eBaum’s World, a viral video site that has been for sale for a while now, is being bought by HandHeld Entertainment for $15 million in cash and $5 million in common stock.
Shares of HandHeld Entertainment, which makes compact digital media players for delivering movies, music and photos, didn’t exactly spiked with the news, closing down $0.04 to $1.78 on just slightly-above-average volume on the news. This might have a lot to do with the company’s aggressive acquisition binge which has added over seven websites – including PutFile.com, Dorks.com and YourDailyMedia.com – to its core media player business.
The strategy - acquiring commercial content to drive media player sales - is solid for a big-bucks player (say Microsoft) but to me seems dated and dangerous for a small cap company like HandHeld. But Eric Bauman and his dad Neil Bauman, who started eBaum’s in 1998, have to be feeling pretty good.
