Normally, investors would have little reason to mention tiny HandHeld Entertainment ( ZVUE) in the same breath as Internet powerhouse Google ( GOOG).

As it turns out, however, the two companies share some family ties -- a fact that isn't lost on HandHeld fans.

By now, the Google story is quite familiar. Two college buddies, Sergey Brin and Larry Page, established the wildly popular Internet search engine and then -- shunning big investment banks -- took the company public through an unusual auction-based initial public offering. They became instant billionaires. Moreover, they made investors everywhere rich, as Google shares rose fivefold in just two-and-a-half years on the market.

Page's older brother, Carl, had by then enjoyed some Internet-related success of his own. He founded eGroups and agreed to sell it in June 2000 to Yahoo! ( YHOO) for more than $425 million.

Then Carl Page went on to smaller things. In 2003, he became chief technology officer of HandHeld, a maker of discount downloading devices struggling to compete in a cutthroat world now dominated by Apple's ( AAPL) iPod.

Wall Street showed little interest in this particular Page-backed venture. In a strategy often adopted by desperate upstarts, HandHeld went public last year through a reverse merger with a shell company and relied on PIPE deals for capital. PIPEs, or private investments in public equity, typically force cash-strapped companies to sell their shares at a steep discount.

Force Protection ( FRPT), a maker of blast-resistant military vehicles, followed this same path. Investors in that company's PIPE have scored phenomenal returns .

The Palisades Fund -- whose swoon was noted last summer by TheStreet.com -- has fared well in both the HandHeld and Force Protection deals. But ordinary shareholders have weathered some painful losses since PIPE investors started selling their shares.

HandHeld stock, up 12 cents Tuesday to $3.01, has lost more than half of its value since the big selloff began last December. But some short-sellers, who have placed huge bets against the company's stock, see the decline continuing.

HandHeld has been trying to expand by purchasing several Web sites featuring user-generated content that can be downloaded on the company's machines. CEO Jeffrey Oscodar now believes that the company's future lies in "providing best-of-breed media content (to young adults) on the screens that matter to them most."

However, to critics, HandHeld's new Web sites -- with names like Dorks.com, FunMansion.com and PutFile.com -- look like third-rate knockoffs of winning YouTube at best. They feel that HandHeld's family ties alone make the company stand out.

"A lot of people watched Google buy YouTube" and other technology giants pursue similar ventures, says a financial blogger known as the Microcap Speculator. "So now they think about Carl Page and his connections. ... The name means a lot."

The Page name conveniently surfaced during a recent HandHeld conference call.

Last month, private investor James Patrick asked HandHeld executives if one of the company's leaders really has ties to a Google founder. Patrick had read about the link on an Internet chat board.

"That's correct," HandHeld assured. "That's Carl Page, who is Larry Page's brother. ... He's the only brother -- so he's 'the' brother."

But a touchier subject loomed. Terry Kirk, another private investor, wanted to know whether Wal-Mart ( WMT) -- which handles nearly all of HandHeld's sales -- had been doing a better job of peddling the company's wares.

Kirk was fretting because, during the crucial holiday shopping season, his local Wal-Mart had been stocking the company's video players on the bottom shelf and seemed to know nothing about them. He worried that the giant retailer had run out of the company's new audio players as well.

Indeed, HandHeld seemed to be grappling with widespread challenges.

Back in December, the company announced just in time for Christmas that both Walmart.com and Amazon.com ( AMZN) would be selling its newest offering, the $100 Zvue 250 personal media player. But shoppers apparently had a hard time even finding that bargain.

"Neither site had the product available when we checked," Warren's Consumer Electronics Daily reported during the final week of the Christmas shopping season. "Wal-Mart listed the Zvue 250 as being out of stock, while Amazon said it wouldn't be available until after Christmas."

For its part, HandHeld blamed the problem on a broken Internet link and claimed that its new media player was in fact available.

By then, however, HandHeld -- facing cheap competition from Apple and others -- had started shifting gears. The company was paying millions for Web sites that, it hopes, will generate revenue from advertisers and Zvue users alike.

"It looks sort of like what Apple has done with content," the Microcap Speculator explains. "But Apple is at the top of its field. ... So that comparison really falls apart."

Investors seemed excited by the move nonetheless. During that strategic shift, HandHeld's stock began trading heavily -- with more than 1 million shares changing hands on some days -- as PIPE investors sold to eager retail buyers. Volume has since fallen dramatically, however.

Oscodar calls the company's past trading activity "neither normal nor sustainable." He feels more comfortable with the stock's current volume, although he believes that the shares -- now in the lower half of their wide six-month range -- deserve a better price.

But the Microcap Speculator, who profited from a short bet on the stock during the big trading frenzy and has since covered his position, sees a company driven by desperation instead.

"I don't see a business here," he says simply. "It's like they brought a knife to a gunfight. They're just not equipped."

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