Advertising-dependent WebMD is laying off one out of seven employees, or about 250 people in the hopes of generating, along with other measures, about $45 million in spending cuts. That's a lot coming from a firm with $117 million in quarterly revenue (down 13 percent from the year before).
Somewhat cryptically, the company's statement on the change stated that it "is streamlining its sales and delivery processes to enable better collaboration with our sponsor and agency clients," which may imply a move toward out-of-house ad sales, or perhaps even hitching onto a network or two. A question to WebMD on the matter had not been responded to as of this morning.
WebMD, known mostly for its consumer-facing media site on health, is a mash of sites and services, including the once-high-flying Medscape and Healtheon, which at various points held out the model of providing actual services to the medical community and audiences. Healtheon may be remembered as the company Jim Clark helped start after he left the then-industry-shaking Netscape. The current firm consists of Healtheon's original corporate structure, although the WebMD brand has been swapped in following the 1999 merger.
The health information services model turned out to be more difficult to crack (as U.S. healthcare reformers may be finding out about now), and most revenue has come from advertising, including in good part from drug companies, who have generally reduced online brand ad spending of late.
Drug ad spending has been roundly criticized as one of the factors increasing healthcare costs generally, and perhaps more importantly to pharmaceutical companies, it might not even work all that well.. Although drug brand jackers seem to always be on an upward curve.