Steve Case, chairman and CEO of Revolution LLC, a co-founder of America Online, led off ContentNext’s EconHealth conference (ContentNext is the parent company of paidContent) in a Q&A with our co-editor Staci D. Kramer. Although the economics of health media was the main issue Case was prepared to address, Kramer began by asking him his thoughts on AOL’s $850 million purchase of social net Bebo. Lots more in extended…
— On AOL/Bebo: The acquisition means AOL (NYSE: TWX) is moving offensively, as opposed to defensively. Case: “I think it’s great that AOL is starting to take some risks and be more aggressive. It’s returning to the roots of AOL, which is community. We created instant messaging under that view.” Later on, Case described himself as an “attacker” and that he feels more comfortable playing offense as opposed to defense. He reiterated his point that AOL had been more reactive in the past few years. “AOL was an attacker and then they became more inclined towards playing a defensive position.”
— Community is critical: The view of social media is at the heart of Revolution, having a relative succumb to cancer. “Three, four years ago, it became more necessary to give consumers a way to manage their health. This was an undeveloped space. There were some pioneers who knew something was brewing. Innovation from the fringes is what’s going to drive the growth. Our goal is build a consumer goal, but the main thing was trying to aggregate the most engaged consumer audience and building that trust. The good news 10 years ago, there was a lot of health information on the internet. But it was undeveloped as an industry. Content + commerce + community – most of that equation was not developed and that’s where Revolution Health comes in.”
— Traffic: Revolution Health was number 4 in unique views in January, Kramer noted. There is disagreement about the traffic, whether it’s better to spend money on search to build traffic or let it develop organically: Case: “The majority of our traffic is organic. We’re trying to be a category-killer company and we need win commitments from new partners. For us, it was fundamentally launching a brand, launching a product. How much is willing to spend to get to number one? Case: “AOL was the first internet company to go public in 1992 and no one knew what we were talking about. But it allowed us to create more momentum and helped us fill out our product line. This is the same, it gives us the currency to encourage others to seek us out and partner with us.”
— On Microsoft: During the audience Q&A, EDventure’s Esther Dyson asked: instead of buying Yahoo (NSDQ: YHOO), should they invest in the online consumer health sector?: Case: Microsoft (NSDQ: MSFT) is making some moves, mostly through MSN. There’s a debate within the company on how much of a bet to place on consumer health care. They’re predominately an enterprise company, focused on software. I would be surprised if they didn’t lean that way, towards their core competency, which is enterprise. But they seem pretty committed to getting Yahoo.”
— The benefits of recession: Another audience member said that pharma companies only spend 5 percent of their budget, with the majority going to TV and to print. What will it take to move that money from TV to the internet? Case: “Health is arguably, the most targeted category. You can pick up a general interest magazine like People, that has a three-page insert describing an ailment you probably don’t have, then two pages of disclaimers. It doesn’t make sense. I see that 4 or 5 percent currently going online from pharma companies rising to 50 percent within five years, certainly within 10 years. A recession might accelerate that shift towards digital. Some pressure on budgets may shake them up and force them out of their comfort zone. Ten years from now, you won’t see those three-page ads in People. Kramer pointed out that many pharma companies are spending digital dollars on building up their own websites to communicate with consumers directly. Are there concerns about that competition? Case believes that consumer sites like his can serve a complementary role to health care companies’ own website activity.
— Hawaiian connection: Kramer asked about Revolution’s main revenue stream. Case said the company’s largest revenue is from advertising. He was reticent about specifics, saying it’ll certainly be more than half. Asked by a reporter from Forbes about the political candidates’ health care plans, Case said he’d dodge that, though he noted he went to high school with Barack Obama. “There’s a Hawaiian connection there,” adding that he had respect for the other two presidential hopefuls.
— Mobile: Not a major focus: At the moment, Revolution doesn’t have any major mobile products or services planned. Case: But over time, it will be logical to have alerts and a payment system operating over portable devices.”
— Profitability: How long will it take Revolution to reach profitability? “Within the year,” Case answered. How much do you have to spend to get there, Kramer asked. Case: “As little as possible, but as much as it takes.”