Under the terms of the agreement, News Corp. (NWS) will take a 10.8 percent minority stake in the recently-merged health site. News Corp. will offer $700 million over 10 years for branding, and expects to spend $400 million domestically and $300 million overseas. In return, News Corp. will use Healtheon/WebMD (HLTH) content across its network of sites.
A fractional $100 million will go to the actual Healtheon/WebMD stock purchase. The deal includes a $100 million cash investment to co-create a international joint venture, dubbed Healtheon/WebMD International, which will develop Healtheon/WebMD’s services for the global market.
Also in the contract: News Corp. will offer a $62.5 million five-year licensing agreement for syndication of WebMD daily broadcast content; News Corp. will transfer a 50 percent interest of cable channel The Health Network to Healtheon/WebMD; and the health site will receive entire ownership of thehealthnetwork.com.
“This global partnership represents a powerful convergence of the largest international media company with the most powerful electronic brand in the Internet healthcare market,” said Rupert Murdoch, chairman and CEO of News Corp.
The two companies plan to develop such cross-over products as TV shows and health includes in established news, sports and other broadcasts, celebrity health campaigns, health columns in other media properties and patient health guides in medical offices.
“We’re reversing the established model for content distribution,” said Peter Chernin, News Corp. president and chief operating officer. “Companies traditionally re-purpose print or broadcast content for the Web; with this deal, we’re using the Web as a source for original, unique programming which will be leveraged across all media owned by News Corp.”
Healtheon/WebMD last week formed a joint venture with Internet powerhouse Softbank to develop a Japanese version of the health care and medical information site, its first international move thus far.