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WIKI ANALYSIS
WebMD (NASDAQ:WBMD) owns websites that gives its visitors information on a wide variety of medical conditions, overviews of available treatment options, and general information on lifestyle and preventative care. WebMD provides most of its services for free and makes money by charging other companies, particularly pharmaceutical companies, to advertise on its sites. The company earned $439 million in revenue and $117 million in net income in 2009.[1]
Healthcare costs have increased an average of 7.6% a year since 2000.[2] This has resulted in a growing effort by employers and healthcare plans to manage medical expense growth by encouraging plan members to take a greater share of responsibility for managing their own health. For these corporate clients WebMD creates a private version of its web portal. WebMD then stores a detailed health record for each employee and offers customized content on preventative care based on the employee's health profile. It also uses this information to match the employee with the best healthcare plan. WebMD charges both setup and monthly fees for its corporate services.
While the company has benefited from growing corporate demand for its products, it also faces growing competition in this area. Both Google (GOOG) [3] and Microsoft (MSFT) [4] have launched their own health services with a particular focus on the corporate market. The companies are targeting health insurance companies in the hopes that the insurance companies offer their own clients medical information and records services.
Company Overview
WebMD has three primary revenue streams: online advertising at its public network of sites, its licensing of private portals and it's small but growing print and publishing group.[5]
Public Network of Sites:
WebMD's public network includes WebMD.com, rxlist.com, emedicine.com, emedicinehealth.com, and others. These sites offer a variety of health information on diagnosing illnesses, treatment, and wellness advice.
Private Portal licensing
WebMD licenses its service to over 82 partners. These portals are licensed to corporations and health insurance providers helping employees and health plan members make more informed decisions about optimal health plans and physician choice. Employees or health insurance customers submit electronic health records into the system and WebMd’s portal will help the user find the optimum health plan, treatment, and physicians for their needs. The portals also help users estimate health care costs for retirement.
Publishing
WebMD publishes The Little Blue Book , WebMD The Magazine and a variety of other offerings sent to doctors offices targeting both the consumer and professional health care markets. Publishing is the fastest growing part of WebMD's business.
Business Growth
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References
- ↑
- ↑ Kaiser data on the growth in Healthcare from 2000-2005
- ↑ Google Health Launch
- ↑ Pharmaceutical Ad Spending
- ↑ WBMD 2009 10-K pg. 3-14
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