News Corporation has announced a $US1 billion investment in Healtheon/WebMD and the formation of a new international venture that makes the global media company a player in the growing online health care market.
The deal calls for News Corp to pay $100 million for a 10.8 per cent ownership stake in Healtheon/WebMD and provide $700 million in advertising and promotion to the Internet medical company. Healtheon/WebMD also receives 50 per cent ownership of The Health Network, a Fox cable television network, and complete control of its Web site, Thehealthnetwork.com. News also will pay Healtheon/WebMD $62.5 million for a five-year license to syndicate the company's health information content.
News Corp chairman Rupert Murdoch called the investment "an ideal partnership to help us achieve our goal of establishing a multimedia, multi-revenue-generating business in the trillion-dollar health care industry."
The deal follows similar, if far less costly, agreements between other media giants and Internet health care companies. In July, CBS took a 35 per cent stake in Medscape, an online medical company targeting physicians and consumers, in exchange for $157 million in advertising and branding services. The creation of Fox's The Health Network in May was the result of a merger with AHN.com, an online health care information company. Before its merger with Healtheon this year, WebMD cut one of the first media deals when it signed a multimillion-dollar agreement with CNN.
The goal of these partnerships is to drive television viewers to medical Web sites and vice versa, creating single health care information brands across all media.
The News Corp deal attempts to extend that supposed synergy globally through its operations in Europe, Australia and Asia. The partnership could give Healtheon/WebMD an advantage in internationalizing online health care. But translating health care information for other cultures steeped in different traditions could prove more difficult than, say, selling books and CDs overseas.