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
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
, 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.

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