DuPont and WebMD shape $220M marketing alliance
By DON LONG
Healthcare InfoTech Managing Editor
The big deals keep coming for WebMD (Atlanta).
On Wednesday, the company said that over the next five years it will receive $220 million from the giant chemical firm, DuPont (Wilmington, DE), in an alliance designed to bring DuPont’s vast life science knowledge and expertise to the WebMD healthcare Internet site.
The partnership is be the first in a marketing effort by DuPont to develop its newest business, Digital Consumer Health, a venture intended to provide medical and health information on-line. DuPont is hoping that the alliance with WebMD will give a big boost to the new unit, and in return WebMD will get its largest source of funds and the support of a prestigious name from the life sciences Goliath.
"We want to be the Amazon.com of health care for the Web," WebMD Chairman and CEO Jeff Arnold told the Atlanta Journal-Constitution. "This investment is a vote of confidence in our company."
The deal caps a succession of alliances for WebMd, which is on an accelerating diversification pace. Early last month, it said it would pay $56 million to link up with the big Internet portal Lycos (see Healthcare InfoTech, March 12, 1999), and over the last 10 months it has raised more than $70 million through a variety of other alliances
Under terms of the exclusive agreement, about $40 million will be used by DuPont to provide information about prescription and OTC medicines, foods and nutritional products to WebMD for both its consumer and physician site pages. The other $120 million will be used to underwrite subscriptions for doctors, with a program to be launched in May to market and distribute the physician subscriptions for trial memberships to the site and other promotions.
In return, WebMD will promote DuPont’s life sciences offerings on-line, on air and in print through a co-branded advertising campaign. Products to be pushed will be various vitamins and drugs, including some of DuPont’s flagship medications: Sustiva, an AIDS treatment, the anticoagulant Coumadin and Revia, a drug that suppresses the craving for alcohol.
Arnold said that WebMD will capitalize on the new alliance through link-up "with leading consumer sites such as Lycos and CNN to provide significant promotion online, on air and in print of the DuPont life sciences offering through a multimillion dollar co-branded advertising campaign."
Kurt Landgraf, a DuPont executive vice president, called the alliance "an important step in DuPont’s integrated life sciences strategy. DuPont’s alliance with WebMD is targeted toward holistically addressing each individual’s need of credible, science-based information, products and services to ensure wellness and longevity."
He noted also that the WebMD site will be the first place for consumers to meet DuPont on the Internet and that the company is expecting profitable operation from its Digital Consumer Health unit in its first year of operation.
DuPont Digital Consumer Health will be headed by Elizabeth Browning, who said the alliance "is one more step for DuPont in attaining critical mass and gaining additional exposure for our life sciences offering.
"We intend to deliver the information in a consumer-friendly manner and expect it to be the preeminent personal health and lifestyle destination. WebMD’s patent-pending technology will also allow consumers to create personalized portfolios of both the life sciences and other healthcare information according to specific needs."
DuPont said in a statement that it intends to form partnerships with other leading companies in the pharmaceutical, nutrition and health categories as it builds this business.
WebMD was launched last fall), and is expected to go public with a $55 million IPO offering this summer.
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