WebMD’s Acquisition By Parent May Not Occur; Outlook Lower on Yahoo Fears

WebMD (NSDQ: WBMD), the online health information service, may not be sold back to its parent firm HLTH Corp, due to a “negotiation stalemate”, according to the companies. HLTH owns about 84 percent of WebMD. The two companies indicated in November last year that this transaction would occur, to give its shareholders more say in the WebMD business.

The negotiations will continue for a short time and if nothing happens by then, nothing will happen. Meanwhile, WebMD has raised its estimates for 2007 revenue and adjusted earnings but lowered its outlook for 2008 results. Part of its lower outlook include its display advertising deal with yahoo, where it has a “more conservative outlook…based on the potential acquisition of their business.”

The company has also sold off its offline professional medical reference and textbook publication business. This business was anticipated to generate revenue of approximately $1 million and $4.3 million for Q407 and full year 2007. More in the release here.