I guess they can afford it, and its nice to extend the brand (if you're hunting for some rationalization - which we all are :)), but still - it's a bit nutsy (and they're potentially risking more than the invested cash).
Well, no matter how you slice it , its a bold move in the citizen video space - and it should be interesting to see what Google make of it, if nothing else. In particular, if they can stick to their new mantra ("features, not products") seriously with this acquisition - well, could be very interesting. All in all, I'd say: crazy deal, but probably not a bad idea for the involved parties.
Let the good times roll - :) remember this? Dot-com-2.0 craz-azee-zaniness (and some background).