WebMD HLTH Corp. Q4 2008 Earnings Call Transcript

| About: WebMD Health (WBMD)

WebMD HLTH Corp. (NASDAQ:WBMD)

Q4 2008 Earnings Call

February 19, 2009 4:45 pm ET

Executives

Risa Fisher - Vice President of Investor Relations.

Marty Wygod - Chairman of WebMD, Chairman, Acting CEO HLTH Corporation

Wayne Gattinella - Chief Executive Officer and President of WebMD

Mark Funston - Chief Financial Officer of HLTH and WebMD

Tony Vuolo - Chief Operating Officer of WebMD

Analysts

Mark Mahaney - Citi

Mark May – Needham & Company

Rob Kelly - Citi

Analyst for Corey Tobin - William Blair

Jennifer Watson - Goldman Sachs

Anthony Petrone - Maxim Group

Operator

Good afternoon and welcome to HLTH Corporation and WebMD HLTH Corp’s December 2008 quarterly conference call. Today’s call is being recorded.

I will now turn the call over to Risa Fisher, Vice President of Investor Relations.

Risa Fisher

Good afternoon. This is a joint conference call to discuss HLTH and WebMD's fourth quarter financial results. The earnings release issued today by HLTH is available at www.hlth.com in the Investor Relations section. The earnings release issued today by WebMD is available at www.wbmd.com also in the Investor Relations section.

The releases issued today include reconciliations between GAAP and non-GAAP financial measures to be presented in this call. The explanatory paragraph in those releases concerning forward-looking disclosures and related risks and uncertainties also apply to forward-looking disclosures made during this call including those regarding our guidance on future financial results and other projections or measures of HLTH and WebMD's future performance. Information concerning the risk and uncertainties can be found in HLTH's and WebMD's SEC filings.

I would now like to turn the call over to Marty Wygod, Chairman of WebMD and Chairman and Acting CEO of HLTH Corporation.

Marty Wygod

Thanks Risa. Good afternoon and thank you for joining us today. Joining me on the call today are Wayne Gattinella, CEO and President of WebMD; Mark Funston, CEO of HLTH and WebMD and Tony Vuolo, COO of WebMD.

Before discussing the fourth quarter results I’d like to take a moment to reflect on some of the actions that HLTH’s management team have taken over the years that have resulted in positioning the company not only to deal with the current economic downturn but to enable us to take advantage of opportunities that may arise in this business environment.

We nurtured WebMD through the Internet bubble and developed it into a stand alone public entity which is far and away the market leader in the health vertical and continues to out perform other Internet companies even in these challenging times. We have raised capital when market conditions were favorable and have made acquisitions and other business segments on advantageous terms.

When we judged that the market conditions were appropriate we divested many of these assets for a total in excess of $2.6 billion over the last 2.5 years. The valuations of certain of these businesses would have been severely challenged by the current economic environment.

We have taken advantage over time of opportunities to reduce HLTH’s outstanding shares from in excess of 350 million shares outstanding to approximately 100 million shares to date. Most recently we completed a major tender offer allowing HLTH to reduce its shares outstanding by 45%. The recently completed tender offer provided an effective way to address the interest of all HLTH shareholders by presenting a near-term liquidity to those who desired it while simultaneously providing value to HLTH’s continuing shareholders. This proportional, indirect investment in WebMD increased substantially. We will continue to evaluate our corporate structure with the goal of enhancing stockholder value as market conditions evolve.

As we enter 2009 HLTH is very well positioned financially in this uncertain economy with over $400 million in consolidated cash and investments along with an 84% majority interest in WebMD. WebMD on a stand alone basis is similarly well positioned financially with over $325 million in cash and investments.

Turning specifically to the fourth quarter we are pleased with the fourth quarter results WebMD announced today. WebMD is the recognized leader in a large and under penetrated market. WebMD’s network continues to grow rapidly with unique businesses and page views reaching record levels. WebMD’s strong brand, high quality inventory and breadth of unique services can assist our bio-pharma customers with their challenges and enabling them to more efficiently market their products.

At this time I would like to turn it over to Mark Funston and then Wayne Gattinella to review the fourth quarter financials and operating results respectively. Then we will take all questions following that.

Mark Funston

Thank you Marty. Please note that WebMD’s and HLTH’s results present WebMD’s offline professional medical reference and textbook publication business as discontinued operations in the current and prior year period reflecting the sale of that business in December 2007.

