WebMD (NASDAQ:HLTH) reported its second-quarter earnings yesterday, announcing $0.09 and missing the consensus $0.10 estimate. The company slightly beat revenue estimates, reporting $281.9 million -- an increase of 21% over last year's second quarter.

When you think of WebMD, you probably think of its website, which allows people to look up medical topics and "manage their own health care," as the company puts it. Chances are you know someone who has benefited from using the site. However, WebMD actually has four main divisions, and portal services, its website division, accounts for only about 10% of the company's revenue.

The company's three other divisions provide various office management, data exchange, and training for medical practices. These are the divisions that generate the sales and income for the company, with the transactions services unit accounting for about 60% of sales.

The stock has had a rough go at it over the last few years. It peaked at a little more than $12 a year ago, and it has worked its way lower since. Every uptrend for the stock seemed to correlate with uptrends for the Nasdaq.

To determine whether or not to buy this stock, first separate the way the website helps people from the company's potential investment merits. If we try to glean from the numbers what the stock's potential is, then we get a mixed picture. The valuation metrics and management efficiency numbers aren't so hot. The company trails behind companies such as McKesson (NYSE:MCK) and NDCHealth (NYSE:NDC) when it comes to P/E, revenue growth, and return on equity.

Looking forward, earnings are expected to increase 28% in 2005 vs. 2004 and average 20% over the next five years. The stock is only trading at 13.5 times the 2005 estimate and has $1.43 per share in cash. All good stuff.

While there are some positives, it is not clear to me what will give the stock the chance to outperform the market or the Internet group. Perhaps that is what management was wondering when it disclosed that it will explore strategic alternatives for the portal segment. That could be the thing that moves the stock decisively.

Fool contributor Roger Nusbaum is an investment manager and wildland firefighter in Prescott, Ariz. At press time, neither he nor his clients owned any of the stocks mentioned.