True, the spectacular rise and fall of Drkoop.com over the last year has been often held up as Exhibit A in the case of the bursting dot-com bubble. But it's doubtful that the story has been told as fully, or as entertainingly, as it is in "Dr. Koop and the Greed Disease" in the May 29 issue of Fortune.
"If any one stock epitomizes the excesses of 1999 and early 2000, it would have to be Drkoop.com," wrote Nelson Schwartz. The consumer health-information Web site was too young to go public and had made less than $1.5 million in revenues, yet it was "bid up to a ridiculous $1.3 billion in market value," he also wrote. It just as quickly lost over 90 percent of its value. "Finding someone who admits to once owning this stock is like finding someone who admits to voting for Ross Perot. It's a dot-com leper," said Paul Cook, manager of the Munder NetNet fund.
None of the company's top officers, including Dr. C. Everett Koop, or its backers at Bear Stearns were willing to comment. Schwartz reported fairly without their input. He called the Web site impressive in its content and design, and noted that Bear Stearns "simply had the bad luck to win" the deal to fund the venture.
That's the good news. The bad news is practically everything else about the site and its management. The plan for revenues, which were supposed to come via advertising, e-commerce sales on the site and licensing deals, were always shaky. The managers, "not the sharpest scalpels in the bag," according to Schwartz, made disastrously bad promotion and distribution deals with AOL and Disney's Go Network. Drkoop.com insiders started dumping stock, making the stock fall even harder on the market. The upshot? Drkoop.com could win the ignominious award as the first prominent dot-com to declare bankruptcy, Schwartz thinks. "Don't expect Drkoop.com to be the last dot-com disaster, either," he concludes.
The Drkoop Deathwatch
The Industry Standard
Dr. Koop and the Greed Disease
Fortune
Soured 'E-health' Deals Seen as Symptom of Wider Malaise (Reuters)
San Jose Mercury News