HLTH results also presents the ViPS and Porex businesses as discontinued operations in the current and prior year periods reflecting the sale of ViPS in July 2008 and the ongoing process to divest the Porex business.

I will now review WebMD’s fourth quarter results. WebMD revenue for the December 2008 quarter was $111.5 million compared to $96.6 million last year, an increase of 15%. Looking further at the revenue of 15%, advertising and sponsorship revenue which represents 76% of revenue increased 21% to $85.3 million. Private portal licensing revenue which represents 21% of revenue increased 8% to $23.2 million. Other revenue decreased by $1.6 million to $2.8 million. WebMD The Magazine continues to do well and extends our brand and drives traffic to our sites.

The decline was in our advertising revenue from our Little Blue Book publishing business.

WebMD’s adjusted EBITDA for the December 2008 quarter was $33.8 million or $0.58 per share compared to $33.1 million or $0.55 per share last year. Online services segment adjusted EBITDA was $34.1 million compared to $31.6 million last year. Publishing and other services adjusted EBITDA was a loss of $338,000 compared to a profit of $1.5 million last year. The decline in publishing adjusted EBITDA is primarily related to the lower advertising revenue in our Little Blue Book publishing business.

Our prior financial guidance for adjusted EBITDA for the fourth quarter 2008 and the resultant margins on incremental revenue anticipated the impact of significantly lower profitability in our publishing business and the shift in our product mix in our licensing business when compared to last year.

The income tax benefit for the fourth quarter is $13.4 million which includes a $21.5 million benefit relating to the reversal of a portion of WebMD’s deferred income tax valuation allowances.

In the December 2008 quarter WebMD recorded a restructuring charge of $2.9 million primarily related to the severance expenses related to the reduction of approximately 5% of the workforce. With the integration of our previously acquired businesses and efficiencies that we continue realize from our infrastructure investments WebMD took the opportunity to best align the skill sets of our employees with the needs of the business.

Non-cash stock compensation expense was $2.7 million compared to $3.8 million last year. The decrease is a result of using the accelerated vesting method on equity based compensation we granted at the time of our initial public offering which resulted in a greater portion of the expense being recognized in the first two years following the grant date.

Income from continuing operations was $33.1 million or $0.57 per share for the fourth quarter compared to $45.1 million or $0.75 per share last year. Net income was $32.9 million or $0.56 per share for the fourth quarter compared to $48.3 million or $0.81 per share last year. WebMD’s weighted average diluted share count included computing net income and adjusted EBITDA for diluted share for the quarter was $58.4 million.

Operating cash flows from continuing operations was $22.2 million for the December 2008 quarter and $102.9 million for the full year 2008. As we have stated on prior calls, quarterly operating cash flow can be impacted by the timing of the cut off of compensation accruals, other expense accruals, the billing and collection of receivables from our customers and reimbursements to HLTH in relation to the quarter’s end.

Capital expenditures were $9.2 million for the December 2008 quarter and $24.3 million for the full year. Significant non-operating uses of cash during the quarter included $15.6 million primarily for the repurchase of 641,000 shares of WebMD common stock from the former owners of Subimo LLC which was acquired by WebMD in December 2006 and the purchase of a minority investment in the form of preferred stock of Marketing Technology Solutions of approximately $6.5 million.

WebMD has $325.2 million in cash and investments at December 31, 2008 including student loan backed auction rate securities with a fair value of $133.6 million. These auction rate securities have a base amount of $164.8 million.

Turning now to HLTH’s consolidated financial results. As I mentioned earlier, HLTH’s Porex and ViPS businesses are reflected as discontinued operations in the current and prior period. HLTH consolidated revenue for the December 2008 quarter was $111.5 million compared to $96.6 million in the prior year, an increase of 15%. Adjusted EBITDA was $29.3 million in the December 2008 quarter compared to $27.4 million in the prior year, an increase of 7%. In addition to the adjusted EBITDA from WebMD segments, adjusted EBITDA on a consolidated basis also includes HLTH’s corporate expense which for the December 2008 quarter was $4.5 million compared to $5.6 million a year ago reflecting HLTH’s cost reduction efforts.

HLTH’s consolidated interest income for the quarter was $5.9 million compared with $11.4 million in the prior year reflecting lower rates earned on higher invested balances. HLTH consolidated interest expense was $4.6 million in both the current and prior year quarters. HLTH’s consolidate income tax benefit from continuing operations for the fourth quarter was $4.4 million. Also included in the P&L during the quarter was approximately $800,000 of residual advisory expenses we incurred related to the terminated WebMD/HLTH merger and a restructuring charge of $7.4 million. The restructuring charge includes the severance expense of HLTH, insurance premiums primarily related to extended coverage on divested businesses and a $2.9 million restructuring charge discussed previously for WebMD.

