Digital River Reports Q1 Losses, Moves into Music Download

Computergram International, April 23, 1999

Digital River Inc, the Minneapolis, Minnesota-based electronic software distribution company turned in first quarter net losses of $5.3m, up from $1.6m losses last time. Net losses per share were $0.27, which is two cents better than First Call's average analysts' estimate. The company also announced its move into the music download market yesterday with a deal to provide outsourced services to WWOZ-FM of New Orleans, which will use Digital River's back-end to provide MP3 downloads from its web site.

The company says it processed software sales from 204,000 unique customers during the quarter, a 38% rise from the previous quarter. The company's move into more general e-commerce services using its network will be called Commerce Bridge and the company says it will announce its first major clients with a few weeks, However, back in January, the company revealed that it had already signed up CompUSA and K-Mart. The company made two acquisitions shortly after the quarter ended, snapping up Maagnum Internet Group and Public Software Library Ltd, which are both providers of shareware. Digital River paid $7.7m in cash and stock for Maagnum, and $6.5m in stock for PSL. Cash and equivalents stood at $70.4m at the end of the quarter.