Shares of the global cloud-commerce company, Digital River Inc. (DRIV) soared 42.8% touching a high of $24.72, finally closing at $24.08, after it extended the agreement with Microsoft Corporation (MSFT) till Mar 31, 2017.
A document filed with the SEC disclosed that Digital River entered into the Seventh Omnibus Amendment with Microsoft and thereby extended the term of the Microsoft Operations Digital Distribution Agreement. This agreement between the two technology companies dates back to Sep 1, 2006.
As part of the renewal agreement, Digital River will build, host and manage Microsoft's online store that sells both hardware and software.
Digital River has been planning on renewing the agreement with Microsoft scheduled to expire on Dec 19. For Digital River, both renewal as well as continuation of the relationship with its biggest customer were major achievements.
Recently, Digital River also signed two strategic alliances with Rauxa, Inc., an independent marketing agency, and Slalom Consulting, a business and technology consulting firm, to expand its global partner network. These partnerships will help Digital River to extend its SaaS-based commerce solutions, thus helping clients to add specialized, third-party consulting services and complementary web content management (WCM) system technologies.
Digital River provides a wide array of cloud networks offering commerce services, payment modules and marketing solutions to corporate clients spread over diverse sectors. The company helps its customers by creating an online sales platform while minimizing potential risks in the process. In the recently concluded quarter (third-quarter 2014), the company reported revenues of $88.8 million, up 2% year over year and within management’s guidance range.
Currently, Digital River has a Zacks Rank #3 (Hold). Better-ranked stocks in this industry include Mercadolibre, Inc. (MELI) and Overstock.com Solutions, Inc. (OSTK). All the stocks carry a Zacks Rank #2 (Buy).
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