WEBMD Makes Two Acquisitions to Enrich and Personalize Consumer Healthcare Content, Add Online Patient Communities.

ATLANTA--(BUSINESS WIRE)--Jan. 26, 1999--

WebMD Acquires Sapient Health Network, Gains Most Active Web-based Support Communities of More Than 150,000 Chronic Disease Sufferers

Acquisitions of Direct Medical Knowledge and Sapient to Add Technologies Enabling Consumers to Personalize Healthcare Information Searches According to Individual Conditions

WebMD, Inc., a leading full-service Internet healthcare portal, announced today two acquisitions which broaden its online healthcare community, enhance its consumer healthcare content and improve its ability to provide personalized health and wellness information to consumers. WebMD's healthcare portal offers consumers comprehensive, branded medical and healthcare information through its free Health & Wellness Web site, as well as an integrated suite of services and information for physician subscribers through a distinct healthcare professional Web site accessible through the same portal.

The acquisition of Sapient Health Network(TM) (SHN), a free, online health information and support service (currently at http://www.shn.net), will offer those visiting WebMD's free Health & Wellness portal access to Web-based support communities for chronic disease sufferers - over 150,000 members in 10 communities and a Women's Health Place covering eight topics. WebMD will also integrate SHN's unique patent pending "personalization" technology, which allows consumers to create customized information portfolios.

The acquisition of Direct Medical Knowledge(TM) (DMK), a Web-based publisher of health and medical information (currently at http://www.dmk.org), will also bring a new dimension of personalization to the delivery of branded, premier health and wellness information to consumers visiting WebMD's Health & Wellness portal.

WebMD, Inc. Chairman and CEO Jeffrey T. Arnold said: "With these acquisitions, WebMD has made great strides in providing targeted, trustworthy and credible healthcare information to consumers, as well as the broad online support communities. Both SHN and DMK bring with them unique technologies and resources that will build on WebMD's commitment to empower consumers and help them take charge of their health."

The two companies and their Web sites will become entirely integrated into WebMD, Inc. and its consumer Web site, www.webmd.com, in a two-phase plan to be completed by the third quarter of 1999. As a result of the acquisitions, WebMD will expand its employee base 75%, from 99 to 154, and gain offices in Portland (Oregon) and San Francisco.

Mr. Arnold added: "To ensure that WebMD gains the full value of all that SHN and DMK bring to the equation and that their integration is seamless, our President and COO, Jay Gilbertson - who oversaw the successful acquisition of nearly 30 companies in his ten-year tenure at HBO & Company - is managing these acquisitions on a day-to-day basis."

Personalized Healthcare Information, Supportive Communities

WebMD's acquisition of SHN and DMK is geared toward providing personalized, condition-specific information and support to people who are concerned about their health, and to their family and friends.

Jay P. Gilbertson, President and Chief Operating Officer of WebMD said: "Our acquisitions of SHN and DMK are important building blocks in creating a consumer Web site that combines content from the healthcare field's top information providers with powerful state-of-the-art search technology that delivers the health and wellness content based on an individual's specific needs. By gaining a network of support communities, we have also taken a significant step toward fulfilling an important WebMD goal - helping patients better connect with the information and people they need the most. We intend to not only to nurture and build on SHN's 10 existing communities and a women's health place covering eight topics, but also to extend the community concept by adding other disease categories and medical conditions."

The integration of SHN and DMK content and services into WebMD's consumer Web site will further enhance current WebMD consumer health and wellness content, provided by healthcare information leaders such as: Thomson Healthcare Information Group (for physicians' reference and online publications), InteliHealth (general health and wellness content from the Johns Hopkins/Aetna U.S. Healthcare(TM) site), A.D.A.M. (for anatomical and physiological software) and The National Jewish Medical and Research Center (the latest advances in respiratory and immunological diseases.)

Sapient Health Network

With the SHN acquisition, WebMD will incorporate into its consumer offering two powerful and complementary search and retrieval technologies. The Intelligent Profiling System creates detailed profiles of each member, including size of tumor, side-effects from interferon treatment, epinepherine or inhaled corticosteroid use, stem cell transplant, educational level and age, just to name a few. Based on those profiles, the Intelligent Query Engine automatically scours Web sources several times a day to gather customized information. WebMD will also offer consumers 10 different online health communities of more than 150,000 sufferers of chronic conditions, ranging from breast cancer to diabetes to cardiovascular disease, providing patients with an unmatched support mechanism.

Mr. Arnold said: "There is no substitute for healthcare information and support communities that are personalized to an individual's condition and symptoms. We looked to Sapient for their carefully selected health information, advanced search and retrieval technology and their condition-specific support communities enabling consumers to connect with other patients sharing similar concerns -- all of which will amplify our existing health and wellness information and services and become a critical piece of our consumer site."

