News Corporation unit invests in PlanetRx
News America Digital Publishing, a subsidiary of News Corporation, announces that it has made an investment in online pharmacist PlanetRx.
Although the amount of the investment from the News Corporation unit was not disclosed, PlanetRx received a total investment of $50 million from several strategic and financial investors, including News Corporation. The other investors include Tenet Healthcare, HealthSouth, and E*Trade Group among others.
The move comes just weeks after Fox Entertainment, also a subsidiary of media giant News Corporation, said it will launch in mid-July the Health Network, a new media company that will provide health information and products for consumers, physicians, and hospitals through an integrated Internet and cable platform.
"This relationship with PlanetRx gives News Corporation an important e-commerce and advertising partnership online and complements our existing health and fitness strategy at the The Health Network, FOX and HarperCollins," said News Corporation president Peter Chernin. "[The investment] in PlanetRx by [News America] extends and solidifies News Corporation's online health strategy."
When Fox announced the launch of its health network, executives said they were planning on forming a partnership with a leading online pharmacist and looking at possibilities of taking the Health Network public.
The competitive field of online pharmacies is already crowded by the likes of Amazon.com-funded Drugstore.com and Soma.com. Brick and mortar pharmacist CVS recently acquired Soma for $30 million.
"This investment represents [News America's] expanding commitment not only to the health sector, but also to the direct marketing and commerce category, in general," said James Murdoch, president of News America Digital Publishing.
The online consumer healthcare market is expected to grow to $1.7 billion by 2003, according to research released last month by Jupiter Communications. Jupiter estimates that the total online/offline market for consumer health goods is expected to be $205.2 billion by 2003.
Although online purchases represent but a small segment of the market, analysts have previously noted that the absolute dollar amount is much higher than that spent online on other consumer goods such as books.
Fox's Health Network will compete mainly against Healtheon and WebMD, who last month agreed to merge to form Healtheon WebMD.
Other competitors in the online health space include IntelliHealth, OnHealth, Mediconsult, and Adam.com, among several others.