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Hyperactive Revenue Syndrome

Internet pioneer Steve Case tells Portfolio.com why he teamed up with Waterfront Media's Everydayhealth.com—and how the effort is drawing 29 million users and has become the flagship for a $100 million company.

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When Revolution Health and Waterfront Media merged a year ago, few people noticed. No surprise there—it was a small deal in a noncontroversial area of health care playing against the backdrop of a presidential campaign and an imploding economy.

But the attention is sure coming now. Everydayhealth.com, the combined company’s flagship property, has catapulted past WebMD to become the premier go-to site for consumers who want to know more about diets, diabetes, blood pressure, and all kinds of, well, everyday health issues.

According to comScore, Everyday Health is getting 29 million visitors a month, compared with 20 million for WebMD. Its principals say annual revenues are the main driver of the company's $100 million in annual revenue, and they say the company will be profitable this year. “This is an opportunity to disrupt an existing industry with new methods, and that’s my specialty,” said Steve Case, Revolution Health’s founder.

Yep—that Steve Case.

Case, of course, was the creator of AOL, which foundered horribly after it merged with Time Warner, and is struggling to regain its footing now that the merger has dissolved. Case, in contrast. doesn’t seem to have foundered at all.

Revolution, his venture capital firm, has a hefty investment in Zipcar, which gives its members access to a pool of autos. It started Revolution Money, which competes with PayPal and with conventional credit card companies (more than one million merchants have signed up, Case says). Revolution has stakes in fledgling insurance companies, in a maker of medical devices, even in retail clinics in Texas.

You have to hand it to Case—he does know how to spot and milk a trend. He recognized how badly ordinary folks needed a user-friendly way to navigate the Internet—and he founded America Online to do just that. And just about the time that free email and Web services were making the AOL business model obsolete, he sold it to Time Warner and moved on.

About four years ago he started funding health care companies. Revolution Health, one of those, was the only one aimed squarely at consumers.

He conceived of it as a website where consumers could both browse for information and store their own medical records. The electronic-storage idea never took off (despite the Obama administration’s push for digitized records, Waterfront Media has no immediate plans to revive it, other than to perhaps act as go-between for consumers and medical-records companies). But Revolution Health offered enough online information and interactive sites—for example, a social-networking site for caregivers, a compendium of blogs around specific diseases—to attract a burgeoning number of visitors.

Before long, it was encroaching heavily into Waterfront Media’s turf.

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