eBaum’s world (http://www.ebaumsworld.com/) was launched in 1998 and has become one of the most successful user-generated content sites in the world. The website generated about $5.2 million in revenues in 2006 and $1.6 million in net income before taxes. In the last 12 months eBaum’s world has served more than 2.6 billion unique page views and video streams averaging 10 minutes on the site. eBaumsworld has relations with companies such as Facebook, Fox, AOL, and others. The name eBaum derived from the owners name Eric Bauman.

The website is being acquired by HandHeld Entertainment for $15 million in cash up front, $2.5 million in Hand Held stock, and up to $52.5 million in stock and cash in the next 3 years. President and CEO Jeff Oscodar of HandHeld Entertainment said,

“Acquiring eBaum’s World demonstrates tremendous progress toward our stated goals of becoming a global leader in digital entertainment, as well as increasing our revenues and helping us become cash flow positive”

How it All Started
You may not call Eric Bauman a very nice kid when he was young but you could probably see the entrepreneurship forming. As a youngster in Rochester he would carry a python around his neck and charge people 75 cents to pet the snake. He then became a hardcore gamer and bought every system he could. Once doing that he invited everyone from his neighborhood to play, but would charge the m 25 cents a round. In high school he carried a universal remote stealthily turning off TV sets or turning up the volume. He even caused an evacuation once by throwing stink bombs into classrooms. But what people remember the most is that him and his friends would terrorize a teacher named Mrs. Barnes because she was ‘too nice’ recalls Jason Martorana who was Bauman’s former classmate and now chief operating officer of eBaum’s World. They would terrorize Mrs. Barnes until she would breakdown into screaming fits.

Then in a move this would launch Eric Bauman’s career. Bauman had secretly taped one of Mrs. Barnes breakdown fits and then posted them on the internet

eBaum’s World
Bauman had a taste for comedy and he knew that the world wide web was the place to see and gather more funny stuff. When he was a senior in high school he launched his webpage eBaumsworld where he put Mrs. Barnes tape, as well as other plain and bizarre media he collected over the years. Bauman promoted his website as much as he could by spamming newsgroups and asking for outrageous content. He had snuck into Monroe Community College computer labs and set all the default internet homepage to his website. Once striking a deal with eBay, Bauman posted a note telling visitors that they could bid on his sports car. The problem was there was no car and it was only a scheme to get people to click over to eBay, which would mean that eBay would pay Eric more money.

Eric Bauman’s dad Neil had always pushed Eric to earn money with a ‘real world job’ but that would all change. One day Eric flashed a $3,700 check in front of his dad explaining that was one weeks work. Eric’s dad Neil responded by saying “Holy fucking shit!” and Neil had recalled his son saying “I told you.”

Financial Terms
The financial details are a little more complex than stated above. Here is a better explanation on what is going to happen. $15 million in cash when the deal is closed, and $2.5 million in HandHeld stock at the closing of the deal. An addition $2.5 million in stock if targets are met, and possible earn outs of another $15 million in cash and $17.5 million in stock over 3 years if certain milestones occur.

What Happens Next?
Well nothing really. eBaum’s World will be the same web site based on user-generated content like it always has been. The only difference is that it’s under different leadership now.

Tags: Eric, Eric Bauman, eBaums World, HandHeld Entertainment, Internet, Entrepreneur, Business, Web 2.0

If you liked this post please consider adding us to your RSS Feed