SAN FRANCISCO (08/30/2000) - Drkoop.com Inc.'s new management got down to business Wednesday, firing a third of the struggling Internet health company's staff.
"We said from the beginning that we were going to run this company like a real business," said newly installed Drkoop president Ed Cespedes in a prepared statement. "We are ready to put the past behind us and move forward with our plans to rebuild this company and maximize shareholder value."
Drkoop's previous management had reduced its workforce by 40 percent in the spring as the company began to run out of cash. Before Wednesday's layoffs, Drkoop employed about 130 people.
Bankruptcy looked imminent on Aug. 22 when a group of investors led by former ExciteAtHome executive Richard Rosenblatt took control of Drkoop and agreed to inject as much as $27.5 million into the Austin, Tex.-based company. The new management team comes from Prime Ventures, a Santa Monica, Calif.-based venture capital firm and incubator that Rosenblatt established after leaving ExciteAtHome in March. Former Surgeon General C. Everett Koop, the company's co-founder and namesake, remains as chairman. Founding CEO Donald Hackett also remains on the board.
"Drkoop has a very strong brand, very deep content and 1.4 million registered users. Not only is it strong, it's going to be revived," said Rosenblatt, the new CEO and the founder of iMall, in an interview Tuesday.
Rosenblatt and Cespedes said they plan to lessen Drkoop's dependence on advertising by offering services to hospitals and physicians through its partnership with Shared Medical Systems (SMS) , a Malvern, Pa., company that provides electronic transaction services for the medical industry.
In another sign that the new management intends to run Drkoop as a "real company," it has added to the board of directors a former chairman of the Travelers Bank Group, a former senior managing partner at Bear, Stearns and a former general counsel at Amgen. The old Drkoop board was dominated by company insiders and directors who had received significant stock options from management.