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Digital River loses biggest customer, sees stock plunge

Digital River‘s stock went over a waterfall today, with investors bailing on the e-commerce company after it announced it’s losing its largest customer. The Eden Prairie company’s stock dropped nearly 40 percent this morning on news that anit-virus software maker Symantec will build its own system after its Digital River deal expires in June 2010.

“We are surprised and deeply disappointed that Symantec has chosen to move to an internally developed system, but we remain very confident in the future of our business,” Digital River CEO Joel Ronning said in the company’s statement.

One analyst tells the Wall Street Journal that investors are probably overreacting. Symantec accounted for more than 25 percent of the company’s revenue last year, but Digital River has been growing steadily and diversifying into areas that are likely more profitable than the Symantec business, said Kerry Rice of Wedbush Morgan. “I don’t believe they turn off the spigot tomorrow and there’s no revenue,” he said.

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Comments (2)

  1. Submitted by Richard Schulze on 10/12/2009 - 03:24 pm.

    Digital River CEO Joel Ronning is a very forward thinking CEO. This is nothing but a minor hiccup for the future of Digital River.
    Joel and his companies history speaks for itself.

  2. Submitted by Mark Gisleson on 10/12/2009 - 04:47 pm.

    I can think of very few names in tech I trust more than Digital River.

    I wish I could say the same about Symantec. To this day the only software that ever obliterated any of my client files permanently was made by Symantec. (If you can’t trust software that backs up your hard drive, what can you trust?)

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