Adding Migration to the Model

E-commerce services company Digital River Inc. in
Minneapolis acquired Calico Commerce Inc.’s Market
Maker business, allowing Digital to expands its solutions so that client
companies can migrate between outsourcing and managing their e-commerce
operations in-house.

Digital River said the all-stock deal, valued at about $8 million, includes
personnel, the Market Maker technology and clients. Digital, which bills
itself as a Commerce Service Provider, said the deal makes it “the first
outsourcer of its kind to offer a multi-channel e-commerce suite that can be
outsourced in a hosted environment or purchased as a packaged application.”

“By combining Calico’s commerce platform with our e-commerce services model
and expertise, we can create a hybrid solution that offers companies the
ultimate flexibility in building a long-term, low-risk, scaleable commerce
solution,” said Joel Ronning, Digital River’s CEO.

“Whether companies choose to outsource their e-commerce operations, manage
them in-house with our new packaged application, or migrate from one solution
to the next, we can provide a clean, easy-to-navigate e-commerce road map,”
he said.

Digital River acquired Calico’s Market Maker business and its associated
assets in exchange for approximately 1.6 million shares of Digital River
common stock, which was trading at $5 at mid-morning, up 18 cents.

The agreement includes an unspecified earn-out for additional shares of
Digital River common stock based upon the revenue generated by the Market
Maker product over the next 13 months.

Digital River plans to hire the approximately 30 Calico employees involved in
the sales, service and development of Market Maker.

The deal includes a distribution and OEM licensing agreement that lets
Digital River license Calico’s Advisor (a configurator) and Price Point (a
catalog-pricing engine) applications in a hosted environment. Calico will be
able to license back Market Maker.

In addition, San Jose, Calif.-based Calico, a
provider of e-business apps that let users execute real-time pricing and
manage quote and order processes via the Web, will act as Digital River’s
distribution channel in Japan for sales of Market Maker.