Steve Case's Revolution Health to lay off another 35 to 45, seek bailout merger

Following last month's layoffs, Revolution Health, the healthcare-transforming startup started by former AOL CEO Steve Case, will shrink yet more by the end of this month, a tipster tells us:

Now rumors have it that while the upper management is desperately seeking to merge with another player in this space to help stop their cash hemorrhaging (Healthline, HealthCentral and Waterfront are all leading candidates), they'll have to push out another set of layoffs on the quickly-shrinking company. My contacts suggest the next set of layoffs will occur by month's end and be in the 35 - 45 person range, bringing the company down to a 140-person business (from its high of 250+).

The save-the-company-through-acquisition plan is believable. Revolution Health's latest strategy has been to pursue traffic for traffic's sake — like last month's deal with social network Daily Strength. The company, we're told, earns most of its revenues from CarePages, a previous acquisition. Combining with other health sites to increase advertising inventory essentially turns Revolution Health into a vertical ad network. Because of the pace at which ad dollars are moving online, it's a very popular move for failing companies these days. But it's not the consumer revolution in healthcare Case promised.