrown around! Just give me a fraction of that and I think that I could do better
Not exactly poetry in motion.
Thats rough, it'll be hard to comeback from that.
I was thinking today how hand-heald devices, due to there small size, are going to continue to make email and IM important. Email is never going to be old school!