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Growing pains at WebMD

Health information site increases traffic but sees falling revenues in 2012

The health information sector is not an easy one to be in, at least if last week's financial results from WebMD are anything to go by.

The US-based online health information company saw its 2012 revenues slide by 16 per cent to $469m on the back of an $86m drop in advertising and sponsorship revenues from its public portals.

That the firm's smaller secondary revenue stream from private online health portals for employers and health plans only dipped slightly from $81.5m to $78.5m will be of little consolation.

During the last 12 months WebMD went from making a $74.6m profit in 2011 to posting a net loss of some $20.3m in 2012.

Releasing the results, the company said it expects the revenue slide to continue this year and that it will finish 2013 with sales that will fall to approximately $430m to $455m.

But, somewhat counter-intuitively, the news was received favourably by the stock market, with shares up 14 per cent immediately after the results were posted.

The figures were, it seems, not quite as bad as Wall Street had feared, and their reaction also illustrates a degree of belief in the company's CEO Cavan Redmond, who joined from Pfizer last summer.

"During the fourth quarter, we took actions to streamline operations and reduce costs," he said. "We enter 2013 as a more nimble organisation that is well positioned to meet the needs of our users and clients in a dynamic and demanding marketplace.”

Redmond added: “We will build on our strengths in providing consumers and physicians with trusted content and valuable tools across a market leading multi-screen platform."

The approach seems to be popular with users - traffic to the WebMD Health Network reached an average of 117.4 million unique users per month and 2.57 billion page views during the fourth quarter of 2012, up by 28 per cent and 20 per cent, respectively, from a year ago.

26th February 2013

From: Healthcare

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