WebMD Issued 2.4 Million Share Warrant To AOL
05-23-01 03:18 PM EST
WebMD Corp. (HLTH) issued a warrant to America Online Inc. to purchase 2.4 million shares of stock for $9.25 a share as a result of an alliance between the companies, according to a regulatory filing.
WebMD entered into a strategic alliance with America Online, a unit of AOL Time Warner Inc. (AOL), earlier this month. It will be the primary provider of healthcare content and services through America Online's Web services. Financial terms weren't available at the time of the announcement.
According to WebMD's 10Q filing with the Securities and Exchange Commission, along with the warrants issuance, WebMD and AOL will share revenue from advertising, commerce and programming on the health channels of AOL properties. WebMD will receive 80% of the revenue up to an annual threshold that wasn't defined in the document. The company will receive 60% of the revenue after that, the May 15 filing said.
Also, WebMD won't make any cash payments to AOL to carry its products during the three year agreement, the filing said.
WebMD has plans to create a cobranded personalized health service for AOL featuring WebMD's "personalized news, health assessment and monitoring tools, communities and newsletters, integrated with AOL's calendaring and reminders."
The service will give users the ability to communicate with their health plan, doctor, pharmacy or other providers.
WebMD reported a first-quarter loss of $1.04 billion, including $287 million in charges.
-By Christopher Scinta, Dow Jones Newswires; 202-628-7699; chris.scinta@dowjones.com
(This story was originally published by Dow Jones Newswires)
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