@ EconHealth: Health Community Sites Look To Challenge An Area Dominated By Search

David Kaplan
Friday, March 21, 2008; 11:07 AM

Noting that most health content is accessed by users typing a keyword into Google (NSDQ: GOOG), an afternoon panel at paidContent parent ContentNext's EconHealth conference delved into whether social media sites can challenge search.

-- Gathering the online health community: Steve Krein, CEO and co-founder, OrganizedWisdom, told the panel's moderator NYT.com health editor Michael Mason, that the main proposition for a health media site is that it can filter the information and offer some guidance. Many of these sites hope to gather users' personal health records to steer them to the right information. That's the main focus for Dean Stephens, president & COO, of Healthline. Stephen noted that hospitals and insurers tend to rank even lower in terms of the public's trust than journalists. Doctors, however, have a good deal more credibility with consumers. By tapping into social media sites, people can be steered to better plans, doctors and facilities.

-- Social media on steroids: Treatment for a herniated disc helped inspire Daniel Palestrant, CEO, doctors' community site Sermo: It was conceived during steriod-use?More in extended?

The company started with a $2 million investment. In a given week, doctors spend a collective 5,000 hours on the site. Sermo is aimed at doctors 45-years-old, who find less and less time to attend physicians conclaves. He thought about charging, but realized that it would be tough to for an unknown entity to catch on. An ad-supported model was also a problem, as doctors are used to dealing with the most sophisticated marketing ploys. In the end, Sermo decided to accept clients from the regulatory and health industry, who would pay to access the research discussed on the site. At the moment, Sermo isn't profitable. But Palestrant said the company target to be "cash profitable" later this year.

-- Ad Backlash: Trying to generate revenue from community sites - especially health-focused ones - is fraught with minefields. Sermo's Palestrant notes that a passionate community will let you monetize, but you have to do so very carefully. Sermo users erupted when it announced it would take ads from Pfizer. Ultimately, two-thirds accepted it. During the Q&A portion, ClickZ's Kate Kaye asked whether phama would attempt behavioral targeting, given the sensitivities among consumers in general. Raj Amin, CEO and co-founder, HealthiNation, responded that contextual tends to fire up less concerns versus behavioral. "Consumers will tell us very quickly whether they will accept these methods or not."

-- A bad time to go public: PaidContent's Joseph Weisenthal asked how the two competing economic trends?the decline of Wall St. and the sky-high valuations given to web startups?has affected Sermo's plan for a capital event (i.e., either a raise or a sale). Sermo ahas not retained a banker. We're not shopping the company and has not considered any acquisitions. As for going public, this is a very scary time to do so. Going public right now is more of a liability. But today, Visa took itself public for $17 billion - someone smarter than me decided to take the plunge - but there you go."

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