DrKoop.com and AOL Sign $89 Million Deal

Online health network drkoop.com (Nasdaq: KOOP) raised more than $84 million (US$) in an initial public offering on June 8th. That might seem like a lot of money, but drkoop.com is now spending all of that money — and then some — on one single deal.

Drkoop.com announced today that it has signed a strategic marketing alliance with America Online (NYSE: AOL). Under the terms of the deal, drkoop.com will pay AOL $89 million over four years. AOL will also receive fully vested and performance-based warrants to purchase shares in drkoop.com.

Drkoop.com, led by former U.S. Surgeon General C. Everett Koop, will now be the premier health content partner across five AOL brands: AOL, CompuServe, AOL.com, Netscape Netcenter and Digital City. Drkoop.com will provide consumer-focused resources on hundreds of health topics across the network of brands. This content is expected to launch in the fall.

“Drkoop.com is the nation’s leading dedicated online consumer healthcare network, and for decades, Dr. Koop’s message of openness and education has resonated with Americans as they have looked for the information that will allow them to make better health care decisions,” said Bob Pittman, president of AOL.

Drkoop.com Will Use AOL Sales Staff

Drkoop.com will leverage AOL’s interactive sales force of more than 600 to build e-commerce and advertising opportunities on its site, as well as its affiliates. Drkoop.com also plans to use the sales staff to support the launch of new products and services.

“The close relationship drkoop.com is building with America Online will put the power of information back in the hands of millions of Americans. For every person, in any place and at any stage of life, there’s nothing more central to their lives than the health and the well-being of themselves and their loved ones,” said Koop, who is chairman of drkoop.com. “Working together with AOL, we’re empowering millions of Americans to take control of their health care and wellness decisions.”

According to Media Metrix, drkoop.com is the most popular online healthcare site with 1.4 million unique visitors in May. Meanwhile, AOL’s health channel is the top online health destination, with more than two million unique users per month.

Stock Impact

Shares of drkoop.com soared in early trading today, climbing 11-3/4 to an all-time high 35-3/8. The company went public at $9 last month and closed its first day of trading at 16-7/16. Shares of AOL were up 4-11/16 to 119-15/16 in early trading today.