Copyright 1999 Plain Dealer Publishing Co.
The
Plain Dealer
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February 25, 1999 Thursday, FINAL / ALL
SECTION: BUSINESS; Pg. 1C
LENGTH: 459 words
HEADLINE:
AMAZON TO SELL DRUGS;
BOOKSELLER BUYS 46% OF DRUGSTORE
BYLINE: BLOOMBERG NEWS
DATELINE: SEATTLE
BODY:
Amazon.com, the top online bookseller, said it will enter the rapidly
growing market of selling drugs and other health-care products over the Internet
by buying 46 percent of closely held Drugstore.com.
Drugstore.com is an
Internet start-up headed by former Microsoft Corp. online executive Peter
Neupert. The Redmond, Wash., company plans to distribute over-the-counter and
prescription drugs and beauty products directly to the home. The companies
declined to say how much Amazon paid for the stake. The acquisition could help
Amazon.com in its bid to transform itself from an online merchant of books,
video and software into a major retailer. Amazon.com raised $1.25 billion
through the sale of convertible notes last month, saying it would use the
proceeds to expand into new product areas.
"This makes a lot of sense
for Amazon," said Morton Cohen, who manages about $70 million for Clarion
Capital Corp. "Pharmaceuticals look like a natural for the Internet. Who wants
to run to the drugstore?"
Drugstore.com will let customers mail in new
prescriptions, have existing ones transferred from other pharmacies or have
their doctors call them in to a toll-free number, 1-800-drugstore. Amazon's
customers can reach Drugstore's Web site by clicking on a button that will be on
the bookseller's home page.
Amazon shares fell $4.25 to $110.94, along
with a decline in the broader stock market. Earlier in the day they rose as high
as $122.19 after the companies disclosed the investment.
The
Drugstore.com startup is among a group of new Internet companies that hope to
change the way medicine is practiced by linking patients, physicians, drug
retailers and hospitals through the Internet.
Health care has emerged as
one of the hottest new areas among Internet companies in recent months.
Healtheon Corp., a company that processes health-care transactions over the
Internet, almost quadrupled on Feb. 11, its first day of trading after an
initial stock sale.
Drugstore.com estimates that the online market for
drugs, vitamins and health and beauty products is worth $150 billion annually.
It plans to begin selling merchandise tomorrow and will offer everything found
in a typical drugstore, as well as health information.
Amazon said it
will have a link to Drugstore.com on its home page starting today. The
partnership with Amazon.com is a huge boost for closely held Drugstore.com,
which has yet to start selling products over the Internet.
Drug Emporium
Inc. of Powell, Ohio, claims title as operator of the first online drugstore,
drugemporium.com, which opened 18 months ago. It sells more than 20,000 items on
the site and is licensed to fill prescriptions in 49 states. A registered
pharmacist is available to answer questions.
LOAD-DATE:
February 26, 1999 
