1. Augustine Fou- 1 -
Dr. Augustine Fou
http://linkd.in/augustinefou
May 2013
Investment Thesis
WBMD

2. Augustine Fou- 2 -
Executive Summary
THESIS
• WebMD may experience continued “softness” despite
the uptick due to the management reshuffle after
earnings.

3. Augustine Fou- 3 -
Executive Summary
THEN
• WebMD has been the beneficiary of traditional ad dollars from pharma/healthcare
advertisers shifting to digital, because it was the “only game in town” in terms of
credible, medical information (vetted by doctors)
NOW
• Now, there are other credible sources of medical information online (e.g.
MayoClinic.com) and users’ default habits mean they start with Google to search
for medical info online, rather than go straight to WebMD.com
• As free organic traffic softens, WebMD has to buy traffic via display ads and
search ads to continue to prop up traffic in order to generate “inventory” to sell ad
impressions
• Display ad CPMs are also trending down industry-wide due to a variety of factors
including much lower cost inventory from social channels like Facebook
• WebMD’s business model relying on display ads and CPM-based pricing is out of
sync with the industry trend towards “performance” (e.g. CPC and CPA)

4. Augustine Fou- 4 -
Top 10 Medical Websites
April 2013
Source: Experian Hitwise, April 2013
WebMD.com is
only 10.5% share
of visits now

5. Augustine Fou- 5 -
Unique User Comparison
Source: Compete, April 2013 Data
Next 3
competitors
combined are
larger than
WebMD

6. Augustine Fou- 6 -
Pageview Comparison
Source: Compete, April 2013 Data
WebMD is the
only one in decline

7. Augustine Fou- 7 -
Ranking Organic Keywords
Source: iSpionage, April 2013 Data
The number of ranking organic keywords (shows up on
page 1 of results) is helping WebMD maintain site traffic.

8. Augustine Fou- 8 -
WebMD Buys Traffic
Large number of display ads driving traffic to themselves.

9. Augustine Fou- 9 -
Shifting to Lower CPM Ads
Big Portals Ad Networks Facebook
10’s of dollars 1’s of dollars 10’s of cents
Advertisers are shifting allocation to get more impressions
Large audience
Publisher/portal
has more power
Lots of long-tail
small websites
Advertiser has
more power
Massive number of
impressions
“Junk” quality and
super-low prices
CPM
0.1% 0.01% 0.001%CTR

10. Augustine Fou- 10 -
Digital Used for Performance
Source: IAB 2012 Annual Report

11. Augustine Fou- 11 -
Related Articles
Meet the Most Suspect Publishers on the Web
By: Mike Shields, March 19, 2013
State of Display Ad Market 2013
By: Augustine Fou, April 17, 2013
Botnet Traffic Clicks Cost Advertisers Millions in Waste
By: Augustine Fou, April 29, 2013
Future of Advertising
By: Augustine Fou, March 15, 2013
Augustine Fou- 11 -

12. Augustine Fou- 12 -
Dr. Augustine Fou – Digital Consigliere
“I advise clients on innovating their
business to stay ahead of trends and
reduce their reliance on single forms of
revenue (e.g. display ads in the case of
WebMD).”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
@acfou
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou

13. Augustine Fou- 13 -
WebMD.com Website Traffic
Despite user and visit growth but the all-important metric
of pageviews continue to decline slightly.
Source: Compete, April 2013 Data

14. Augustine Fou- 14 -
WebMD.com User Characteristics
Average stay, visits per person and pages per visit have
all been consistently trending down
Source: Compete, April 2013 Data