HLTH consolidate operating income from continuing operations for the fourth quarter was $8.8 million or $0.06 per share. HLTH consolidated income from discontinued operations was $0.3 million. Income from discontinued operations for the December quarter includes a charge of $12.1 million reflecting an increase in the estimate of HLTH’s indemnification obligations for the defense costs of the eight former officers and directors of Emdeon Practice Services, a former subsidiary of HLTH which was divested in 2006. This charge was offset by the results of operations of Porex whose revenue and adjusted EBITDA in the fourth quarter was relatively consistent with the prior year as well as a tax benefit to discontinued operations.

HLTH consolidated net income was $9.1 million or $0.06 per share. At December 31, 2008 HLTH had approximately $918 million in cash and investments of which $325 million is attributable to WebMD. These amounts include the fair value investments in student loan backed auction rate securities totaling $286.6 million of which $133.6 million is attributable to WebMD. As previously reported, HLTH and WebMD each entered into a line of credit from Citigroup Global Markets with recourse only to their ARS holdings.

These lines of credit allow HLTH and WebMD to borrow up to 75% of the face amount of their ARS holdings until May 2009. The face value of the ARS held by HLTH was $355 million as of December 31, 2008 of which $164.8 million was attributable to WebMD. To date no borrowings by HLTH or by WebMD have been made under these facilities. Both HLTH and WebMD have classified their investments in auction rate securities as long-term assets as of December 31, 2008 as an active market has not yet developed for these types of investments.

Finally, as Marty mentioned earlier, HLTH completed a tender offer during the fourth quarter resulting in the repurchase of 83.7 million common shares for $8.80 per share. The aggregate cost of the tender offer was $737.3 million. As of December 31, 2008, HLTH had 101.4 million common shares outstanding.

Turning to financial guidance, today we are reaffirming the WebMD guidance for 2009 provided on October 30, 2008. We expect revenue of $420-450 million, an increase of 10-18% and adjusted EBITDA to be $107-122 million, an increase of 11-26% compared to 2008. Adjusted EBITDA as a percentage of revenues is expected to be approximately 25.5-27% in 2009. Income from continuing operations and net income for 2009 is expected to be $30-43 million.

Looking specifically at the first quarter of 2009, we expect WebMD revenue to be in the range of $90-92 million and adjusted EBITDA margin to be approximately 19%. These amounts represent growth rates at the lower end of the annual financial guidance range and contemplate approximately 15% growth in advertising and sponsorship revenue and 4% growth in licensing revenue. Regarding HLTH, in addition to the WebMD segment results I just outlined, HLTH expects its corporate segment expenses to be approximately $14-15 million in 2009.

Schedules summarizing WebMD’s and HLTH’s financial guidance as well as the reconciliation between GAAP and non-GAAP financial measures are attached to the respective press releases issued today.

I’d now like to turn it over to Wayne to discuss WebMD’s operating results in more detail.

Wayne Gattinella

Thank you Mark. Our fourth quarter results confirm WebMD’s leadership in what we all know to be a challenging business environment. Overall revenue grew by 15% and our online advertising revenue which represented 76% of the total revenue in the quarter increased by 21%.

In terms of our fourth quarter performance we achieved slightly higher revenue than was anticipated in our most recent guidance in part the result of a pick up in incremental media during the quarter and in part the result of a few clients who accelerated the launch of their programs that were originally scheduled to launch in early 2009.

The external and internal challenges that large pharmaceutical companies face today are driving the need to more aggressively shift their more traditional channel strategies online. We believe WebMD is in a unique position to benefit the most as our bio-pharma customers are reducing their detailed sales forces and cutting direct to consumer marketing spend in print and television. Even though their total promotional spending in general is coming down, WebMD is benefiting as they are shifting more marketing dollars online.

We are also continuing to see our largest pharmaceutical and consumer packaged goods customers move away from low cost, low quality ad networks and consolidate their spending with fewer high impact, branded media properties such as WebMD. Traffic to the WebMD health network during the quarter reached a record 54 million unique users per month, an increase of 21% versus the same period a year ago and our page views during the quarter grew by 30% to nearly 1.3 million.