Direct Medical Knowledge

WebMD will integrate DMK's state-of-the-art database, publishing and Web technologies, as well as the DMK Electronic Library(TM) and other information resources into its consumer Web site, enhancing its current offering of in-depth and unbiased medical and health information to consumers, while adding powerful customization features. The new technologies will enable WebMD consumer site visitors to easily find, or have selected for them, only the material that is most relevant to their needs, preferences and medical situation. WebMD will also augment its in-depth consumer-oriented health, medical and wellness information with DMK's vast library of information, pre-screened by a team of medical experts and annotated and organized according to detailed clinical and preferential characteristics.

Mr. Arnold said: "Direct Medical Knowledge is a perfect complement to our existing health and wellness content, adding advanced personalization capabilities that allow consumers to quickly and easily find in-depth information suited their individual needs. The acquisition also provides an important San Francisco base for us and we are committed to integrating their staff into the WebMD team."

WebMD To Integrate SHN and DMK

The integration of SHN and DMK will take place in two stages. During the first phase, the three companies' Web sites will remain at separate addresses, but be inter-linked via user-friendly hyperlinks and enjoy a unified look and feel. The second phase will see a total migration of SHN and DMK content, services and membership structure to WebMD's consumer Web Site. Consumers visiting the SHN or DMK Web site after this time will be directed to www.webmd.com. All current registered users of SHN and DMK will be informed that the acquisitions are in effect immediately and are geared toward increasing the respective companies' capabilities to expand and improve member services more rapidly and effectively.

James Kean, Co-founder, President and CEO of SHN, said: "We believe that integrating our online communities and patent pending personalization technologies into WebMD's Consumer Health & Wellness site will create an unmatched online healthcare brand for consumers. In addition, our acquisition provides us the resources to more fully develop our proprietary technologies."

Ralph Clark, President and CEO of Direct Medical Knowledge, said: "We couldn't be more pleased to join with WebMD and together we will build a trusted brand for consumers looking for reliable, personalized healthcare information targeted to their individual healthcare needs."

Sapient and Direct Medical Knowledge Executives to Join WebMD Executive Staff

Though SHN and DMK Web sites will be incorporated into WebMD in two phases, the three companies' employees have already begun to work as a single business unit. With the addition of 33 SHN and 22 DMK employees, WebMD's staff has grown 75%, to 154 total. The founders of SHN and DMK will also join the WebMD executive staff, bringing significant industry expertise with them.

James Kean, Co-founder, President and CEO of SHN, will become WebMD's Vice President of Consumer Products, and will oversee consumer business development and pharmaceutical sales. William J. Kelly, SHN's Co-founder and Executive Vice President will assume a position at WebMD as Vice President of Member Services and will be responsible for managing the WebMD consumer Web site and support communities. Kris Nybakken, SHN's Vice President of Technology and Information Systems will become WebMD's Chief Technology Officer and will be responsible for all technology planning and development. SHN's Portland, Oregon headquarters will become a WebMD affiliate office.

DMK Founder and Chairman Ryan Phelan will join WebMD's executive staff as Vice President of Consumer Strategic Planning; Ralph Clark, President and Chief Executive Officer of DMK, will assume a role at WebMD as Vice President for Business Product Development for Consumer Products. DMK's San Francisco headquarters will also become a WebMD affiliate office.

About WebMD

Launched October 5, 1998, WebMD, Inc. (www.webmd.com) provides a Web-based solution for the administrative, communications and information needs of healthcare professionals and consumers. WebMD is a single point of access to insurance verification and referrals via an electronic data interchange service, enhanced communications services, branded healthcare content, medical transcription services and other Web-based solutions. For healthcare professionals, WebMD's Web site is designed to simplify healthcare practices by integrating multiple administrative, communications and research functions into a single, easy-to-use Internet-based solution. WebMD's separate healthcare consumer Web site provides premium, branded content to assist consumers in making informed healthcare decisions.

WebMD has more than 30 strategic alliances for content, services and distribution with companies, including HBO & Company (NASDAQ: HBOC), ENVOY Corporation (NASDAQ: ENVY), MedQuist/Transcription Services Ltd. (NASDAQ: MEDQ), DePuy Orthopaedics, Inc., a Johnson & Johnson company (NYSE: JNJ), Physician Sales & Services (NYSE: PSS) and Thomson Healthcare Information Company, Inc.

WebMD physician subscriptions are available by calling (877) GO-WEBMD or accessing the web site at http://www.webmd.com. Consumers can access comprehensive healthcare information and services through a separate web site at the same address.