Healtheon/WebMD Corp. is buying OnHealth Network
Co., a Seattle-based provider of online health news, research and
reference guides, for about $313 million in stock, the latest
consolidation within the nascent Internet health information
industry.
The acquisition furthers Healtheon/WebMD's campaign to merge all
areas of "e-health" into a single, comprehensive site by spending
billions to absorb its rivals.
The company hopes to move the flood of paper-based medical
transactions involving patients, doctors, insurance companies,
HMOs, hospitals and other medical concerns onto a single,
convenient site on the Internet.
On Monday, the Atlanta-based Healtheon/WebMD said it would
acquire competitor CareInsite Inc. and its parent company in a $5.4
billion stock deal.
Healtheon/WebMD stock was down $2 at $66.62 1/2 in morning trading
on the Nasdaq Stock Market, where OnHealth shares rose $1.46 3/4 to
$11.12 1/2.
Online research firm Media Metrix said that OnHealth.com was the
most visited health care site on the Web in December with 3.2
million users.
"OnHealth's consumer marketing and content sensibility is a
natural fit and perfect addition to Healtheon/WebMD's strong
offering and creates the clear winner in the e-health category,"
Robert Goodman, president and CEO of OnHealth Network Company, said
in a statement.
Shares of Atlanta-based Healtheon/WebMD, which has not yet
turned a profit, have risen more than 80 percent since Jan. 1 as
investors bet that conducting medical business on the Web will
prove to be hugely popular.
Under terms of the latest deal, OnHealth shareholders would
receive 0.189435 share of Healtheon/WebMD stock. The deal is
expected to be finished by this summer and is subject to regulatory
approvals.