More than 98% of our page views in the fourth quarter were generated on health sites that are wholly owned and operated by WebMD where WebMD is in full control of the programming and pricing of the inventory. Once again this quarter our traffic acquisition costs were near zero as we continue to build our audience organically.

WebMD continues to benefit as the most recognized and most frequently searched health term on the Internet. Medscape is the leading source of medical information for physicians and our reach has exceeded 1.5 million monthly physician visits to our professional site this past quarter. Online medical education on our professional sites reached a record 1.5 million programs during the quarter for a total of 5.2 million completed CE programs for the year 2008, an increase of 68% over the prior year.

As online medical education is rapidly replacing the traditional sources of medical education such as medical meetings and face-to-face events, Medscape is delivering on both the needs of physicians and sponsors as well with a wide range of online educational programs.

Physician Connect, our professional community offering, continued to grow rapidly this quarter. More than 100,000 physicians have now registered to securely engage with one another on Medscape on both clinical and non-clinical topics relevant to the practice of medicine. We continue to also focus on enhancing the overall user experience to create higher levels of engagement and reasons to visit our site more often.

We have significantly expanded the use of multi-media, personalization and community in our consumer and professional sites which not only enhances the user experience but it also creates valuable new sponsorship opportunities and inventory. Our health and wellness offerings are an important area of incremental opportunity. In December we launched a new Healthy Eating and Diet Center integrating new levels of content and expert guided communities with a comprehensive set of personalized food and fitness tools.

Also in December we announced an important new programming partnership with the FDA. This powerful collaboration supports a new FDA center on WebMD which delivers updated safety information on food, cosmetics and medicine as well as related WebMD content and links on the FDA’s consumer site. We are proud to be the first commercial organization that the FDA has aligned with to provide consumers with valuable public health and safety information.

Finally, in the fourth quarter we launched our first set of consumer mobile applications on Apple iPhone and in just the first three months we have already seen over 350,000 downloads of our mobile version of the WebMD Symptom Checker and Treatment Information. We expect to expand our mobile content to both the consumer and physician markets in 2009.

Turning now to the private portals market, at the end of the fourth quarter our installed base of companies that license the WebMD private portal platform totaled 434 organizations compared to 117 a year ago. We also have approximately 140 additional customers who purchase our stand alone health decision support services. During the quarter we implemented the WebMD Health and Benefits Platform for new clients that include help Hewlett Packard, Ohio State University, The International Union of Operating Engineers and Blue Cross/Blue Shield of North Carolina.

Our 2009 guidance reflects the fact that the growth in new customers for our private portal services will be offset by the downsizing or perhaps the loss of current customers whose businesses have been severely impacted by the economy. While the short-term outlook in the private portal business is impacted, this does not change our long-term view of the market opportunity in the employer and payer markets. Companies are clearly recognizing the value that personalized health information can play in better managing the health and costs of care for their employees and plan members.

There is a heightened level of interest in the value of personal health information especially with the new administration and the Healthcare Stimulus Appropriation. WebMD’s Health and Benefits Platform services including our Personal Health Records and Preventative Care services are proven ways to improve healthy outcomes and make healthcare more accessible and efficient and therefore more affordable for American families.

In summary, while we are certainly not immune to the challenges of the present economic downturn the size and breadth of the overall market opportunity for WebMD remains unchanged. In the long-term we remain optimistic that WebMD’s advertising growth will be far less impacted by the broader economic issues than in other market sectors. Our pharma customer products have a limited patent life and they don’t have the luxury of delaying their marketing spend until the economy improves. The strength of our brand and the unique quality of our users clearly differentiates us in the market today and is proving to be the foundation necessary for success.

We will continue to invest in our franchise, our infrastructure and in our people as we feel confident in our ability to deliver strong returns for shareholders in the long run. Operator at this time we would like to open it up for questions please.

Question-and-Answer Session

Operator

(Operator Instructions) The first question comes from the line of Mark Mahaney – Citi.

Mark Mahaney - Citi

Could you give us some detail on the gross margin trends? Typically gross margins have been rising year-over-year consistently for WebMD. They didn’t do that in the December quarter. Is there a comp issue there? How should we think about gross margin trends going forward? If I could also follow-up, how do we think of the linearity of advertising revenue through 2009? What would be the reason why advertising revenue growth could accelerate as we go through the year? The comps seem pretty neutral or even throughout 2008.

