News Corp. Teams With Healtheon

Media giant News Corp. and Healtheon/WebMD Corp. said they formed a $1-billion programming and marketing partnership, with News Corp. taking a 10.8% stake in the online health information and transaction network.

In October, the companies said they had signed a nonbinding letter of intent to develop worldwide media and branding services, an international Internet venture and health and fitness cable television for U.S. audiences.

News Corp. will provide $700 million in branding services over 10 years to Healtheon/WebMD, which links physicians and consumers with health-care institutions, and will purchase $100 million of Healtheon/WebMD stock at $50 a share.

The alliance also includes a $100-million cash investment by News Corp. in an international joint venture and a $62.5-million, five-year licensing agreement for syndication of WebMD’s daily broadcast content.

News Corp. will transfer to Healtheon/WebMD a 50% interest in the Health Network, a health-focused cable network, and 100% ownership of https://thehealth

network.com.

News Corp. executives said the use of Healtheon/WebMD content across News Corp.’s traditional media would reverse the current model, in which Web sites often pull from traditional media sources.

“With this deal, we’re using the Web as a source for original, unique programming which will be leveraged across all media owned by News Corp.,” said President and Chief Operating Officer Peter Chernin.

Shares of News Corp. fell 38 cents to close at $38.44 on the New York Stock Exchange, while Healtheon/WebMD rose 94 cents to close at $46.44 in Nasdaq trading.