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Software Marketing Newsletter

Software Marketing Newsletter
SMR - Special News Edition March 2004 Newsletter


Welcome to March''s Software Marketing News. An HTML version can be viewed at .

Tucows Follow up
As promised I spoke with Elliot Noss from Tucows both before and after publishing the articles about Tucows last month. For those that missed the original article it can be viewed online at:

According to Elliot Noss, CEO of Tucows, the article in SMR that detailed a former employee abusing their position at Tucows has resulted in numerous productive discussions with developers. Overall Elliot was quite pleased at how things have progressed and felt that in the long run things have worked out for the best.

Personally, I was surprised by the lack of public reaction to the article. I received a number of personal emails that contained a variety of reactions from the standard Tucows review complaints, to shock and surprise along with detailed accusations of additional problems inherent to review sites. It seemed developers were much more honest about their feelings regarding the article "off the record". The same thing occurred with the controversial Digital River article that I wrote back in January. Developers seem not to realize that they have influence in the industry they need only to band together to have clout.

Digital River Follow up

I received an overwhelming number of responses to my recent article "Digital River a Monster?". Overall the developers expressed a need to remain anonymous, they felt that any public commentary or criticism would reflect negatively on their business. The majority felt that the article accurately reflected the changes in the ecommerce landscape, as it pertains to shareware developers. I've taken the liberty of including the responses from the registration services, with their permissions of course, as I felt their comments should be heard. If you feel you can provide a perspective that has not yet been heard please forward your comments and I'll post them in the daily SMR blog. The original article written in January, that prefaces these reactions can be viewed at:


eSellerate reaction - Steve Kiene from eSellerate provided a detailed reaction to the SMR article that discussed the numerous acquisitions that DR participated in.

"Digital River does not intend to grow the size of their company, with respect to the number of employees. Joel Ronning has stated this several times. However, they do need to show growth. Their financial guidance is for about 20% growth in 2004. I believe that the growth will come from their employees spending more time with larger publishers where they can extract more money than with smaller publishers. They have a fixed number of hours in the year and a somewhat fixed number of employees. If they intend to bring in more money, each hour that each employee works will need to generate more money. I think that leaves the smaller guys out of the picture. This is where esellerate can shine."

"We specialize in the smaller developers. We have a reputation for providing outstanding service. Our publishers form a personal relationship with our employees because our employees don't leave. A publisher who signed up with John Petelle two years ago can still call John on the phone. We also pride ourselves on not having "professional" sales people. For example, John was a school teacher when we hired him for a position in our tech support department. He loved our products so much that he wanted to be able to actively spread the word about them. He became our first sales person. The other people that we've put in the sales department feel the same way. They work here because they think we have great products that are beneficial to publishers."

" We are always looking well into the future, and our development roadmap show sthat. We were the first to have a "next generation" affiliate system. A system that DR tried to copy. You can be sure we're not resting. We're working on a lot more ideas specifically to help shareware developers sell more copies of their products with less effort on their part. Aggregating product "catalogs" into one huge catalog doesn't generate sales. Do you really think that Best Buy is going to list FolderMatch on their web site? DR makes promises that are not met. We under promise and over deliver. We have formed business relationships that we can offer to our publishers that make sense for them. Relationships which have proven to provide results."

" When we first unveiled esellerate at SIC in 2001, we had 18 employees. One person remarked to me that no one could make money in the e-commerce business with 18 employees. Well, he was right. We now have 40 employees and we are profitable. And we're still growing. We will probably his 50 employees by the end of the year. I think we uniquely fill a niche in this market. DR has 500 employees. ShareIt has about 150. Some of the smaller providers have 3-4. We're at a unique size and in a unique position to take advantage of that size. We're completely internally owned so we don't have to answer to anyone besides our publishers. We have no quarterly financial numbers we have to hit in order to please investors or Wall Street. We are allowed to focus on doing the right thing for our publishers. Even though we have 40 employees, this company still runs like a small shareware company. I know, because that's how we started. The same values still are adhered to everyday. When publishers deal with us, they are dealing with people and not a faceless company. That will never change because I won't have it any other way."

In 2004 we will be expanding, in many ways, the services we offer to our publishers. We will have more marketing opportunities for them, more ways to reach targeting markets, more ways to manage their operations, and more ways to automate things so they can spend more time with their families at night and less time worrying about all the details of their business." -
eSellerate's views as per Steve Kiene

Digital River Reaction -Brant Pallazza made the effort to respond with a detailed letter explaining DR's strategies.

