CBS invests in online pharmacy

The media company agrees to buy a 20 percent stake in Rx.com in exchange for $37.5 million worth of advertising and promotion on CBS's properties over four years.

NEW YORK--CBS, parent of the namesake television network, agreed to buy a 20 percent stake in online pharmacy Rx.com in exchange for $37.5 million worth of advertising and promotion on CBS's properties over four years.

CBS's majority-owned Infinity Broadcasting, the second-largest U.S. radio company and soon to be the No. 1 U.S. billboard company, will get part of the investment. CBS will also get warrants to buy 700,000 more shares of closely held Rx.com as well as a seat on Rx.com's board.

CBS has made other Internet deals that use ad time as currency, including investments in Switchboard, an online directory service, and ThirdAge Media, a company with content tailored to an older-adult audience.

CBS's nucleus of older viewers provides an instant audience for Rx.com's ads, which the pharmacy hopes will raise its profile and boost revenue. CBS said the move complements its agreement two weeks ago to buy a 35 percent stake in Medscape, the No. 1 Web site aimed at doctors.

Austin, Texas-based Rx.com began offering nonprescription drugs earlier this year and plans to offer prescription drugs in the fall. The investment follows other companies' purchases of part or all of online drugstores: Amazon.com holds part of Drugstore.com, and CVS bought Soma.com.

News.com's Jennifer Balderama contributed to this report.

Copyright 1999, Bloomberg L.P. All Rights Reserved.

Featured Video