Health Social Networks

Well we all saw this coming in the last few months but even so it is shocking. Waterfront Media buying Revolution Health valuating the company at around $100 M, meaning all the hard work put by the top executives in the field (Steve Case, Colin Powell; Jim Barksdale, Frank Raines & Carly Fiorina) yields a $-0.50 on the $1 return… OOppppsss.

I’m having flashbacks of Mercata & Paul Allen (he also talked about a revolution back then) is it 2001 again?

How can we explain this?

Is it the falling economy? Hubris – one man trying to take over a whole vertical? Excessive acquisitions? Or maybe just the troubling fact that this market is not as big as we once thought?

DailyStrength are in financial troubles and had to cut back dramatically after failing to raise additional funds, iMedix declared they are about to close big $$$ funding about a year ago… and so many others are making disturbing noises you just can’t ignore anymore. Will my list of Health Social Networks going to be half the size in one year? Maybe less (time and long…).

Did it ever make sense to seed fund a niche social network website with $7M (DailyStrength) or even $4.5M? (WellSphere who seem to be using the money to change the UI and who they are every 3 months…). Wouldn’t it make more sense to give the entrepreneurs $1M and send them off to prove there is a business hiding somewhere around here? No wonder no one wants to invest in this market now. Hey – Steve Case lost $100M isn’t this enough ????

The only chance is in finding the business and all I see is advertising (and mostly google adsense), that can work for a small company with low overheads and a really laid back investor …. How many of these have that? if I had to bet, I’d put my money on those who raised moderate amounts and managed to gain some strength. Inspire, MDJunction and maybe Trusera (not sure about the strength part here) have the highest chance to keep their heads above water in the next 12-18 months.

Looking back at M&As in the market doesn’t explain these investments either. HealthTalk and CarePages might have done nicely, but that was Revolution at its best. Other than that not a single outstanding acquisition and if anyone here thinks they are going to be AOL’s next bebo and sell for $850M, you forgot to take your pills today.

I don’t think I ever wrote something with so many question marks before, but I guess that’s just how I feel about your market right now. Come on over everyone, there’s plenty of businesses in IPTV ;-)

Sam

You probably realized by now that I'm a big fan of the Health Social Networks gang. I'm an advocate and a strong believer, but that doesn't mean I like everything that's being done…

I don't really like iMedix. I know I'm not the first to say that and bigger bloggers have done so in the past (iMedix combines health search and community — but does neither well, iMedix: Social search that creeps me out ) but I just have to get it out of my system.

I first heard the name at the 2007 Crunchies when they were announced as Best new startup. I got to tell you a lot of heads moved at that announcement. Could it be such a wonderful company with so many fans but none the less nobody in the audience ever heard of them?? I mean the 'Best new startup' is a minor trophy at the Crunchies, but not that minor. Later that day I got the chance to listen to the entrepreneurs talk to the media. I have to say that I liked them. They seemed eager, energetic and with that 'spark' in their eyes everyone talks about. But is that enough?

Every time I log into iMedix I get the feeling that there is really nothing there.

The search results are OK and even if I let the beer get too much to my head and say it's a little better than google (it's not, but let's just play) would anyone remember to visit that site and not go for the BIG G to look for stuff??? It doesn't work like that! and that's not even the problem…..

iMedix homepage says "Members of the iMedix community help each other by sharing their experiences". That is not what I see there. Trying to get someone to talk to you is hard, you're most likely to find yourself talking to an iMedix employee, an eager teenager or just someone like you who's trying to find others who know something about his condition (which is not the info you are looking for…). There is no collective data, no shared experience and well… nothing really. Can you even compare this to a visit to DailyStrength or Medhelp? No way.

I visited the site 3 times yesterday, hours apart. On all 3 visits to the home page under “Featured Questions” (you’d think they’d be special) I got a question that was actually an email address this got my curiosity flowing and I clicked on the ‘Featured Question’ to find that the meaningful question (only an email address of someone who is probably a spammer) was answered twice by ….the same guy. Needless to say that the answers are not any better than the question. I got that at 3 out of 3 times during the day!!

Is this the activity you’d expect from the Best new startup of 2007, 10 months after voted as such??

I wasn't going to give up on my research there. After all they did win a prize. I checked them out in Alexa and Quantcast.

At first glace their alexa graph was about to change everything I thought. It's growing. Tremendously…. but hey… have you ever seen a traffic surge that looks like that? My only guess would be paid traffic. You pay - people come, budget runs out - they don't. There is nothing wrong with buying traffic. It's legal. Everyone does it and it works in many cases, provided you paid for quality traffic…. scrolling down the page (still alexa) I might have gotten a clue on the quality of the traffic. 3 Month average page views: 1.25. that's right folks – an award winning social network with 1.25 page views per visitors. DailyStrength shows 7.79, PatientsLikeMe 5.9 etc'

So we know alexa isn't always right. I checked my favorite Quantcast. The picture here is a bit different. It looks like the sites' share of visits has been going down for almost 4 months now (same as compete estimates) and not as moody as alexa shows, but the interesting part is on the right side. Quantcast has two 'related' sections on the right side (Audience Also Visits, Audience Also Searches For) each of them with 15 items/sites. I consider it highly accurate and often use it when searching for companies. Out of 30 sites and keywords listed NOT A SINGLE ONE is related to health, social networks or iMedix in general. If you do the same check for most of the sites in my Health Social Networks List the ratio is 28 out of 30. I'm not really sure what that means but I know it ain't good ;-)

Final words

The Good:

1. Eager entrepreneurs.
2. UI looks professional and friendly.
3. An amazing seed funding that enables a lot of PR.

The Bad:

1. I couldn't find any value.
2. The data on traffic monitoring sites looks unflattering.
3. The 'beta' tag. If you're live for more than a year and still consider yourself beta something is not going right.

I wish the people in iMedix the best of luck and I would truly be happy to see them thrive (as I said they do look like nice people) but for now – I think iMedix is just not going anywhere.