CBS Takes 35 Percent Stake in Medscape
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Under terms of the deal, Medscape will use the CBS trademark, promotion and branding, valued at $150 million over a seven year period. CBS subsidiary Infinity Broadcasting Corp. will be in on the investment and the marketing agreement. In return, CBS will receive a 35 percent equity stake.
In May, Medscape filed for a $57.5 IPO. No comments were made on how the new deal may affect the offering.
Medscape provides information and services to medical professionals and boasts more than 1.1 million registered members. Once the partnership with CBS is in place, Medscape content will be geared towards consumers as well.
"Along with sports and finance -- sectors in which we already hold Internet investments -- health is one of the leading areas of interest among Internet users," said Mel Karmazin, CBS's president and chief executive officer.
The firm already has stakes in MarketWatch.com, Inc. and Sportsline USA, Inc., as well as StoreRunner Inc., Office.com Inc., ThirdAge Media, Inc., and Switchboard Inc. In addition, CBS Corp. recently signed an advertising deal with hollywood.com.
Paul Sheils, Medscape's president and CEO, said that the new service will differentiate itself from competitors by its "authoritative editorial content with simplified health management tools" which will cater to consumer and professional needs.
Another pharmaceutical company, IVAX Corp., Thursday announced that it will not go forward in its deal with go2pharmacy.com, citing shareholder interest and "more attractive" alternative marketing options. IVAX will still take a minority stake in the not-yet-operational company.
George D.Lundberg, M.D., Medscape's editor in chief following an almost 20-year reign at the Journal of the American Medical Association, said he welcomed the partnership.