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Drkoop hopes buy will get sales in shape

The Internet health site acquires wellness benefit provider in a stock deal that executives say will help boost Drkoop's revenue.

Internet health site said Wednesday it acquired, a U.S. provider of wellness benefit programs for large employer groups.

Although the full terms were not disclosed, a statement released by Business Wire said the deal involved a stock transaction of the common shares of Santa Monica, Calif.-based Drkoop.

Drkoop executives say the acquisition will help boost revenue of the embattled dot-com, whose share price hovered at 19 cents in midday trading Wednesday. The price is down 24 percent since the beginning of March, 98 percent from its 52-week high of $10.93, and 99.6 percent from its all-time peak of $45.75 on July 6, 1999.

Although the site has more than 2 million registered members and is the largest Internet-based health and wellness network, Drkoop is flailing as investors shun e-commerce stocks. The money-losing site said March 1 that it would challenge an earlier ruling to have its shares delisted from the Nasdaq Stock Market.

The company, co-founded by former U.S. Surgeon General C. Everett Koop, has been trading below $1 since the fall. The Nasdaq requires members to sustain a share price of $1 as the minimum bid price required for listing. A hearing is scheduled March 30, and the stock delisting has been postponed.

When it announced its delisting challenge, Drkoop also said co-founder Donald Hackett resigned as a director. Hackett was replaced as chief executive in August by current CEO Richard Rosenblatt. Drkoop has also closed its former headquarters in Austin, Texas, and has renegotiated contracts to reduce costs.

StayFitUSA executives will Trading on thin icecontinue to be the primary marketers of their program. It provides eligible employees with low-cost health and fitness center memberships, online behavior modification instruction, chat rooms, and health tips that are aimed at assisting major employers to promote preventive behavior and improve employee health and wellness.

New sources of revenue from the StayFitUSA acquisition include the sale of health and fitness center memberships and billing services for fitness centers.

"When it comes to health, prevention is a key goal for employers and employees alike," Greg Taylor, COO of Drkoop, said in a statement. "For the first time, employers now have the ability to track the cost-effectiveness and efficiency of health- and wellness-oriented employees vs. nonparticipating employees and compare medical expenses to establish and prove a realistic" return on investment.