Gawker: valleywag, webmd

Steve Case's face-saving merger

Owen Thomas — Fri, 03 Oct 2008 01:00:00 EDT

The health-website bubble, inflated by purchased search-engine traffic, is deflating. As rumored for weeks, Waterfront Media, an operator of health websites, is buying Revolution Health in a $300 million deal. Waterfront's network reaches 14.7 million visitors a month; Revolution, 11.3 million. WebMD, the largest operator of health websites has 17.3 million. Yet the combination won't displace WebMD, one industry insider says: "This really is 2 + 2 = 3." Where the deal does add up: Case, as a Waterfront board member, will be free to take credit for whatever success Waterfront realizes.

WebMD bulks up as Revolution Health talks sale

Owen Thomas — Mon, 15 Sep 2008 20:00:00 EDT

Revolution Health, the brainchild of AOL founder Steve Case, is still in talks to sell its health portal to a rival, Everyday Health. The combination would have bested WebMD, the No. 1 health-site operator — until WebMD bought QualityHealth.com today. The Revolution-Everyday deal, meanwhile, could happen within a week — but is currently stuck on financing. Arranging the money to consummate the sale is proving difficult, with Wall Street more concerned with its own survival than the health of Case's startup venture. One way or another, it seems all but certain that Case's Revolution Healthwill end up sold, without much transformation to show for his troubles.

Case's quest to transform the healthcare industry has tragically earnest roots; he started the effort after his brother, Dan, died of brain cancer. Hospital bureaucracy always frustrates the patient's kin — but suffering does not always lead to wisdom. Dan, a tech investment banker, might have cautioned Case against this plan.

Revolution Health has ended up as a mere information middleman, buying ads on Google and then selling the users who click on them to other advertisers. That's why it inevitably needs to sell; online advertising is a game of volume. With Google eager to bulk up its own health efforts, it's not clear how much longer there will be room for third parties to play. And arbitrage is hardly a revolutionary exercise.

Someone needs to fix the healthcare system. Case's story is suitably tragic; his motivation, noble. But he's not the man for the job.

Steve Case's troubled Revolution Health talks merger with rival

Owen Thomas — Wed, 10 Sep 2008 12:20:00 EDT

At last, an end is in sight for Steve Case's misadventure in the healthcare industry. Revolution Health, his health-information website, is in merger talks with Everyday Health, a better-run, New York-based rival with more Web traffic. The combination would have more traffic than WebMD. Three's a trend, isn't it? If the deal goes through, this will be the third time Case has dumped a company he mismanaged on someone else's shareholders.

The first, most famously, was AOL, which he offloaded on Time Warner's shareholders. The second, less well known, was Flexcar, a car-sharing startup which he ended up combining with Zipcar. Dumping Revolution Health would just be the latest face-saving exit for Case.

That the rationale for the deal with Everyday Health is consolidating Web traffic speaks to Case's diminished ambitions. Instead of transforming healthcare, as he loudly said he hoped to do, Case has ended up optimizing websites for search engines. Case's holding company would retain some other health-related startups after the proposed deal, including clinic chain Redi-Clinic and insurance broker Extend Health. None show transformative promise, but unlike Revolution Health, they at least sound like sensible businesses.

Is Steve Case on drugs? No, but that's the problem

Owen Thomas — Thu, 05 Jun 2008 18:00:00 EDT

Former AOL CEO Steve Case founded Revolution Health on some muddle-headed notion of using the Internet to transform healthcare. That dream has died, and what's left — an online-advertising network serving health-information websites — may not have much of a future, says WebMD veteran Josh Wildstein. Drugmakers' spending online actually dropped from 2006 to 2007. Healthcare sites have the same me-too content, licensed from a few prestigious sources like the Mayo Clinic, and they charge high rates for ads. But their ads don't deliver the only results that matter — increased prescriptions for name-brand pharmaceuticals. The sites also frustrate consumers, who end up trolling through pages of Google search results, finding answers on niche sites which are difficult for advertisers to reach. The end result: Pharmaceutical marketers buy cheap, untargeted ad impressions to drum up large numbers of customers instead of spending money on health sites. And we wonder why there are so many Viagra ads online.

WebMD asks: Is it me, Doc, or are everyone's ad sales looking a bit pasty?

Nicholas Carlson — Wed, 23 Apr 2008 17:20:00 EDT

WebMD, an operator of health websites, cut the forecast it offered investors for 2008 sales to reflect a "a recent shift toward shorter term buying commitments in certain of its customers' consumer advertising purchases." What we want to know: Is this an ailment plaguing just WebMD, or something catching? A Madison Avenue source gives us her diagnosis.

It may be a WebMD problem. Sure, the industry is bracing [for a recession]. But our clients in particular are increasing their spend. We're not seeing that kind of worry. WebMD tends to strong arm people in very large deals that can't be canceled. That's not the way online works. Also, WebMD tends to circumvent the agencies and go straight to the client.

In other words, WebMD is just getting its comeuppance — and using economic fears as an excuse.

Goldman Sachs is now 10 percent less impressed with Internet

Nicholas Carlson — Thu, 20 Mar 2008 12:20:26 EDT

Citing a more challenging consumer environment, greater customer-acquisition costs and investor reluctance to pay above-market prices for shares, Goldman Sachs today cut price targets for Internet stocks including Google, eBay, and Amazon by 10 percent. For more reasons why Wall Street is suddenly less impressed with your tech stock portfolio, see Goldman's entire report, embedded here:

First Healtheon merged with WebMD. Then it...

Nicholas Carlson — Fri, 22 Feb 2008 13:30:40 EST

First Healtheon merged with WebMD. Then it spun off part of WebMD and changed its name to Emdeon. Then it changes its name to HLTH Corp. Now it's merging with WebMD in a cash-and-stock deal worth $2.31 billion. Got all that? The accounting for this must be almost as complicated as your average health-insurance explanation of benefits statement. [Wall Street Journal]

HealthCentral takes cash from Barry Diller, Michael Moritz

Nicholas Carlson — Fri, 25 Jan 2008 16:20:36 EST

HealthCentral just announced $50 million in funding. The round included a major investment from IAC and smaller contributions from prior investors Sequoia Capital, Carlyle Group and Polaris Venture Partners. HealthCentral operates several health-related websites, including the long-troubled DrKoop.com, which was once a publicly traded company a bubble or two ago. Here's how their traffic looked last year, according to Compete. It's nice and all, but stick around for the one comparing HealthCentral to WebMD. If I used the word pwnage, I would. But I don't.

Here's HealthCentral.com and its other sites.
And now, versus WebMD.
Looks pretty bad for HealthCentral, but it's early yet. The site only changed its name to HealthCentral in 2006.