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Technology Stocks : DRIV (DIGITAL RIVER). Get in on internet IPO. -- Ignore unavailable to you. Want to Upgrade?

To: uthabros who wrote (3074)	11/12/2001 7:36:07 PM
From: Jon Khymn	Read Replies (1) \| Respond to of 3198

Anyone following ITRA? Thom Calandra mentioned ITRA with DRIV. In light of DRIV success, it might be worth following. Bought few shares today at under a buck. ------ cbs.marketwatch.com Two of the largest gainers, Digital River (DRIV: news, chart, profile) and SportsLine.com (SPLN: news, chart, profile), owe most of their revenue to Internet delivery of content or software. Digital River and SportsLine.com were two of the three stock choices made in this StockWatch column in late July. (See the Thom Calandra's StockWatch column.) Digital River, a Minneapolis provider of Web-based commerce services, is benefiting from an acquisitive chief executive, Joel Ronning. The shares have gained 180 percent since Aug. 6. See more on Digital River. Digital River's story may be a model for investors willing to play the lottery-ticket game. In this case, Digital River's drive toward consistent quarterly profits comes at Ronning's determined hands. A former direct-sales executive, Ronning says he'll be darned if a larger Internet company scoops his operation up for the pennies it was trading for this summer. Digital River's success, with a market cap ballooning to $340 million from $120 million in several months, may bode well for other Internet companies that deliver software applications or commerce engines. One such company, tiny Intraware (ITRA: news, chart, profile), is narrowing operating losses substantially, Chief Executive Peter Jackson says. Intraware's current quarter ends Nov. 30. The California company could achieve yearly sales of $50 million or more, with February being a cash-flow positive date. Yet Intraware's stock at 65 cents or so gives the company a market capitalization of less than $20 million.

To: uthabros who wrote (3074)	11/22/2001 11:08:23 PM
From: david james	Respond to of 3198

Digital River gets the front page of Investors Business Daily investors.com Internet & Technology Friday, November 23, 2001 Digital River Finds A Different Course BY MURRAY COLEMAN INVESTOR'S BUSINESS DAILY Gearing up to sell and buy goods online takes a lot of time and trouble. Developers estimate that it can cost $2 million to $10 million to set up a business for e-commerce. But Digital River Inc. (DRIV) is taking a different twist. The company runs e-commerce operations for corporate customers. And its results are attracting investors. Since April, Digital River shares have jumped from 3.50 to about 15. Image: River Flowing "They've been very smart about building slowly but surely," said Jeetil Patel, an analyst with Deutsche Bank Securities. "Now they're in a position to start crushing competitors, or to buy them up." Digital River is a cross between an application service provider and an electronic software distributor, say analysts. ASPs provide services using other developers' software and gear. An ESD sets up and runs a company's Web site using its own applications. But those lines are blurring as both types of businesses focus on gaining new customers through value-added services. That's Digital River's aim. It's created its own set of e-commerce applications. But its programs do more than just let buyers swap things with sellers. Its services include analytics capabilities to track Web site traffic automatically. Digital River can set up a company with its e-commerce system, as well as a targeted marketing campaign. The company says that's what gives the Eden Prairie, Minn.-based developer its edge. "We've built a basic platform of services," said Joel Ronning, Digital River's chief executive. "It's ours, so we know what it can do and we can expand it in almost any direction." Clients are charged fees based on the services they use. Since they use Digital River's system, customers don't pay huge setup costs. "Our services cost five to 10 times less than setting up an e-commerce system internally," Ronning said. Getting a large Digital River client up and running in its first year probably averages $150,000 to $300,000, he says. A company generally would have to spend more than $1 million to do the same thing from scratch. "You've got to hand it to them," said Louis Columbus, an analyst with market tracker AMR Research Inc. "They've been able to succeed where everyone else has failed." Instead of trying to land a few big customers, Digital River has spent the past five years targeting small and midsize companies. "To make it in this business you need volume," Ronning said. "There's many more opportunities with smaller customers." As with ASPs, Digital River depends on economies of scale. The company reached its revenue goal of $14 million in the third quarter. That's up 84% from the year-ago quarter. It's also the target Ronning says the company needed to hit to ensure growth. Last quarter the company, which has been public since 1998, generated its first positive cash flow. It made $590,000 before interest, taxes and amortization charges. It reported a net loss of 2 cents a share. Analysts expect Digital River to break into the black this quarter, earning 3 cents a share. "This company is a real breadwinner," said Chris Kwak, an analyst at Bear, Stearns & Co. "They've kept costs under control while building out their business and making sure they have enough customers to support expansion." With 13,000 corporate clients, Digital River is confident it's reached a level for consistent profit growth, Ronning says. In the third quarter, the company made two small acquisitions. Analysts call both of them shrewd deals. "They know in this economy there are a lot of good, little niche service providers out there that can be bought fairly cheap," said Columbus. "They're very aggressive about using that as an economical way to add value to their product line." He says Digital River has a range of e-commerce services few can match. One example is its ability to create electronic marketing plans. Digital River says its top clients have doubled online sales via its direct-marketing e-mail campaigns. "As we've moved forward, we've spent less time figuring out how to ship an order and more time working on how to get new business for our customers," Ronning said. The result, says Gartner Dataquest Inc. analyst Joanne Correia: "Their operation is at a point where it's big enough to take on the bigger service providers."