WebMD, News Corp. Seek Second Opinion

WebMD and News Corp. Tuesday revised their strategic relationship, which
was forged in December 1999.

The renegotiations are a part of a strategy in which partnerships are
being re-evaluated in light of several criteria, including profitability,
strategic relevance and the impact of future new revenue opportunities,
noted Martin J. Wygod, CEO of WebMD.

“Today’s announcement highlights our commitment to redefining our
relationships so that they make both economic and strategic sense for WebMD
and our partners.” he said. “In addition to reducing WebMD’s outstanding
shares, I believe that we have restructured this relationship in a way that
allows both WebMD and News Corp., to apply their respective expertise and
resources where each can create the greatest value for shareholders.”

As part of the renegotiations, News Corp. will transfer its 50 percent
interest in an international joint venture back to WebMD, relieving News
Corp. of its obligation to provide $300 million of international media
services, the first $100 million of capital, and any future capital
requirements to the international joint venture.

Meanwhile, WebMD will transfer its 50 percent stake in the Health
Network, a health-focused cable network, to News Corp. Upon transfer to News
Corp., WebMD will be relieved of all future capital commitments to The
Health Network and will not be required to issue an additional 8.3 million
shares of its common stock in exchange for News Corp.’s 50 percent interest
in The Health Network.

Under the terms of the revised contract, WebMD will retain the rights to
$205 million in domestic media services over 10 years and will continue to
provide its content for use across News Corp’s media properties for $48
million over 4 years.

News Corp will transfer to WebMD the 155,951 shares of WebMD’s Series A
preferred stock that it issued in January 2000 and WebMD will issue to News
Corp a warrant to acquire 3 million shares of its common stock at an
exercise price of $15 per share. The 155,951 shares of WebMD’s Series A
preferred stock would have been convertible into 21,282,645 shares of WebMD
common stock in January 2003.

WebMD’s restructuring plan is ongoing. Last week the firm announced that
it had terminated a strategic alliance with DuPont.

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