The four-year, $89 million alliance with America Online that drkoop.com
announced this week is a perfect example of the power of branding.
Immediately after the deal was made public on Tuesday, drkoop.com shares
surged in heavy trading, reaching as high as $45.75 before closing at
up 56% from Friday’s close.
While the stock’s price has since retreated — KOOP was trading Friday
$29 per share — I believe the real bounce will come in the long-term.
When drkoop.com filed to go public, I wrote a
Midday Report in which I called the IPO “the branding play of all
time.” The last few days
illustrate exactly what I meant:
On the day the AOL deal hit the media, I saw the instantly familiar
beard of former Surgeon
General Dr. C. Everett Koop everywhere, along with the AOL insignia. On
CNBC, in the New York Times,
on ABC News.com, even in the local newspaper that my wife forces me to
get, there was Dr. Koop and
AOL saying to us, “We’re the place to go online for health and medical
information and products.”
All right, maybe they didn’t say that verbatim, but that was the message.
And it will reverberate, especially
with the all-important future customer, the person who barely goes
online or doesn’t at all yet, which is still the majority of the U.S.
population. Many of them heard or read about the AOL-drkoop.com deal,
and will maintain an association between Koop, AOL and the Web.
Further, by giving drkoop.com direct access to its growing base of 19
million subscribers, AOL is providing the Web health site an
unprecedented online marketing channel. A large percentage of
subscribers tend to
stay within AOL’s user-friendly confines. If they want to find
information on health, they just click on the
Health channel provided by AOL. Oh, and look who’s here! Why, it’s Dr.
Koop, the beloved and trusted
former Surgeon General. I would recognize his dignified, benevolent
That’s how branding works. And whatever assets some of the other medical
sites possess, they don’t
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