Yahoo!’s rejection of Microsoft’s $45 billion buyout bid didn’t stop advertising partner WebMD from adding the potential takeover to its laundry list of woes.
WebMD, which inked an ad pact with the Internet giant last year, cited the possible tie-up and “a more conservative outlook associated with our display advertising agreement with Yahoo!,” as a factor for lowering its full-year forecast.
The health-information outfit expressed concern that the new partner wouldn’t be quite as enthusiastic about the deal it signed with Yahoo! in October.
“The agreement requires a high level of partnership and coordination and we are not sure what that commitment will be if Microsoft acquires Yahoo!,” WebMD spokeswoman Jennifer Newhouse told The Post.
While WebMD cited several other factors for cutting its forecast, including drug companies’ pullback on marketing, it singled out the potential takeover even after reports that Yahoo! had rejected the bid. In Nasdaq trading, WebMD shares plunged $3.27, or 10 percent, to $28.83.
Analysts suspect the company is being cautious – perhaps too cautious – when it comes to the potential impact of the tie-up.
“The lowered expectation for revenue from the Yahoo! display deal reflects concerns that the integration with WebMD may take a back seat to current negotiations, though contractually nothing changes with the change of ownership at Yahoo!,” Goldman Sachs wrote in a research note to clients.
Under the pact, Yahoo! agreed to supply both search and display ads on WebMD’s health-related sites, including WebMD Health, MedicineNet and RxList. WebMD also got the option to show ads to WebMD users who visit Yahoo!’s properties.
The deal was seen as a minor victory for Yahoo!, which managed to replace archrival Google as the supplier of search ads on WebMD’s sites.
A Yahoo! spokesman declined to comment.