Electronic software distribution company, Digital River Inc is looking to concentrate more on hosting entire transaction-based web sites of software publishers, which has higher margins than its straight distribution deals during this year. And while it has spent 1998 signing up software publishers right, left and center, this year it will sign fewer, but they will be of higher quality, the company promises. Digital River hosts software from many top software publishers at its data center and distributes the software over the internet when customers require it, taking a percentage for itself, but charging the companies nothing to host the software. It also hosts software for about 1,000 resellers, providing back-end distribution for them online. During the fourth quarter it also began signing up retailers, including CompUSA and K-Mart. It executed transactions from 148,000 unique consumers during the quarter. It reckons it has signed deals with about one fifth of the top 100 software companies, depending on how you define them. The Minneapolis, Minnesota-based company yesterday reported net losses of $4.5m, up from $1.4m last time, on revenues that were up to $9.4m, from $1.3m previously. On a per share basis, the 26 cents loss per share was just one cent inside what analysts had been expecting, according to First Call. The balance sheet was boosted by the IPO in August and the secondary offering that followed in December meant that the company ended the year with cash of $74m an it intends to increase its product development expenditure throughout the current year. Version 3.0 of its commerce network system will be launched in the fourth quarter of 1999. For the year Digital River recorded net losses of $13.8m, up from $3.5m the previous year, on revenues that rose to $20.9m, from $2.5m in 1997.
