DOW JONES NEWSWIRES
Symantec Corp. (SYMC) will not extend its agreement with
eCommerce provider Digital River Inc. (DRIV) through the companies'
current contract that expires June 30.
Symantec plans to move all online sales of its Norton antivirus
software currently handled by Digital River, except in Japan, to an
in-house effort. Symantec said doing so will boost its
earnings.
In 2008, sales of products for Symantec accounted for
one-quarter of Digital River's $394.2 million of revenue. Sales
from services sold to Symantec consumers accounted for another 9.4%
of Digital River revenue.
"We are surprised and deeply disappointed that Symantec has
chosen to move to an internally developed system," said Digital
River Chief Executive Joel Ronning. "While Symantec is still our
largest customer, the proportion of Symantec revenues relative to
our other customers has declined significantly over the past few
years as our non-Symantec business has grown at an increasing
rate."
Digital River also said it expects third-quarter results to be
"at or slightly above" its forecast. It anticipates sequential
revenue from its non-Symantec business to have grown at about 8%,
compared with about 2% in the second quarter.
Shares of Digital River closed at $40.42 on Friday and didn't
trade premarket Monday. The company's stock has more than doubled
since late November. Symantec rose 1% to $16.80 in light premarket
action Monday.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com