These tests are typically conducted one at a time, under the supervision of a physician, and the patients are usually already afflicted or have a family history of or ethnic proclivity to a disease. In contrast, a new wave of companies has begun providing testing on genes associated with diseases directly to consumers. One pioneer is DNA Direct, founded in 2003 by Ryan Phelan, a medical-information entrepreneur who developed an early internet site that became an important part of WebMD. DNA Direct offers 12 online tests aimed at clients who have some indication they might contract a disease. Costs range from $199 for simpler tests to $3,456 for a more complicated panel; the fees cover phone access to genetic counselors.

23andMe is planning to test for perhaps dozens of genealogical factors, genetic markers for disease, and other traits that make you you. The company has not yet revealed if it will offer genetic counseling.

Some analysts predict that the genetic-testing market 23andMe is entering could be worth a staggering $12.5 billion by 2009. Naturally, this has attracted the interest of Web entrepreneurs. They see an industry that is largely unregulated (so far) and costs only a few million dollars to enter—the price of a few brilliant programmers, a website, and marketing—and are betting that people will pay to test their own DNA directly. One indication of the potential market is that online medical-information companies are starting to make real profits. WebMD, for instance, attracts 40 million users a month and expects to net more than $30 million this year, mostly from ad sales. “I’m convinced there is an early-adopter market here,” says Sue Siegel, former president of Affymetrix and now a venture capitalist at Mohr Davidow. “Millions of people are used to getting health-care information online.”

The big question is whether healthy customers will pay $2,000 for gene tests. “Someone needs to be the Quicken of health care,” argues one biotech insider. “This is not for the faint of heart. It will be competitive. You also have the regulatory factor, which is an unknown, and much of this still needs to be validated in the clinic.”

Indeed, many longtime biotech investors who are much closer to the science remain unconvinced. “I tend to be more on the skeptical side for a genomics consumer play because, by and large, the information is not useful to the individual,” says Doug Fambrough of Oxford Bioscience Partners, a biotech venture capital firm headquartered in Boston. “First of all, the information is hard to understand for anyone who is not a trained molecular biologist. It has to be boiled down. Also, the science has not yet arrived. We can tell a single trait here and there, but what people really want to know is how this affects their life. We can’t yet make accurate predictions about this.” Until the science improves, Fambrough thinks that the service will merely capitalize on the vanity of the more affluent. The big market, he says, is still with hospitals and physicians. “To make money, you have to tap into the medical market, and you have to get insurers to pay for it. If you have a medical test for everyone, this is worth billions.”

Many physicians and ethicists are also uncomfortable with the idea of websites delivering genetic results directly to consumers, especially for diseases that have no cure. “I don’t think that patients should be told they have a gene for Alzheimer’s online, or even over the phone,” says Josh Adler, an internist and the medical director of ambulatory care at the University of California at San Francisco. Currently, Alzheimer’s is incurable and largely untreatable. “Doctors should be telling patients this sort of information,” Adler says.

“This should not be taken lightly,” agrees Jonathan Rothberg, co-founder of the gene-sequencing company Raindance Technologies and a geneticist whose previous company, 454 Life Sciences, sequenced the genome of famed geneticist James Watson. Rothberg says he’s a fan of online gene services but cautions that they need to be used responsibly. “People shouldn’t be surfing through serious medical data. Some of it is fun—genealogy is fun. But I had a cousin who killed herself when she found out she had Huntington’s disease.”