Build a cheap LED clock?

A friend of mine wanted to know if/how a cheap LED clock like this could be built:

I paid $15 for one of those LED badges, so that size would be OK (.5 x 2 inches or so). Yet when I go look for LED controlelrs, board, and sheilds, it gets crazy expensive to get enough parts to build one. I guess that means I'm going in the wrong direction. Thoughts, ideas, or advice please?

Hour and minutes are fine, so 4 digits would be fine for what I'm interested in building.

Looks like eight 5x7 displays with an extra row above and below (9 rows) and extra columns between and at both ends (9 extra + 8 times 5 = 49 columns). A 9x49 display has 931 LEDs. You can probably get a price break by ordering 1000 but it looks like DigiKey prices start at $82.11 per thousand.

You can get a 4-digit 7-segment clock display for $3.25.

What is considered "cheap"?

$15 is a steal for the clock.

A homebrew clock will run you over $15, for sure.

However, it is much fun to build your own.

Yeah I was hoping for $15 to $20 including everything. I guess that’s out though. $15 - $20 but bring your own Arduino would be OK I think. I would just need help to figure out how to use these LED matrix’s from eBay:
$1 each incl shipping
http://www.ebay.com/itm/8x8-Dot-Matrix-3mm-dia-Red-LED-Display-Common-Anode-/281042418442?pt=LH_DefaultDomain_0&hash=item416f6efb0a

I understand that most times you get what you pay for, but are these worth even playing around with? I don’t know anything about LED matrix’s besides they look cool, and “common anode” is not what adafruit has for sale here:
$4 each, plus shipping

I get 9x49 = 441
Blue LEDs here <5 cents each, so 445 (couple of spares) are $21.85
http://www.dipmicro.com/store/LED3B
other colors less
standalone '328 & 9 resistors to drive anodes,
7 TPIC6B585 from avnet.com to 87 cents each
Be easy to pull it all together for <$40 I think.