Hype vs. reality

With 2010 dawning, we wonder what the future holds for the likes of the much-hyped Google Health. The decade that's drawing to a close offers plenty of cautionary tales.

DrKoop.com entered the new millennium on a high, with a peak market value of $1.3 billion not long after its IPO in July 1999. Problem was, the company's business model was flawed, and the dot-com market fell apart starting in March 2000. DrKoop.com's December 2001 liquidation netted $186,000.

Other companies have ridden the hype cycle to brief fame and occasional fortune, only to fall victim to the realities of the market. Healtheon/WebMD, formed by a November 1999 merger valued at $7 billion, was supposed to be DrKoop.com with a better business plan. That firm bought its way into new markets, including electronic data interchange (Mede America, Envoy) and practice management software (Medical Manager), and forged partnerships with the likes of IDX Systems, Eli Lilly, CVS and even Rupert Murdoch's News Corp. to enter other business segments.

The company never achieved its founders' dream of becoming a category-killing, one-stop shop for healthcare professionals and consumers. Instead, after registering net losses of $3 billion in 2000 and a staggering $6.7 billion in 2001--99 percent of which was in write-downs--WebMD downsized. In 2006, newly minted parent company Emdeon sold the EMR and practice management lines to Sage Software and spun off its business services unit to private investors, who later took the Emdeon name. WebMD first turned a profit in 2003, but after all the sales, the company today has just its flagship consumer website and the Medscape physician community--the latter a remnant of a merger that failed in 2001.

More recently, Steve Case's Revolution Health was supposed to be, well, revolutionary, offering a health portal and networking site for consumers to manage all their health and wellness information. Despite millions of users, Revolution Health cut its workforce in 2007 and closed two business units in 2008, before merging with Waterfront Media in October 2008. Haven't heard much from Revolution lately? Neither have we.

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