After shakeout, medical websites find new health
When a 32-year-old patient with rapid heart palpitations showed up in the emergency room at Massachusetts General Hospital saying she suffered from Holt-Oram Syndrome, Dr. Jonathan Adler had no idea what this syndrome was. But he knew he had to work quickly. Using his computer, he looked up a comprehensive description on eMedicine.com, a Nebraska-based Web database of various diseases and conditions. He got his answer in minutes -- an inherited disorder that causes abnormalities of the upper limbs and heart.
While he still uses textbooks to review content, Adler said he tends to look at eMedicine when it comes to making clinical decisions for patients.
"A textbook can't take the space to go into it," Adler said, but eMedicine can "because it's a bigger hard drive somewhere."
In fact, 64 percent of all US practicing physicians use online technologies for pharmaceutical-related products and services, according to a study released last week from New York market information firm Manhattan Research. The majority of these physicians -- 87 percent -- believe the Internet is a critical resource on information for prescription drugs and treatment options, with three-fourths admitting their behavior is sometimes or often changed as a result of what they found online, according to the study. In addition, about 39 percent of all US adults rely on the Internet for health information, according to the 2003 study by Manhattan Research.
Medical and health websites, like eMedicine, which generated its first profit last year, are experiencing a resurgence after the dot-com bubble burst in 2000, shuttering many medical websites that couldn't generate enough ad revenue to compete. Now, with fewer competitors and more partnerships with other websites and companies, the surviving medical dot-coms have found better ways to reliably generate revenue through new advertising techniques. The fallout has allowed websites such as industry giant WebMD to grab an even larger consumer audience and participate in the now $250 million industry.
"When the shakeout came, these large companies started to emerge, get more powerful," said Mark Bard, president of Manhattan Research. Companies "interested in reaching large numbers of consumers now have a viable option."
The top three most visited health, fitness and nutrition websites in June were WebMD, eDiets, and the US National Institutes of Health, according to Nielsen/Net Ratings.
WebMD provides health services and content to consumers, physicians, providers, and health plans. WebMD Health, the provider for online information, brought in $31.9 million in revenue for the second quarter, from $26.5 million a year ago. WebMD also provides the content for the health section for MSN and American Online's health channel.
WebMD's online business is primarily funded through partnering with large pharmaceutical, medical device, and consumer package goods companies with products that may have a particular health claim or health information, said Wayne Gattinella, WebMD Health president. Part of what makes large general health websites like WebMD Health successful is they cater specifically to sponsors and are constantly updating their sites to offer something new for the sponsors and consumers, Bard said.
"Several years ago it was banners and buttons touted as the ultimate ad vehicle," Gattinella said. "What's changed is that as people really got sort of numb with the amount of banners, what people really want is content. They want a deeper level of information that informs and doesn't just provide advertising claims."
In a march toward profitability, health websites have set up business models to help attract sponsorship. eDiets, the leading independent diet website that helps subscribers keep track of their weight-loss programs, is funded through its subscriptions. The site has generated more than 1.6 million subscription sales since 1996 and this year will generate $50 million in revenue.
"We had set up a business model, getting revenue for our services, rather than give it away, hoping to make it up in the sale of advertising," said Alison Tanner, eDiets chief financial officer.
The Florida-based company, which has been profitable since 2000, offers 19 different programs, including the Atkin's Diet and Weight Watchers. eDiets has become successful because weight management and obesity is one of the top things people research on the Internet, Bard said.
But some companies, like eMedicine, had to change their sources of revenue in order to survive the tech crash. In the website's early years, eMedicine was mostly funded through its founders, ad revenue, and donated time. However, at the nadir of the crash, the company had to seek out investments from organizations like Santa Barbara, Calif.-based Tenant Healthcare Corp., Communicade, and Miami-based private-equity firm HIG Capital. The total amount invested was $15 million, enough to sustain eMedicine until it could generate enough revenue from the site to become profitable, said Adler, one of the company's three founders.
"There was a period of significant challenge, where if things hadn't gone properly we could have had a bad outcome," Adler said.
Not all popular health websites are funded commercially. The federally funded US National Institutes of Health generated 3.3 million unique visitors in June.
A typical health and fitness website user is Julia Prentice of Northborough, an eDiet member for a year, who said she enjoyed the support of her challenge team, an online weight management group of Prentice's peers who provided encouragement to stick to the diet. The team, which included people from Canada and the Philippines, encouraged her to stay motivated to lose 50 pounds, Prentice said.
"If you're having a bad day and you're all by yourself, you can really get down," Prentice said. "It really makes a big difference that there is someone there. You actually may not see the person's face, [but] by posting on a regular basis, you get to know the people by the stories about they tell."
Wendy Lee can be reached at wlee@globe.com.
