28th June 2007

Is the ehealth sector about to get the Dot Com treatment? Certainly EDventures, Esther Dyson’s investment vehicle, has been putting a lot of effort, and a substantial amount of money, into online healthcare companies recently. EDventures has been active in the high technology sector for twenty years and is currently involved with Voxiva and 23andme. Until February this year it was also part owner of Medstory, which is now part of Microsoft’s Health Solutions Group. A closer look at some of these companies may provide an insight into the direction the ehealth market is moving.

Medstory is a healthcare orientated Internet search technology company. It was formed by Alain Rappaport who was at one time president of Neuron Data - an "expert system" company whose product detects credit card fraud. Medstory’s service is built on a similar intelligent software platform that links healthcare related web pages. For example the software will link an article describing a disease to another article on drugs or therapies.

Commenting on the transfer of Medstory to Microsoft Dyson implied that the technology that drives it could be used for more than just searching and has potential as a monitoring tool. She sees a person’s health profile being defined within Medstory and this definition including a genomic profile alongside a patient health record.

Interestingly one potential source for the genomic profile Dyson is talking about here could come from another company EDventures has an interest in, 23andme. This company claims that its goal is to connect a person to the 23 paired volumes of their own genetic blueprint - plus their mitochondrial DNA – and in so doing provide users with an insight into their ancestry, genealogy, and inherited traits. Recently Google put $3.9 million into 23andme.

Coincidently, Esther Dyson funded another venture, Voxiva, using proceeds from the sale of some of her Google pre-IPO stock. Voxiva is a mobile phone based ehealth and disease management service that is used by government health departments and NGOs to manage major health programs such as HIV/AIDS, Malaria or Maternal Health. It also carries out some sophisticated real time data mining and analysis of non healthcare related information - such as school attendance records - in an attempt to detect early indicators of an epidemic.

It is important not to read too much into the fact that EDventures has managed to collect together some of the key components required to build a modern online healthcare service. Silicon valley entrepreneurs are notorious for getting too many brightly coloured building bricks out of the toy box then feeling obliged to build something useful with them – and just because the result looks like an aeroplane does not necessarily mean it is going fly.

Motivations for recent deals are diverse. A large proportion of searches on the Internet are healthcare related and so Microsoft’s purchase of Medstory could provide it with a competitive advantage over Google. Google’s interest in 23andme fits well with the philanthropic stance it has taken with Google.org (‘enable the world to better predict, prevent and eradicate communicable diseases through better access to and use of information.’). As well, one of Google’s founders, Sergey Brin recently married Anne Wojcicki, who is one of the founders of 23andme. EDVentures along with other venture companies, and Google itself, have put up to $10 million into 23andMe and according to the New York Times $2.6 million of this will be used to repay a personal loan Brin made to the company.

However, beyond the battle between Microsoft and Google for dominance of the Internet search market, extravagant wedding presents and efforts by high-tech entrepreneurs to save the world, there are implications here for the healthcare sector. The Web has already impacted on the doctor patient relationship with GPs having to come to terms with patients who have ‘Googled’ their symptoms. A patient may know more about their condition than their GP - who only spent thirty minutes reading up about the disease three decades earlier while at medical school. If patients gain access to genetic profiling tools supported by intelligent medical search software, doctors will face the kind of upheaval that professionals in engineering and the financial services sector have been experiencing during the past two decades.

Whether EDventures stays centre stage during this online medical revolution is unclear. Successful entrepreneurs are often successful because they try out lots of new ideas in quick succession. A new pile of brightly coloured building bricks - air taxis to be precise - have recently caught Esther Dyson’s eye and, having given the medical sector something to think about, she may soon be off to disrupt the business models of regional airline companies.

Subscribe to the Wireless Healthcare free weekly newsletter