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Healtheon/WebMD Takes Kinetra, Allies with EDS, Lilly

Healtheon/WebMD Wednesday bought Kinetra, a joint venture of EDS and Eli Lilly, that provides electronic commerce services to physicians, in a deal worth $300 million.

Lilly will tap Healtheon/WebMD's (HLTH) content and online services. EDS will pick up Healtheon/WebMD's suite of offerings as well as promote the site to its professional network.

A marketing campaign is also part of the agreement, with Lilly spending $60 million over three years to advertise and market the Healtheon/WebMD site to both physicians and consumers.

In return, Healtheon/WebMD will integrate EDS' MetaVance Health Care Portfolio into its services. The two companies also intend to co-create products for the healthcare industry.

"By acquiring existing relationships and migrating Kinetra's current hospital, IDN and payor connectivity to our Internet-based transactions, we will accelerate our growth of electronic clinical transactions," said Jeff Arnold, Healtheon/WebMD's chief executive officer.

He said the EDS and Lilly partnerships will improve the site's credibility in the health care industry and bolster its transaction service's appeal.

Kinetra offers services for clinical document distribution and administrative transactions. The company processes more than 50 million transactions a year for more than 200 health care organizations with more than 50,000 physician users.