Healthcare portal WebMd, Inc., and sporting goods e-tailer Global Sports, Inc., announced today that they have joined forces to create a sports medicine and fitness e-commerce channel.
The deal will leverage WebMD’s relevant content with Global Sports’ e-commerce sporting goods infrastructure, which includes more than 200 brick-and-mortar locations and an extensive line of sports and fitness-related products and accessories. One of Global Sports’ retail chains, The Sports Authority, is expected to provide WebMD with access to 50 million customers.
Promote Online Sporting Goods
Global Sports and The SportsAuthority.com will build the health and fitness e-commerce store at WebMD. The site will include customized user preferences, buying, warehousing, shipping and billing.
WebMD committed $50 million in advertising in order to drive traffic to the new commerce channel. It will also use its strategic relationships with MSN, Lycos, Excite, Readers Digest and CNN to beef up traffic.
Terms Of The Deal
Global Sports, through its alliance with TheSportsAuthority.com, will keep track of all transactions made on the new heath and fitness e-commerce site and then pay WebMD an undisclosed share of the generated revenue. In exchange, WebMD has agreed to acquire 250,000 shares of Global Sports stock at the current market price — representing about 1 percent ownership in the company.
Additionally, WebMD said that it will purchase at least $1 million of merchandise from Global Sports over the next 18 months.
“This long-term alliance with Global Sports and The Sports Authority further demonstrates WebMD’s commitment to provide consumers a complete end-to-end, full-circle solution for their healthcare and fitness needs,” said Jeff Arnold, WebMD’s chairman and chief executive officer. “We are creating an entirely new approach of contextual commerce by linking relevant information with the resources and reach of traditional retailers.”
Third-Party Advice Included
In addition to the sports medicine and fitness content that WebMD already provides to consumers and physicians, the American Sports Medicine Institute has agreed to provide third-party information on The Sports Authority’s product line to help consumers make more informed purchases.
The consensus among industry observers is that the alliance between WebMD and Global Sports makes sense — especially in light of the surge in popularity of extreme sports. These analysts point out that the marriage of sports medicine and athletic equipment on the site should boost both segments.
Founded in 1998, Atlanta, Georgia-based WebMD offers healthcare information for both physicians and consumers via the Internet.
WebMD and Healtheon (Nasdaq: HLTH) agreed in May to merge to form Healtheon/WebMD.
About Global Sports
Global Sports (Nasdaq: GSPT) operates the Internet businesses of leading sporting goods retailers under long-term exclusive agreements. These agreements include The Sports Authority, The Athlete’s Foot and Sport Chalet.
SOFTBANK Capital Partners LP invested $80 million in Global Sports on July 26, 1999.