I was just thinking the other day: “gee, we haven’t heard from DrKoop.com” for a while. Well, after languishing in bankruptcy for ages, somebody finally bought the site for next to nothing (still more than it’s worth). This, despite the fact that along the way (in addition to his compensation) Dr. C. Everett Koop made at least $10M for himself and his holding company selling his shares when the roller coaster was peaking, according to this link: http://www.whafh.com/cases/complaint/drkoopcmplt.htm
Monday July 15, 12:00 pm Eastern Time
Reuters Internet Report Former Internet Darling DrKoop.com Sold for $186,000
BOYNTON BEACH, Fla. (Reuters) – DrKoop.com, the online consumer health information pioneer that rode the Internet frenzy from boom to bankruptcy, on Monday was bought by Vitacost.com, a seller of health-related products over the Internet, for $186,000, Vitacost said.
At one time worth more than $1 billion, DrKoop.com — founded in 1997 by former U.S. Surgeon General C. Everett Koop — fell into bankruptcy in December as it struggled to turn public interest in its online health information into a reliable revenue stream.
Vitacost, a privately held company based in Boynton Beach, Florida, sells health and nutrition products over the Web.
Vitacost paid $186,000 in cash for DrKoop.com’s assets, which included the brand name, trademarks, domain names, the Web site, and the e-mail addresses of its registered users.
The site attracts more than 900,000 visitors a month and has a database of more than 2 million registered users, Vitacost said in a statement.
DrKoop.com became a case-study for the roller-coaster ride of the dot-com era. Unveiled with a splash as Empower Health, the company sank into a cash crisis barely a year later, only to find an angel investor who provided enough backing until the company could sell itself to the public in 1999 as DrKoop.com.
The float brought in about $88 million even though the company had tiny revenue and was $15 million in the hole. It didn’t stop DrKoop.com from moving in to plush new headquarters in Austin, Texas, following the IPO.
Amid the portal rage of 1999, DrKoop.com signed a multimillion-dollar deal with Walt Disney Co. (NYSE:DIS – News) and its Go site, which eventually would be shuttered. It also agreed to pay America Online, now a unit of AOL Time Warner Inc. (NYSE:AOL – News), an enormous sum to provide health information to its users.
Those types of deals eventually would be mocked on Wall Street, but were an Internet mainstay at the time.
The site’s main commodity, Dr. Koop himself, began to suffer when he faced questions about his ethics in a front-page story in The New York Times about how Koop was earning commissions for products sold on the site.
By 2000, DrKoop.com’s auditors had serious doubts about the company’s ability to survive as it piled up debt. Directors dumped shares, mass layoffs began and the stock sank to less than $1.
Vitacost now boasts about the more conservative approach it took than its online peers did.
“In fact, we did not have and do not have one venture capitalist investor nor did we do an IPO,” Vitacost President Allen Josephs said.
Vitacost has achieved profitability and is using the money to buy brands like DrKoop.com, he added. The company still sees medical information as a burgeoning area on the Internet.
“Consumers are increasingly hungry to educate themselves about how both mainstream and natural or complementary medical practices can enhance their personal health and wellness,” Josephs said.
He said he hopes to achieve DrKoop.com’s original promise — of becoming the most trusted repository of medical information on the Internet.