Digital River, Inc.
) recently signed a global payments agreement with
Skullcandy is set to develop a localized e-payment program in
Europe by deploying the Digital River World Payments
As per the agreement, Digital River will provide
locally-preferred payment options for Skullcandy's online stores
in Belgium, France, Germany, Italy, Luxembourg, the Netherlands,
Spain and the UK.
Skullcandy plans to use Digital River World Payments solution
and expand its online stores further in Europe along with
delivering a user-friendly payment experience to its
Through its Digital River World Payments subsidiary, Digital
River offers a full range of payment processing services to
clients. These services include multiple payment methods, fraud
management, tax management, cloud-based billing and other payment
The company has been on the lookout for contract renewals with
its existing customers after having lost Symantec Corporation in
2010 along with forging relationships with new customers.
During the third quarter, Digital River signed many new 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.
In 2010, Digital River amended its agreement with
) and thereby extended the term of the Microsoft Operations
Digital Distribution Agreement till Oct 31, 2013.
For 2013, the company is likely to face some headwinds due to
macroeconomic conditions, client attrition and additional
necessary ramp up in investments to ensure an updated technology
infrastructure. Digital River forecasts that overall softness in
the economy, especially in Europe coupled with recent decline in
PC sales will make it challenging to post an increase in
revenues. The company saw some client attrition in 2012 and
expects the same in 2013 along with a decline in supporting
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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