Digital River A Monster?
Mergers / Acquisitions - Editorial
Most of us have grown weary of Digital River's
acquisitions and are no longer shocked when the
announcements are made. How many of us have considered
the implications involved in the volume of "takeovers"?
I, like almost everyone in the industry, have
been fairly complacent about the acquisitions,
but now I'm seeing limited choices for developers
and the fact is the "little guy" can
no longer compete.
I looked the other way when RegNet,
FileBasket and SiliconRealms were bought by Digital
River this past summer. I didn't really mind when
DR acquired RegSoft, or Simtel though I was a
bit disappointed about RegNow. PsL and Digibuy
were first on the list, and long forgotten to
most. Most developers are not even aware that
Digital River purchased CCNow, Beyond.com, Freemerchant.com
and NetSales. The count in early 2003, was eleven
acquisitions in 3 years.
Of all the acquisitions the one
that disturbs me the most is the recent acquisition
of Emetrix, Qwerks and FileKicker. They were *my*
registration service and the things that were
great about them was that they were not corporate.
They were great at what they did and I was important
to them, or atleast I felt as if I was.
Obviously there is industry growth
and Digital River has come a long way from their
humble beginnings in 1996. The number of registration
services specific to software registrations have
dwindled. There are only three reputable registration
services that come to mind that are not (yet)
part of Digital River's network, eSellerate, ShareIt,
and SWREG. I don't envy these three companies
because they will likely find it very difficult
to compete against DR's falling commission rates
and their established network. Lets face it DR
can afford to provide services beyond the general
scope. They can offer further distribution opportunities
because of their vast network.
As much as I feel the remaining
registration services are facing an uphill struggle,
I think that Digital River is in a much more difficult
position. In order retain the customer bases of
the acquired properties DR needs to strike a balance
between leveraging new offerings while still allowing
each of the properties to maintain their small
business look and feel. They must combine the
networks to leverage the power of the acquisitions,
this must be done without disrupting existing
services, control panels and the responsive personalized
service that is currently provided. RegSoft customers
should be able to take advantage of RegNow's affiliate
network or Emetrix's control panel. Integrating
the technology, equipment and consolidating the
staff of the properties to leverage the power
of the acquisitions is not going to be an easy
Where does this leave developers?
The number of registration services has been greatly
reduced but the services available now, exceed
that of those offered in the past. eSellerate's
affiliate program has developed some great relationships
acknowledging the need to move away from a traditional
"cookie" tracking system. ShareIt has
developed an amazing international presence and
understanding of European markets. SWREG has just
undergone a verified by Visa process. The fact
is, as much as I hate the virtual monopoly that
has been created, DR's acquisitions have in fact
improved the services available to developers
(while admittedly reducing their choices).
Who is to Blame?
There is always someone to blame, when something
like this occurs, right? Is it Emetrix's fault
for selling out? Do I blame Ben Reser, one of
the former owner's of RegNow, for becoming a multimillionaire
at 21? Good business sense is to blame! I can
assure you that if Digital River was knocking
on my door offering me boat loads of cash, I would
sell out too. Who wouldn't? This isn't personal,
it is business and the reason most of us do what
we do, is to make money. All of these acquisitions
are industry success stories.
Challenge to these companies
for 2004 -
I would like to challenge the remaining
companies and Digital River in 2004 to make their
mark. ShareIt, eSellerate and SWREG improve your
services to a level that will compete with Digital
River's network. Offer something that Digital
River doesn't, treat me like a somebody not a
Digital River attempt to reach your
potential, strive to combine technology and leverage
the power of your network while not losing sight
of the small business feel that developers desire.
About the Author:
Sharon Housley manages marketing for NotePage,
a company specializing in alphanumeric paging,
SMS and wireless messaging software solutions.
Other sites by Sharon can be found at http://www.softwaremarketingresource.com
, and http://www.monitoring-
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