It was 1992 and the Internet was not yet a household word. Mayaud, a 38-year-old resident in internal medicine at Lenox Hill Hospital in Manhattan, had already set up an in-house network that allowed doctors to do literature searches and obtain information from pharmaceutical companies over the Net.

But Mayaud wanted to broaden his reach. So he established Physicians' Online, a proprietary online service that he hoped would become a resource as readily consulted by doctors as the New England Journal of Medicine. POL offered chat rooms, links to pharmaceutical companies and a specialized search engine. Within months it had revenues of $15 million and a glowing diagnosis from its executives of double that figure in a year or two. By 1996, venture capitalists were lining up to invest in what many considered a doctors' version of America Online, making it one of the country's best-financed Internet startups.

Fast-forward three years. Mayaud's vision is reality – the online health sector is thriving, with as many as 15,000 Web sites – but his company is a mere footnote in the history of cyber medicine, far from the booming success many expected. POL was acquired in November by Mediconsult.com for about $180 million in stock plus the assumption of roughly $15 million in debt.

What went wrong? POL was stuck in the same predicament as many Net entrepreneurs: right people, right place, wrong time.

"I'd say this is a story of a company with a great idea a couple of years too early,'' says David Richards, the POL chief executive who merged himself out of a job.

Edward Keaney, an e-health analyst with San Francisco-based investment bank Volpe Brown Whelan & Co., is a little more critical. "They were the first one in the market and they squandered the opportunity,'' he says.

Company boosters say it's too soon to dismiss POL's sale as a bad idea. They note that it still has 80,000 active physician members. And they say that by combining with Mediconsult, which provides online medical information to patients, it has created a stronger company, whose stock will rise in coming years.

Yet at a time when POL's less-established rivals have valuations ranging from at least $400 million dollars (Medscape) to as much as $6 billion (Healtheon/WebMD), its sale price is testament to the way that an online pioneer can be overwhelmed by a new round of competitors.

After all, only a few years ago POL had first-mover advantage – no one else was providing a free online service to doctors. "This was going to be a monopoly," Mayaud said in a telephone interview last month. Venture capitalists invested $12.9 million in the company in 1996, giving it the 10th-biggest venture round among Internet companies that year, according to PricewaterhouseCoopers.

"We look for companies that can dominate markets with potential for rapid growth," remarked Jason Fisherman of the venture firm Advent International upon making an investment in POL. "Physicians Online has established by far the largest active online community of physicians in the world, placing the company at the forefront of the information and communications revolution that will transform the delivery of health care.'' Another investor, Brad Burnham of AT&T Ventures, gushed that the company was positioned to "become the dominant information service for healthcare professionals.''

But POL's early lead turned into a burden. The company committed to a proprietary system before the Internet really took off. Thus in 1997 it had to revamp its system to fit into the new world of Internet HTML codes. While wracking up this cost, its flow of advertising dollars – its principle source of revenue – began to dry up. And then it came under fire from new, well-financed competition.

POL's revenues stopped growing and the company could not take advantage of the hot market for public offerings: Unlike new companies that had no track record, POL had several years of numbers that made it hard to paint the picture of tremendous revenue growth needed to woo investors.

"Everyone moans and groans and says that this should have been WebMD,'' mused Mayaud, referring to that company's multibillion-dollar merger with Healtheon. Still, his original investors have done quite well, he said, insisting that he didn't care that his company had been subsumed by another.

Mayaud left active management of the company a few years ago. With the closing of the Mediconsult deal, Mayaud no longer has a seat on the board of directors. He has since helped launch more than a dozen other companies. "Big deal,'' he said of POL's acquisition. "I'm busy doing other things.'' – Jonathan Rabinovitz