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Analyst: Online Health Category Still Healthy

This story was written by Joseph Tartakoff.
Not every online sector is getting crushed in the economy. Health sites continues to thrive, even in the midst of the larger drop in online ad sales. In a report this morning on WebMD (NSDQ: WBMD), Citi Analyst Mark Mahaney notes that "we believe the online health category should be poised for double-digit revenue growth in '09." Why? Mahaney notes that there is a "flight to quality sites among Pharma advertisers" and says that "premium online health companies" like WebMD are increasingly selling long-term sponsorship ads instead of display ads. When WebMD reported its fourth-quarter earnings last month, the company said that it expected its revenue to grow 15 percent this year. Mahaney notes that that estimate, which he says is reasonable, "stands in sharp contrast" to the display-advertising outlook at other companies, including Yahoo.

By Joseph Tartakoff