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Digital River Launches a PR Flood

E-commerce outsourcing company Digital River Inc. has been issuing a slew of good-news oriented press releases recently after its stock lost half its value, and today was no exception as the company touted an extended deal with Major League Baseball.

But investors remain skeptical.

Stock of the Minneapolis-based dived last week after the company lowered its first-quarter guidance downward, from 7 cents a share to 1 to 2 cents a share on a pro forma basis, citing a decline in IT spending.

Since then the company has been mounting a press release blitz. On Monday, the company said before the opening bell that it signed a deal to provide e-commerce operations for infoUSA's consumer products operations. Last week it was touting its new its Multi-Channel Customer Service Center as well as deals with the Thrustmaster & Hercules divisions of Guillemot Corp. and French rubber boat maker Sevylor.

Tuesday the company said it has extended its deal with MLB Advanced Media LP, the interactive media and Internet company of Major League Baseball. Digital River said it will provide an enhanced service offering including product fulfillment, customer service call center capabilities and "extensive" e-marketing services.

But despite these and other announcements and word of the acquisition of CCNow and the remains of Beyond.com, investors have continued to punish the stock. This morning it was down to $5.62; less than two weeks ago it was above $14.

As for the baseball deal, Digital River previously built a shopping site and e-commerce stores for each of the 30 MLB team sites. The stores, hosted and managed by Digital River, offer more than 15,000 MLB product SKUs, such as authentic jerseys and hats, outerwear, T-shirts, women's and children's clothing from every American and National League team, as well as authenticated memorabilia and novelty items.

In 2002, Digital River will also handle the transaction management from the auction section of the site.