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The doctor is out

Interactive publisher IVI lost nearly half is stock valuation after AT&T nixed its Healthsite Friday.

Small interactive publisher IVI Publishing lost nearly half its stock market valuation today after partner AT&T walked away from its AT&T HealthSite Friday.

"The decision was totally surprising," said Joy Solomon, who had taken over as IVI's president and CEO two days before AT&T pulled out of the venture. "We had as recently as July 31 been given reassurances that AT&T was very much continuing to pursue HealthSite."

As IVI scrambles for a new marketing partner, its stock closed at 1-5/8 today, dropping 1-3/4 points on heavy volume of 2.7 million shares today.

AT&T's withdrawal affected two other partners, too. The former Web site now has pointers to content from those publishers, as well as to two others who stranded by AT&T: Rodale Press' Prevention and Men's Health magazines and MediLife, which offered diabetes information on the site.

The health site had gone into beta testing last month, signing up 13,000 subscribers in three weeks and was due to launch this fall.

IVI's search for a new partner may start with Walt Disney and Starwave, two of the half-dozen firms to approach IVI after it signed an exclusive deal with AT&T in October.

IVI, which started as a CD-ROM publisher but has been moving to the Net for nearly a year, offers online, CD-ROM, and television health content from two prestigious partners, the Mayo Clinic and the New England Journal of Medicine, which published HealthNews. Mayo sites included Mayo Health Oasis and Mayo Nurse Connection.

Last week AT&T decided to put its online resources into sites covering local communities, seeking to reinforce its strategic aim to offer local telephone service. It is testing AT&T Hometown Network in Sacramento, California, and expects to pick an East Coast community for a second test next month.

"Hometown Network is a local community play and an important potential piece of the bundle of services AT&T can offer to consumer and business customers," said Carolyn Vanderlip, president of AT&T Personal Online Network. Ma Bell thinks adding local information can round out its current menu of offerings, which include cellular service, direct broadcast satellite service, long distance and others.

AT&T's withdrawal is not good news for IVI, which lost $14.2 million in 1995 and $31.2 million the year, as it repositions itself beyond CD-ROMs. Solomon, who formerly headed marketing for IBI, succeeded founder Ron Buck, former chairman and CEO, as the board sought a more operations-oriented manager.

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