Digital River reworks its e-commerce platform as its founder moves toward retirement

The e-commerce technology provider’s Q3 revenue declined 3.9% from a year ago.

Allison Enright

Digital River Inc., an e-commerce technology and services provider, this week announced plans to retool its e-commerce platform so that it can sell components of it on an a la carte basis. It also announced that founder Joel A. Ronning has stepped down from his role as chief executive officer, a post he has held since 1994.

Ronning will remain as chairman of the board through the end of the year, then retire. Thomas F. Madison, Digital River’s lead independent director, will serve as interim CEO while the company searches for a replacement.

The announcements came as Digital River released its third quarter results. Q3 revenue was $91.7 million, down 3.9% from $95.4 million a year ago.

Digital River president and chief operating officer Thomas M. Donnelly says the change to a “plug and play” structure for its e-commerce platform will let the company price services—which include marketing, fulfillment and a payments program—differently and more easily integrate its technology with that of other vendors. “We are unbundling core components and making them available to clients on an a la carte basis and adjusting our pricing strategies accordingly,” he said during a call with investors announcing the Q3 results. “This will allow us to connect our solution to even more service providers in the industry, enabling us to dramatically expand our commerce and payment services and their addressable markets.”

Digital River’s e-commerce services client base is comprised primarily of software, consumer electronics and video game companies.  Digital River’s says its largest software customer is Microsoft Corp.; it hosts that company’s Microsoftstore.com in 20 countries and territories. Microsoftstore.com is No. 74 in Internet Retailer’s Top 500 Guide. Digital River says during Q3 it expanded its relationship with electronics manufacturer Samsung to include the management of its U.S. e-commerce site. The company also says it signed a multi-year e-commerce agreement with Asus, a manufacturer of consumer electronics based in Taiwan. 

In September, Digital River announced plans to buy payment processor LML Payment Systems for $102.8 million in cash. That transaction is expected to close in early 2013, the company said during the investors call. It expects that, combined, Digital River and LML Payment Systems will process more than $20 billion in online transactions annually. 


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