CBS Takes 35 Percent Stake in Medscape

With health care sites shaping up as the next big Internet play, television network CBS Corp.
Thursday took a 35 percent stake in medical information provider Medscape, Inc.

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.

The two companies will soon launch CBS.Medscape.com, which will be
integrated into CBS News.

“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.

The new site will take on drkoop.com, drugstore.com, planetrx.com, and the
WebMD/Healtheon alliance.

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.

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