Digital River, Inc. (DRIV) recently extended its agreement with Trend Micro till December 2014.
As a part of the renewal agreement, Digital River will manage the online commerce and e-marketing solutions for select Trend Micro regional e-stores through December 2014.
Being a long standing client since 2001, Trend Micro will continue to work with Digital River’s marketForce interactive agency.
Trend Micro currently uses a broad range of marketForce’s e-marketing services, including program strategy, media buying, coding, creative management, test execution, reporting, optimization and analysis in order to support customer acquisition and improve returns across its offerings.
The company has been on the lookout for to renewal of its agreements with its customers after having lost Symantec Corporation in 2010.
Symantec decided to not renew its e-commerce agreement with Digital River beyond June 30, 2010 and migrated its online store traffic to an internally developed e-commerce system.
During the third quarter, Digital River signed many new and expanded agreements. The company extended its relationship with Siemens, Novell, Corel, Individual Software and Grass Valley. The company also signed multi year extensions with two of its top clients, Trend Micro and Kaspersky.
In 2010, Digital River amended amendment its agreement with Microsoft Corporation ( MSFT) and thereby extended the term of the Microsoft Operations Digital Distribution Agreement upto October 31, 2013.
Meanwhile, for 2013, the company is likely to face some headwinds due to macroeconomic conditions, client attrition and additional necessary ramp up in investments to ensure an updated technology infrastructure.
Digital River forecasts that overall softness in the economy, especially in Europe coupled with recent decline in PC sales will make it challenging to post a growth in revenue. The company saw some client attrition in 2012 and expects the same in 2013 along with a decline in supporting business revenue.
We continue to maintain our long-term Neutral recommendation on Digital River. Our recommendation is supported by a Zacks #3 Rank, which translates into a short-term rating of Hold.
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