A Brand Called Stanford

SAN FRANCISCO (05/10/2000) - For decades, Stanford University has served as an intellectual incubator to students and faculty who have gone on to found such Silicon Valley icons as Hewlett-Packard Co., Silicon Graphics Inc. and Yahoo Inc.

Now Stanford has hatched a startup of its own. Yesterday, the university launched its first for-profit venture, an Internet medical company called e-Skolar. The startup will market an online information service for physicians called Stanford Skolar, M.D. "If the next Cisco was formed, Stanford would want to own a piece of it," says e-Skolar CEO Paul Lippe, a tech company veteran and former Democratic Party operative. The university's medical school, with help from the engineering department, created what has become Stanford Skolar, M.D., in 1998 for use by the Stanford community.

Medical school senior associate dean Phyllis Gardner subsequently got wind of a plan to spin the software program into an off-campus startup run by an adjunct professor and private investors. "I pulled the plug on that one," says Gardner, a physician who serves as e-Skolar's chairman. "We've gotten some income from our associations [with Stanford-inspired companies] but it's minimal to the value created." Determined to profit from its intellectual property, Stanford formed e-Skolar, taking a majority ownership stake. Employees and private investors own the remainder.

"This is a product that needs to scale up and needs commercialization. You don't do that in the academic world," says Gardner, who has worked as a pharmaceutical company executive. "I thought it would be most compelling if it had the Stanford brand." To avoid conflict of interest, Gardner won't receive stock in e-Skolar. Stanford employees won't work for the company, though they can consult for e-Skolar and receive equity. Company officials describe Stanford Skolar, M.D., as an integrated search program that taps medical databases, textbooks, journals and other sources to quickly give doctors relevant answers to their questions. The system also creates a log of research that physicians can use to meet continuing education requirements mandated by state licensing boards and medical societies. E-Skolar faces a multitude of competitors.

Medscape, Mediconsult and WebMD are just a few of the online health sites offering medical literature searches. Later this summer the American Medical Association and six other medical societies will launch Medem, a for-profit company that hopes to become a trusted source of health information by virtue of its prestigious parentage. One of e-Skolar's first partners is Agilent Technologies, the instrumentation company spun off from HP last year. Agilent will buy about 1,000 software licenses from Stanford and incorporate Stanford Skolar, M.D., into some of its medical instruments as they become Web-enabled.

John Fanton, e-business manager for Agilent's health care division, says his company initially plans to use Stanford Skolar, M.D., in its intensive care unit nursing stations.

Fanton says he expects Stanford Skolar, M.D., to be incorporated into medical monitoring to give doctors and nurses access to medical information while they're examining patients. Agilent also will market Stanford Skolar, M.D., for Stanford, selling $240 annual licenses to doctors through its Web store. "I think one of the benefits of the e-Skolar approach is the trusted content," Fanton says. Having a medical center like Stanford behind it adds value." Lippe says e-Skolar will make money through subscriptions and selling continuing education services. It is negotiating partnerships with tech firms, medical centers and health care companies. Lippe says drugmakers have approached e-Skolar about sponsoring licenses for physicians.

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