Digital River, Inc.
) recently extended its long-standing relationship with 3M
Company (3M) and also signed new contracts with Haier America,
Toshiba America Information Systems and Wacom Technology Services
Using Digital River's Channel Lead Management solution, these
companies will be able to track and manage sales leads and
customer purchase data across their branded e-commerce sites, as
well as online and offline retailer, reseller, and distributor
channels. This solution from Digital River also supports consumer
and business-to-business (B2B) buyers, who are browsing and
shopping via PCs, tablets or mobile devices.
The solution is empowered to act as a one-stop online shopping
portal, enabling buyers to purchase directly from the
manufacturer, once integrated into the manufacturer's online
The solution has an embedded geolocation technology, which
allows it to generate a list of channel partners in proximity to
the buyer and provides store directions, phone numbers and also
provides real-time inventory status.
During the third quarter, Digital River signed a number of new
deals and expanded agreements. The company extended its
relationship with Siemens, Novell, Corel, Individual Software and
Grass Valley. The company also signed multi-year extensions with
two of its top clients, Trend Micro and Kaspersky. Meanwhile,
) is the company's largest customer and continues to be so.
However, earning estimates have gone down significantly after
the company reported its third quarter results, which beat
For 2013, the company will likely face some headwinds due to
macroeconomic conditions, client attrition and additional
necessary ramp up in investments to ensure an updated technology
Digital River forecasts that overall softness in the economy,
especially in Europe, coupled with recent decline in PC sales
will hamper revenue growth going forward. The company saw some
client attrition in 2012 and expects the same in 2013 along with
a decline in supporting business revenue.
We continue to maintain our long-term Neutral recommendation
on Digital River. Our recommendation is supported by a Zacks #3
Rank, which translates into a short-term rating of
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