J2 Global considers divesting parts of Everyday Health

Everyday Health is the second most-visited health website in the U.S., after WebMD.

J2 Global, an internet services company, is considering selling off the less profitable parts of Everyday Health, which it acquired in December.

The acquisition of Everyday Health includes consumer sites Everyday Health and MayoClinic.org, MedPage Today for physicians, What to Expect for expectant mothers, Cambridge BioMarketing for orphan drugs, and Tea Leaves Health, which works with hospitals. J2, which owns sites like IGN and PCMag.com, spent $465 million to acquire the company, which is housed under J2's Ziff Davis digital media unit.

Everyday Health is the second most-visited health website in the U.S., after WebMD.

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“Everyday Health operates in a high-value decision-oriented verticals where we can help our audience in making informed decisions,” Hemi Zucker, CEO of J2 Global told investors during an earnings call on Thursday.

Plans to divest parts of Everyday Health's business fit into J2's “shrink-to-grow” strategy, Zucker added. “If we don't believe a certain revenue has good margin potential, we will just walk away from it and focus on the profitable parts of the business,” he said.

Those include Cambridge BioMarketing, a rare-disease agency acquired by Everyday Health in March 2015, and Tea Leaves Health, a hospital marketing firm that was acquired for $30 million in August 2015. Scott Turicchi, president and CFO of J2 Global, said Tea Leaves is “not making any money and, quite frankly, not likely to do so, because it needs to continue to be fed.”

The company also plans to reduce the combined Ziff Davis and Everyday Health workforce by 7% and consolidate two offices, both in Manhattan, to save on the cost of office space.

See also: Healthline Media receives $95 million in equity funding

“We have certain things that were duplications. We don't need two CFOs, two CEOs, two everything,” said Zucker. “We have been steadily terminating or restructuring our vendor agreement, which will add several points to the margin already now in 2017.”

Following the restructuring, the company executive said they plan to focus their growth goals on Everyday Health, MayoClinic.org, and What to Expect, which account for 80% of the health media company's business, as well as MedPage Today.

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