WebMD Inc. of Atlanta, has acquired two promising but struggling online health companies, SHN of Portland, Oregon and Direct Medical Knowledge of Sausalito, California.

SHN (formerly Sapient Health Network) hosts some of the most highly-regarded online communities on the Net. To date, SHN has limited its offerings to only ten chronic conditions, from breast cancer to fibromyalgia. The Portland, Oregon firm i s currently the online home to about 120,000 members. SHN's technologies include its Intelligent Profiling System which creates detailed profiles of each member. Using the information in those profiles, the company's Intelligent Query Engine automatically checks key Web sources several times each day, gathering customized information that matches each members needs. SHN President Jim Kean told the Oregonian that the combined forces of the three companies would make the new WebMD "the Amazon.com of health care." Kean said that he hopes to expand SHN's 33-person work force as it becomes the combined company's technology development arm.

San Francisco-based Direct Medical Knowledge is an online medical librarian service. The company offers its customers custom-tailored packets of pre-screened health and medical information, drawing on its extensive library of licensed content. T he company licenses selected materials from popular and professional books, magazines, journals, newsletters, and Internet resources. All content in the DMK Library is evaluated and approved by medical professionals.

Atlanta-based WebMD offers an extensive assortment of paid services to physicians and a free health and wellness center for consumers. Cofounders Jeff and Meg Arnold started the company that became WebMD in 1994 with a $25,000 investment f rom family members. A year ago the company switched its emphasis from cardiac event monitoring to Internet-based health services. In August 1998 it changed its name to WebMD. In October the company launched its Web site. At the time of the launch, Jeff Ar nold told the trade publication The Industry Standard that the company was valued at $250 million.

Jeff Arnold now serves as chairman and CEO. WebMD's President and COO, Jay Gilbertson, was formerly president and co-COO of HBOC.

WebMD filed a registration for an initial public offering on Jan. 28. The company has financial and/or marketing alliances with McKesson/HBOC, San Francisco; Premier Inc., San Diego; Tenet Healthcare Corp., Santa Barbara, Calif.; and Trigon Blue Cross Blu e Shield, Richmond, Va.

Published in The Ferguson Report, Number 1, March 1999

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