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Dr. Drew Flies the Koop

In the M&A landscape, here's a true match made in heaven. Drkoop.com announced plans to acquire drDrew.com for 1.58 million shares of common stock and roughly $150,000 in cash. Based on drkoop.com's buck-o-five share price, the deal is tentatively worth about $1.5 million. The going-out-of-business sale officially marks the end of the ex-MTV pop-psychologist's attempt to pan for Net gold, while flushing a fistful of venture capital money down the commode.

Sherwood Partners, an advisory firm that specializes in working with struggling start-ups in search of "exploring strategic alternatives," handled the clean-up duties. In a nutshell, the company pawned drDrew.com for the trifling sum of $150,000 in cash, because as we all know, drkoop.com won't be around in a year to make good on the million plus shares worth of restricted stock.

Out-of-favor Palo Alto-based Garage.com was the first incubator to throw money at the idea of Dr. Drew Pinsky taking his wacky sideshow on the Web. Softbank followed suit with an $8 million second round of funding late last year. Since that time, the enthusiasm from investors toward online health-related content Web sites has completely evaporated. To make matters worse, MTV put Dr. Drew's raunchy sex-advice show Loveline out to pasture earlier this year, making the namesake less of a draw.

Dr. Drew managed to extend his fifteen minutes with a handful of appearances on CBS' high-profile bomb, Big Brother, but the guest spots by the resident shrink just screamed sell-out. Fortunately, the good doctor can always fall back on his regular gig as the co-host of a rather entertaining late-night radio show cut from the same Loveline cloth, minus much of the cheap "pull my finger" humor of its TV cousin, that's been nationally syndicated since the early 80s. But like many failed dot-com celeb ventures that came before him, Drew Pinsky was better off keeping his day job.

While Dr. Drew busies himself trying to restore some respectability to his image, drkoop will inherit the same revenue riddle the previous owner grappled with. Namely - how to monetize those Gen-Y eyeballs. Former drDrew.com CEO, Curtis Giesen, surveyed his audience this summer to test whether readers would be willing to pay for content on the health Web site. Plans were in the works to roll out a pay-for-view service that would charge users somewhere in the neighborhood of $50 per month, but the idea was ultimately shelved.

What's more pressing for a publicly-trade company like drkoop.com is whether this latest land-grab increases shareholder value. If I didn't know better, I'd think the management was mistakenly under the impression that Dr. Drew's celebrity was at its peak, rather than riding off into the sunset. What's more, content doesn't come cheap, despite drkoop's assertion that it will continue running drDrew.com "with minimal additional expense." Which may be why investors gave this deal a collective yawn, boosting shares by a paltry $0.03 on the news.

Any questions or comments, love letters or hate mail? As always, feel free to forward them to kblack@internet.com.

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