Profile: Digital River Inc (DRIV.O)

Digital River, Inc. (Digital River), incorporated in February 1994, provides end-to-end global cloud-commerce and marketing solutions to a range of companies in software, consumer electronics, computer games, video games and other markets. The Company’s services include design, development and hosting of online stores and shopping carts, store merchandising and optimization, order management, denied parties screening, export controls and management, tax compliance and management, fraud management, digital product delivery via download, physical product fulfillment, subscription management, online marketing including e-mail marketing, management of affiliate programs, paid search programs, payment processing services, Website optimization, Web analytics and reporting, and compact disc (CD) production and delivery. On March 2, 2011, Digital River began providing e-commerce hosting and payment processing services in connection with Microsoft Store. In January 2013, the Company sold its subsidiary CCNow, Inc. to Snorrason Holdings.

The Company also offers services designed to increase traffic to its clients Websites and the associated online stores, and to improve the sales productivity of those stores. The Company’s services include paid search advertising, search engine optimization, affiliate marketing, store optimization, multi-variant testing, Web analytic services and e-mail optimization. Additionally, through its Digital River World Payments subsidiary, it offers a range of payment processing services to clients. These services include multiple payment methods, fraud management, tax management, cloud-based billing and other payment optimization services.

Through its online affiliate network marketplace, which it calls oneNetworkDirect, it provides its clients access to a new sales channel, which can help grow their online businesses. Clients can offer any part of their product catalogs to its network of online channel partners, including online retailers and affiliates. In addition, it provides localized online content and payment methods. The Company’s clients include software, consumer electronics, computer, video game product manufacturers, online channel partners including retailers and affiliates.

Store Design, Development and Hosting

The Company offers its clients Website design services. Its e-commerce solutions are deployed quickly and implemented in a range of ways from shopping carts through merchandised online stores. The online stores the Company operates for its clients match their branding and Website design. It manages the order process through payment processing, fraud screening and fulfillment (either digital or physical) and notifies the buyer through e-mail once the transaction is completed. Transaction information is captured and stored in the Company’s database systems. It operates multiple data centers globally, which feature redundant high-speed connections to the Internet, server capacity to handle unpredictable spikes in traffic and transactions, around the clock security and monitoring, back-up electric generators and dedicated power supplies.

Store Merchandising

The Company’s technology platforms support a range of merchandising activities. This enables its clients to execute promotions, up-sell, and cross-sell activities and to feature specific products and services during any phase of the shopping process. From the home page of its clients’ online stores through the checkout and thank you pages, its solution allows clients to deliver offers.

Order Management and Fraud Screening

The Company manages all phases of a shopper’s order on its clients’ e-commerce stores. It processes payment transactions for orders placed through its technology platform and support a range of payment types, including credit cards, wire transfers, purchase orders, money orders, direct debit cards and many other payment methods both in the United States and worldwide. It also provides denied-parties screening and export controls, which are designed to ensure that persons and/or organizations appearing on government denied-parties lists are blocked from making purchases through its system.

Digital and Physical Fulfillment Services

The Company provides both digital and physical fulfillment services to its clients. It offers the clients an array of electronic delivery capabilities that enable delivery of digital products directly to customers’ computers through the Internet. Delivery is completed when a copy of the purchased digital product is made from a master generally stored on the technology platform and then downloaded to the purchaser. Optionally, buyers can, for an additional fee, request that a CD be created and shipped as a backup for their order. In addition to electronic fulfillment through download, the Company offers physical distribution services to its clients. It provides notification of product shipment to the buyer, as well as shipment tracking, order status and inventory information. It also provides a service called physical on demand (POD), which utilizes robotic systems to create a client-branded product CD and packaging materials after a POD order has been placed. It provides download services for digital products for an additional fee, which enables buyers to download the products.

Customer Service

The Company provides telephone and e-mail customer support for products sold through its platforms at the client’s option and for an additional fee. It provides assistance to buyers regarding ordering and delivery questions on an around-the-clock basis in multiple languages.

Advanced Reporting and Analytics

The Company captures and stores detailed information about visitor traffic for sales in the online stores it manages for the clients. This information is stored in its database systems where it is available for analysis and reporting. It provides clients access to a collection of standard and customizable reports through its Web analytics technology. This enables the clients to track and analyze sales, products, transactions, customer behavior and the results of marketing campaigns.

Strategic Marketing Services

The Company offers a range of marketing services designed to increase customer acquisition and improve customer retention. Through a combination of Web analytics, analytics-based statistical testing, optimization and direct marketing practices, its team develops, delivers and manages programs, such as paid search advertising, search engine optimization, affiliate marketing, store optimization and e-mail optimization on behalf of its clients. It generally charges an incremental percentage of the selling price of merchandise for sales driven by its marketing services activities.

Payment Services

The Company offers service payment provider solutions for online merchants worldwide. It offers a range of back office payment reconciliation services that result in a program for e-payments. It sells and markets these services through a direct sales channel located in offices in the United States and Europe. These services are provided either through a direct interface between the client’s commerce system and its payment services platform or through a payment card industry (PCI) compliant wrapped secure Web based payment page that is served to the client’s commerce system on a transaction by transaction basis.

The Company competes with Art Technology Group, Inc., IBM Corporation, IBM Global Services, Accenture, Inc., GSI Commerce, Inc., asknet Inc., Bertelsmann AG, CyberSource Corporation, PayPal Corp., ValueClick, Inc., aQuantive, Inc., Amazon.com, Inc., Buy.com, Inc., Network Solutions, LLC, Akamai Technologies, Inc., Yahoo!, Inc., eBay, Inc. and Hostopia.com, Inc.