Mark Funston

As it relates to your question on the margins, our fourth quarter guidance did anticipate we would be impacted by the effect of lower advertising revenues in our Little Blue Book Publishing business as well as the shift in revenue mix in our private portal lower margin coaching revenue. However, if you do look at our incremental margin sequentially from Q3 to Q4 we did see incremental margins of 60% from Q3 to Q4. As far as the margin expansion in our 2009 guidance it does reflect approximately 50-150 basis points of expansion in 2009.

Operator

The next question comes from Mark May – Needham & Company.

Mark May – Needham & Company

I was also hoping to break the rule and ask two questions. The first one on visibility in your ad and sponsorship revenue, maybe if you could generally give us an idea of how much of your projected ad inventory do you have contractually sold kind of one month out, three months out and six months out? Then I have one follow-up please.

Wayne Gattinella

I think as you know our visibility to the following sequential quarter is pretty good. The following quarter we think is pretty reasonable. Of course the quarters beyond that we still have room to go from a sales standpoint. As we commented, starting in the third quarter we started to see our clients return to longer term contracting as we had seen in prior years as they began to make advanced commitments for 2009 back in the September quarter which certainly bodes well in the long-term as we are building the pipeline and ultimately the backlog of longer term strategic sponsorship.

From an ad inventory standpoint we really try to stay at least one year ahead of market needs. So just from a page view inventory point of view our goal is to try to always stay at least one year ahead of where we believe business needs to be so we aren’t bouncing up against the ceiling if you will.

Mark May – Needham & Company

My follow-up is I think 75-80% of your revenue comes from advertising. Advertising like products. Most media businesses have very high incremental margins particularly when revenues are growing and particularly in your case when your customer acquisition costs are so low. But when I look at the EBITDA margin trends in recent quarters and in the guidance you have it looks as though EBITDA margins are not expanding meaningfully and kind of are around the 20% level on a blended basis and they jump around quarterly. Is 20% kind of…why is that? Why do the incremental margins seem to be not expanding much and is 20% kind of a reasonable number to expect over a long term?

Mark Funston

As I said in response to the first question we were impacted and have been impacted by a shift in mix in our licensing revenue towards our lower revenue in our lower margin coaching business as well as the decline in our advertising revenue from our Little Blue Book publishing business. As far as sort of the expectations going forward our guidance reflects approximately a range of 30-40% margin on the incremental revenue from 2008 to 2009.

Mark May – Needham & Company

That is if you strip out the impact of the those couple of items you just mentioned?

Mark Funston

No, that includes the impact of those. We have factored that into our guidance for next year.

Mark May – Needham & Company

Does this become such a small portion of the business it will have less impact on margins going forward?

Mark Funston

We were seeing the same sort of trend in 2008 so it has less of an impact year-over-year.

Operator

The next question comes from Rob Kelly – Citi.

Rob Kelly - Citi

In today’s uncertain business climate with so many companies not giving guidance of any kind I wonder if you could share with us the factors that contribute to your confidence in your guidance figures for 2009?

Wayne Gattinella

We certainly became more confident as we finished the third quarter and entered into the fourth quarter and started to see the fact that pharma was both staying with a pretty strong marketing commitment in the consumer and professional side albeit changing more of that mix to online. We again have begun to contract longer term strategic deals with most of our major bio-pharma clients that gives us not only stronger pricing and just overall growth in deal size but it also gives us better visibility to the recurring revenues those deals represent in the long-term.

So, again as we look towards 2009 we have reaffirmed the original guidance we issued in the advertising market somewhere between 15-25% top line growth fueled by both the professional and consumer penetration of our largest customers.

Operator

The next question comes from Corey Tobin - William Blair.

Analyst for Corey Tobin - William Blair

Wayne I want to hit a little bit high level on the professional portal. There is an argument that can be made there is a counter-cyclical dynamic and I think you were alluding to it in terms of traditional meetings and conferences and about economy. I’m wondering to what extent you have quantified the number of potential hours of CME that might be available to you incrementally that weren’t there last year because of the economy?

Wayne Gattinella

I couldn’t give you the exact number on that but I do know that in December 2007 which was the last year the data is available on, online CME represented more than 25% of all continuing medical education for doctors and we represented more than 60% of that volume. We know that attendance in the traditional, face-to-face medical meetings has declined significantly and we certainly know that physicians themselves are looking for easier, faster ways to participate in medical education than they have in the past.

