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

To: Mr. Miller who wrote (1149)	2/25/1999 10:58:00 AM
From: buffalogrif	Respond to of 3198

Although you've raised an excellent point, keep in mind that one man's "branching out" is another's "prudent leverage". To me, the major risk with Driv has always been that they would get trapped in a low margin, commodity business. In my work I have ASSUMED that some competitor (and likely many) will give the download capacity away for free in order to sign up publishers. But as I said in a prior post, getting software into a customer's computer and administering a secure data base which can drive followup sales and upgrades are entirely different skill sets. Notice that the second half of this doesn't contain the word "software". If we focus on this second half and realize that it can be leveraged into many different areas, then the potential gets pretty darn exciting. Demand for the second half is broader than the first and the margins should be substantially higher. That's why I was thrilled to hear Mr. Ronning hint about diversification and leverage during the 1/28 conference call and yesterday's news seems to confirm this. Bottom line: You're asking the right question. After all, how many small companies have screwed up by losing their focus? But ESD delivery dominance is neither possible nor the future for DRIV. There will always be someone willing to do it cheaper. The future is in the leverage and the scalability of the platform as service providers differentiate themselves from the commodity providers. ESD is a natural for that service, but it's the launching pad not the end game. Another Point: I couldn't have written a better article than the one which appeared last night on TheStreet. To someone not following the company it probably said "they're branching out because they have to, their customers can do it cheaper in-house". That's dead wrong but it reminds me exactly of those guru's who were skeptics on AMZN about 200 points ago because "anyone can duplicate what they're doing". Those same skeptics missed all the easy money and were probably the same managers who scrambled to get onboard when they realized how wrong they were. I'd love to see the same thing happen to DRIV about a year from now! ps. KJ. Check your messages.

To: Mr. Miller who wrote (1149)	2/25/1999 7:39:00 PM
From: KJ Duke	Respond to of 3198

I don't believe they are branching out too soon, they are simply responding to a natural market opportunity given their core competencies and technology. Management is not placing a high priority here relative to ESD - they fully intend to first and foremost become the dominant ESD company. Furthermore, they are at a very early stage in development of the non-software businesses. They are currently working on integrating enterprise software systems into their search engines, such that they can offer an efficient, seamless solution for high transaction processing and fulfillment over the Web targeting large mfring/ distribution clients. If anyone believes this business will drive the company in the near-term, or that mgt is developing this business as a "backup plan" or hedge on the ESD market, they're dead wrong.