HEALTHEON/WEBMD: Posts Greater Fourth-Quarter Losses
Despite doubling its revenue, Healtheon/WebMD, the Internet's fastest-growing health company, posted a huge fourth-quarter net loss, as the firm "digested new business units and pumped more money into sales and marketing," the Wall Street Journal reports. Although revenue for the company grew from $15.6 million in the previous-year quarter to $33.2 million last quarter, the company still reported a net loss of $234.7 million for the three months ending Dec. 31, 1999, compared to a net loss of only $18.2 million in the year-ago quarter. Overall, Healtheon/WebMD suffered a $49.3 million fourth-quarter operating loss. Many attribute the poor financial performance to the company's recent announcement that it "doesn't expect to fully integrate its professional Web site with doctors' existing practice-management software -- a step it is counting on to attract more physicians and significantly boost transaction revenue -- until the third quarter of this year." Chase H&Q analyst Steve Fitzgibbons said, "Clearly, this company is in a developing and partnering stage. They need to integrate the business and get to the point where they're really rolling out their solution." Healtheon/WebMD announced a "dizzying array" of acquisitions after the end of the year, including the purchases of Medical Manager Corp., CareInsite and Envoy Corp. Additionally, in an effort to attract more doctors to its Web-based services, the company employed a "strategic shift," linking the professional portal to various software systems already used by doctors instead of encouraging them to switch entirely to the WebMD portal. Company officials expect the Healtheon portal to be actively used by more than 200,000 doctors by the end of the year (Carrns, 3/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.