Digital River Records $5.34 Million 1Q Loss

Minneapolis-based ESD firm Digital River Inc. posted a
first-quarter 1999 net loss of
$5.34 million or 27 cents per share, compared with a net loss of $1.55
million or
16 cents per share, in the same period a year earlier.

Sales were $11.7 million in the quarter ended March 31, compared with sales
of $2.27 million in the first quarter of 1998.

“We continue to be excited by the performance of our core business of
providing electronic commerce outsourcing solutions for the sale of software
and other digital products over the Internet,” said Joel Ronning, chief
executive officer. “This business is strong and the market for electronic
software delivery continues to grow. Industry research from Jupiter
Communications projects that online software sales will double in 1999 over

There was no word on when profitability may be reached.

Ronning said that two acquisitions completed shortly after the close of
the quarter have given Digital River two of the major e-commerce service
providers to the shareware market. At the same time, Ronning said, the
company is moving ahead with its fee-based e-commerce service initiative
aimed at leveraging the company’s infrastructure by providing e-commerce
solutions to non-software companies.

Digital River also will soon begin providing outsourced solutions for
downloadable music and said its first client for the service is New
Orleans-based WWOZ-FM Radio.

Digital River provides more than 5,000 software publishers and online
with its proprietary technology for Internet delivery of more than 100,000
digital products, including 30,000 software products and applications.

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