CNET también está disponible en español.

Ir a español

Don't show this again


Media mergers a hazard to solo health sites

As online health information sites rush to form alliances with television broadcasters, some unaffiliated sites are likely to see their own health decline, analysts say.

    As online health information sites rush to form alliances with television broadcasters, some unaffiliated sites are likely to see their own health decline, analysts say.

    In the latest high-profile deal, CBS acquired a 35 percent stake in Medscape this week in exchange for $150 million in advertising on its television and radio assets over seven years.

    In the past few months, other broadcasters and cable players also have entered the field, including Fox Entertainment's Health Network, which will launch this month, and the Discovery Channel's Discovery Health Web site, which will be complemented with an eponymous cable programming station.

    In February, WebMD, which recently moved to merge with Healtheon, formed an alliance with CNN, a unit of Time Warner, in which the health information site will exchange online content for on-air promotion. CNN also took a stake in WebMD.

    Although television exposure provides identical advantages for online health sites and news, financial services, and portal sites, health sites have the least brand recognition and require offline consumer awareness to really fly, analysts agree. Otherwise, they warned, they may not survive the competitive atmosphere.

    There are no medical or health information sites on Media Metrix's list of the top 50 sites as of May.

    The main advantage for sites affiliated with broadcasters is increased traffic, which leads to greater advertising revenue for the sites as well as stronger brand awareness.

    Television network NBC's cross-promotion deal with women's site iVillage helped in part to push the site to the No. 34 spot among Media Metrix's list in May. CBS's advertising for CBS SportsLine in part also helped push the site to No. 45 in May.

    "Up to now, and even today, when you compare [online health sites] to leading news sites and affinity portals and sports and business sites, the traffic to health sites is pretty paltry," said David Restrepo, a health care analyst at research firm Jupiter Communications. "Ultimately, they want to drive traffic to their sites, and our research has shown that cross-media promotion is powerful."

    The portal play
    The other type of deal being cut is between health information sites and portals such as America Online and retail giant, the health Web site cofounded by former U.S. Surgeon General C. Everett Koop, said Tuesday that it will pay AOL $89 million to be the provider of health information services on AOL's sites.

    Even though these deals are not as effective as television, given TV's mass consumer reach, most analysts are at least respectful of AOL's reach, singling out its 17 million subscriber households.

    "AOL has made a lot of companies in the past--giving them just the boost they needed to be a strong brand," said John Robb, president of research firm Gomez Advisors.

    Still, most analysts said that unless a company is getting airtime or print exposure in exchange for equity, money is better spent offline to build brand awareness--because offline advertising still reaches a far greater number of viewers and readers.

    Analysts agreed that Drkoop is likely to seek an arrangement similar to Medscape's to get television exposure. Drkoop provides content to the health section of Disney's Go Network as well as its site. However, ABC News does not promote Drkoop on the air and instead focuses on promoting Go Network, a Go Network spokeswoman said.

    Meanwhile, sites that target other health care providers and services prove an exception to the rule that offline exposure is necessary. Analysts are quick to note that such health information sites don't require a cross-media alliance.

    "The real opportunity for some companies is the business-to-business space," said Jim Kumpel, vice president of health care research at equities firm Raymond James. Kumpel pegs the total health care market at more than $1 trillion in annual spending. Most of that expenditure is on services, ranging from medical care to billing, record-keeping, and management.

    "But having multimedia outlets to cross-promote is vital if your company has the advertising-driven model," Kumpel added. "[The cross-promotional] relationship gives you the exposure to reach a whole lot of consumers that may never be aware of you otherwise."

    Other analysts agreed that health information and services companies that don't get snapped up by the remaining unaffiliated networks would do best to create a niche segment.

    "We have found that the narrower your niche, the tighter your focus, the easier it is to compete," Robb said., which provides health care information to help businesses and consumers decide on medical services and products, is an example of a company that appeals to a niche audience.

    The company provides services that allow users to compare the financial costs and clinical outcomes of physician services, as well as to analyze the supply of and demand for health care services.

    Part of a greater trend?
    The trend in television broadcasters forming alliances with health care information and services sites is part of a larger landscape shift taking place in the way television networks plan to generate revenues, analysts said.

    "Media is moving from an advertisement model to a transaction-based model," Robb said, noting that an increasing number of media companies, including Web portals Yahoo and AOL, are moving to provide e-commerce transactions as well.

    The online consumer health care market is a lucrative target and is expected to grow to $1.7 billion by 2003, according to research released in May by Jupiter. The firm predicts that the total online/offline market for consumer health goods such as pharmaceuticals and beauty products will reach $205.2 billion by 2003.

    And although online purchases represent a small segment of the market now, the actual dollar amount is much higher than that spent online on other consumer goods such as books.