News Corp. gives WebMD injection

Deal worth close to $1 billion

Pushing to expand its Internet presence, News Corp. announced Tuesday a strategic alliance with Healtheon/WebMD worth close to $1 billion.

The deal, which had been expected (Daily Variety, Nov. 9), calls for News to provide $700 million in branding services — $400 million domestically and $300 million internationally — over 10 years.

The media and entertainment giant will also purchase $100 million worth of Healtheon stock, invest $100 million in a new international joint venture and pony up $62.5 million for a five-year licensing agreement for syndication of WebMD’s daily broadcast content.

Equity stake

News Corp. will wind up with a 10.8% equity stake in Healtheon/WebMD. The Internet group will receive a 50% interest in the international operations of News Corp.’s cable net the Health Network as well as 100% of the net’s affiliated Web site, thehealthnetwork.com.

The partners are contemplating projects including Healtheon/WebMD sponsoring a half-hour healthcare show on the Fox network; a “Sports Injury Report” during football games, a quarterly celebrity campaign where Fox on-air personalities raise awareness of selected health issues; local “Medical Minutes” to air on the nightly news at Fox O&Os; and an “AskWebMD” column in the Murdoch-owned New York Post.

“We’re using the Web as a source for original, unique programming which will be leveraged across all media owned by News Corp.,” said the company’s president and chief operating officer Peter Chernin.

Speaking to investors at the PaineWebber media conference the day the deal was announced, Chernin said News Corp. will be examining its publishing and TV properties to find categories that are appropriate for further development on the Internet. He mentioned news, sports, financial services and religion, golf and New Age.

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