You can see in the numbers as we exceeded more than 5 million completed medical education programs on Medscape in 2008, which is an increase of greater than 2 million programs from the prior year. So there is still a lot of growth to go. Medical education plays an important part in driving traffic to Medscape and to the extent that we also provide sponsorship of certain medical education programs it is certainly an important revenue component of our business as well.

Analyst for Corey Tobin - William Blair

Do you have a sense of what percentage of the non-online CME requires travel or has required travel in the past?

Wayne Gattinella

You have different forums. Some of it required travel to the extent it was a national meeting but there are a lot of other formats and venues that have been used in the past that are under scrutiny and pressure on an ongoing basis. So the so-called dinner meetings whereby doctors would be invited just to a local restaurant for a nice dinner even perhaps with their spouse in return for watching a ½ hour PowerPoint in many cases are no longer allowed. So it is not only a convenience factor but from a regulatory standpoint a lot of those practices that really were allowable in the past are in fact looked at very differently today.

Analyst for Corey Tobin - William Blair

One last one if I could on the mobile applications, is there any appetite to more specifically target physicians with mobile applications? Does the company have any appetite to maybe look into other mobile applications such as e-prescribing or other similar opportunities?

Wayne Gattinella

There is no limit to what we believe the opportunity is here. We are focused very keenly on both consumer mobile applications which are really still emerging from a behavioral standpoint and very importantly physician mobile applications which has been a little more established and we know in fact doctors are using hand held devices for reference and prescribing content. Both of those areas will be very important to us.

Operator

The next question comes from Jennifer Watson - Goldman Sachs.

Jennifer Watson - Goldman Sachs

First, on the receivables we saw they picked up about 9% year-over-year and were up decently sequentially which typically is the trend but can you comment on the year-over-year growth and if you are seeing payments a little bit later?

Wayne Gattinella

No, that is really just the timing of our billing. Our DSO’s have been consistent.

Jennifer Watson - Goldman Sachs

In terms of pharmaceutical companies and their thoughts on network TV do you see them moving away from that for a reason because it has been accepted in the past and so if we have CPM declines and CRE do you think the pharmaceutical companies will still be interested in network TV spots or is it just a matter they feel the online medium is a better medium to reach their potential consumers?

Mark Funston

I think there are several things going on. I know when the 2008 numbers come out you will see a reduction, that there was a reduction in DTC spend on television. The anticipation is that will continue to decline in 2009 in large part because the efficiencies of television as compared to online marketing is it is significantly more expensive with a much tighter cost focus on their marketing I know there is also therefore a tighter view in terms of ROI that is driven by that spend.

We also know that DTC television has been under pretty tight review down in Washington as they don’t look too kindly at sort of the effectiveness of a 30 second television ad as a reasonable way of disclosing all of the benefits as well as risks associated with a prescription drug product. There has been a growing social and even potential regulatory kind of backlash against that form of marketing on a go forward basis and I think you have seen the industry start to cut back in response to that challenge.

Operator

The next question comes from Anthony Petrone - Maxim Group.

Anthony Petrone - Maxim Group

To begin with you mentioned Wayne coming off patent for some of the large pharma vertical. If we look it seems that 2011 and 2012 is a key timeframe there. Can you speak about the length of some of the campaigns that bio-pharma is signing on for? Are we surpassing that timeframe or are we 12 months out or are we going beyond 12 to 24 or 36?

Wayne Gattinella

For the most part longer term programs are 12 months on the outside. We do have some programs that extend that length but I would say for the most part you are looking at between 6 and most times 12 months. In terms of patent expires and you know what the schedules are for the next couple of years. That is certainly anticipated in our gross numbers but in reality there is not even a single company that represents 5% of our revenues yet alone a single brand. Any impact coming from any one particular patent expired wouldn’t have material impact on our business.

Anthony Petrone - Maxim Group

A follow-up just to the 2009 guidance when we look at the delta $420-450 how much I guess if WebMD does rending campaigns where you maybe are doing one offs for smaller customers?

Wayne Gattinella

I’m not sure what you mean by rending campaigns. We hold pretty true to our pricing. We certainly create advantages for more significant buys than smaller buys but we have for small buys we have a rate card that is out there that is published. It is pretty well known. So remnant doesn’t necessarily play a part of our strategy. We segment our inventory to be able to really leverage the quality of our user base in a particular area that a product marketer is interested in and certainly that has been an important part of our value proposition and strategy going forward.

Operator

I show no further questions at this time. (Operator Instructions) Thank you for joining us today. You may now disconnect.

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