HandHeld Entertainment today announced it has acquired Putfile, a leading free digital media service featuring user-generated content for approximately $7.1 million ($1.08 million in cash and approximately $6.0 million in HandHeld Entertainment common stock). The acquisition vaults HandHeld into a leadership position in the online video market by significantly increasing its audience.
As a result of the Putfile acquisition, HandHeld Entertainment’s Web properties:
· Comprise one of the largest online video networks in its market;
· Include more than 425,000 free and premium video selections;
· Attracted more than 13.7 million unique visitors (on a combined basis) in January 2007;
· Generated more than 83 million page views (on a combined basis) in January 2007; and
· Will strengthen HandHeld Entertainment’s goal to achieve cash flow positive results by the end of 2007.
All traffic figures and rankings noted in this release were determined by the company by using Google™ Analytics and Alexa’s traffic ranking system (unless stated otherwise).
Under terms of the acquisition, HandHeld Entertainment paid $500,000 in cash at closing for Putfile, and approximately $580,000 payable during the next 12 months in equal monthly payments, plus 2,092,050 shares of restricted common stock, which may be sold in 1/12th increments per month during the next 12 months. HandHeld Entertainment management will discuss this acquisition in an investor conference call and Webcast slated for Wednesday, February 7 at 4:15 p.m. (EST)/1:15 p.m. (PST).
“The Putfile acquisition clearly establishes our place in the online video world,” said Jeff Oscodar, president and chief executive officer of HandHeld Entertainment. “With more than 13.7 million monthly unique visitors and 83 million page views combined last month, we have a substantial and engaged audience.
“Beyond sheer traffic, however, Putfile provides our network of Websites with tens of thousands of new videos and flash animations each week which can now be distributed throughout our network. The traffic that Putfile brings to our network will create an even larger audience for the thousands of premium commercial titles that we already have in our library.”
Putfile highlights include:
· More than 9.5 million unique visitors during January 2007;
· More than 61 million page views in January 2007;
· More than 1.4 million registered users (as of today);
· More than 80,000 creative media uploads to its Web site last week alone (pictures, videos, flash media animations, etc.);
· More than 408,000 user-generated videos available for free online viewing (as of today); and
· A ranking of 1,093 last week, making it the 1,093rd most visited Web site in the world (according to Alexa).
Acquisitions Accelerate HandHeld Entertainment’s Digital Media Strategy
In its investor conference call on November 14, 2006, HandHeld Entertainment outlined a strategy that focused the company on creating a compelling and profitable mix of free and premium content designed for use on PCs, portable devices (such as the company’s ZVUE™ personal media players and other PMPs), as well as PDAs and mobile phones supporting Windows Mobile 5.0.
Under this strategy, HandHeld Entertainment has now acquired four Web properties since November 2006, three of which it has begun expanding, including:
· Dorks (acquired November 14, 2006);
· FunMansion (acquired December 1, 2006);
· YourDailyMedia (acquired December 18, 2006); and
· Putfile (announced today).
The combined visitor totals of the aggregated HandHeld Entertainment Web properties present the company with multiple advertising and marketing synergies not previously available to the individual Web sites, synergies the company is working to leverage to the benefit of its shareholders.
“HandHeld Entertainment is the perfect vehicle to take Putfile to the next level and will be an excellent fit in HandHeld Entertainment’s growing network of Websites,” said Gordon Page, founder of Putfile. “I started Putfile to give people a convenient way to share files with each other. Putfile’s users quickly created a great community focusing on entertainment, particularly video and animations. The site’s tremendous growth illustrates the community’s passion. As part of the HandHeld network of Web sites, I’m looking forward to accelerating that growth and building on that passion.”
HandHeld Entertainment now has more than 425,000 free and premium videos available to users through its network of Web sites. These include premium music videos, anime features, television shows, movies, cartoons, independent films, documentaries, and news, entertainment and sports programs from companies ranging from Sony BMG to IMG Media and from Canadian Broadcast Corp. to Fun Little Movies, as well as free user-generated and user-submitted video selections and other forms of media. Customers can also select from millions of songs that can be played on a ZVUE through HandHeld Entertainment’s relationships with eMusic and Rhapsody.