Excerpt from our One Page Annotated Wall Street Journal Summary (get it e-mailed to you every morning by signing up here):
Web Site Is a Prelude To Glaxo's OTC Weight-Loss Pill
Summary: GlaxoSmithKline PLC has launched a weight-loss website, QuestionEverything.com, as a prelude to release of its new over-the-counter weight-loss pill Alli. Alli has not yet received FDA approval; if it does, it will be the first FDA-approved over-the-counter diet pill available in the US. Glaxo's new web site contains articles about dieting and weight-loss as well as recipes, quizzes and discussion boards. To participate in discussions, users have to register, providing their first name, email address, date of birth, ZIP code and ethnic background. Glaxo says it may use the information for market research and promoting its products. The new web site competes with other major online diet web sites, including those from Jenny Craig, Weight Watchers, the Zone Diet, the South Beach Diet. Sanofi-Aventis (NYSE:SNY) has not launched its own web site for its obesity drug Acomplia, which is also pending FDA approval.
Comment on related stocks/ETFs: This story has significant ramifications for the internet industry and individual stocks. Gathering consumer data online, marketing to web users and owning targeted advertising inventory are now sufficiently valuable that large consumer-oriented companies like Glaxo (NYSE:GSK) are willing to launch their own web sites. Specifically, as the online advertising market grows and the price of pay-per-click ads continues to climb, the launch and marketing of a new web site becomes cost effective. (The key challenge will be to convince users that they are unbiased.) Specifically in this case: incrementally negative for competitors eDiets (OTC:DIET) and Weight Watchers International (NYSE:WTW). Glaxo's decision to gather its own user data via launch of its own web site sets a negative precedent for online survey company Greenfield Online (SRVY). More generally: the creation of wholly-owned web sites to take ownership of ad inventory is incrementally negative for content portals like Yahoo (YHOO) and 'Net advertising firms like Google (NASDAQ:GOOG) and ValueClick (VCLK).