"Your newsletter article regarding the developments and acquisitions within the ecommerce outsourcing industry were extremely insightful. And while I disagree with a few of the suggestions made, generally speaking, I feel that your comments were very accurate. Please let me elaborate."

"You are correct in that acquisitions have been a significant part of Digital River's strategic development. The sheer volume of great authors and outstanding software titles now within the Digital River product catalog has enabled Digital River to expand our clients distribution further into existing channels and to create new channels where none previously existed. Our launch of the TrialWare channel and the opening of trialware stores on PCMag, The Chicago Sun Times and ComputerWorld are just a few of the opportunities that were previously unavailable to software authors."

"I disagree, however, with the suggestion that there are fewer options to authors as a result of Digital River's acquisitions. While it is true that some of Digital River's acquisitions no longer retain their original identify, these transactions involved the acquisition of a platform such as Netsales and that could not support their existing client base. The acquisition by Digital River of these platforms actually enabled authors to continue selling software without the loss of their ecommerce provider. As for the other acquisitions, every effort is made to ensure that each property continues to exist . Retaining the brand, the functionality, the personnel, and the personality that makes each so unique. The addition of eMetrix, Qwerks and Filekicker to the Digital River network will now provide Digital River with the added expertise of Brent Halls, his family, and his skilled team to our other shareware property knowledge base."

"The greatest challenge has not been the retaining of these unique brands as was suggested in your newsletter (although it has it's difficulties as I will explain shortly) . Instead, the challenge has been the integration of what we call "the back office". Many of companies acquired by Digital River had been maintained by a very small staff. As a result, emphasis on secure and redundant systems, domestic and international legal compliance, as well as redundancy in staff was not adequately maintained. For example, some of the acquired platforms can now provide 24X7 customer support. A service that they could not previously afford. One of Digital River's very first objectives with every acquisition is to secure these operations so as to reduce risk to us and to our clients."

"Regarding the management of each unique are absolutely correct, Sharon. A balance needs to be attained. It simply wouldn't make sense to try to add every feature to every platform. As they exist today, each platform has it's uniqueness. It's strength (and weakness). And it's personality. While we continue to integrate each property into a common catalog (for purpose of access the many DR channels) and secure the back office of each, we are simultaneously building out features and functionality on every platform. Among the short list of 2004 initiatives are: the addition of international payment options for RegSoft and DigiBuy, the addition of both affiliate and vendor features to the RegNow affiliate program, the addition of promotional email functionality (15% of Digital River client revenues come from promotional emails to their opt-in customers), the addition of more margin options to support a variety of product price points, and much, much more. Some features already enabled on some platforms include Google ad word tracking, WebSideStory site navigation and referral URL analysis, Hackersafe security certification, 15-day credit card billing reminder emails, and more."

"The number of registration services has not been reduced. But you are right on, Sharon. There are many more features within the existing services to support the author community. And with that, I accept your challenge for 2004. We at Digital River are committed to providing all of our authors, large and small with a premier level of service. We are also committed to provide opportunities to our clients that offer breadth of service, depth of opportunity, and ease of use. We look forward to a closer relationship with all of our authors on all platforms and an extremely successful year."
Digital River's views as per Brant Pallazza, Vice President Shareware

SWREG Reaction - Steve Lee of SWREG requested I summarize the exchange that we shared and post it to the newsletter. Steve made the unique effort of calling me immediately after the article was published, his point being was that he cared about the "little guys", and wanted to communicate that. While I rarely understand Steve's penchant for British humor, I appreciated that he made the effort to reach out and make an effort to make us feel special. He felt the article was accurate but felt that SWREG provides some really great, innovative features that developers need and appreciate. SWREG has been working on developing "verified by visa" which will ensure that developers are compensated on any orders that are verified regardless of whether they prove to be fraudulent.


What this Means - My Personal Reaction

This is by no means a definitive opinion regarding the registration services and what the outcome of the massive acquisitions that have occurred, simply and interim commentary. While Emetrix has been taken over by Digital River I'm pleased to report that I am still receiving the personalized service that I'm accustom to. There is however, no indication that Emetrix will have the ability to use the benefits of the acquisitions any time in the near future, meaning its unlikely that Emetrix will be taking advantage of RegNow's affiliate network anytime soon. I was pleased that the higher-ups at DR did make the effort to respond to the article. I hope that the response is indicative of how they value small businesses.

eSellerate has been a bit of a surprise, initially they took a very rigid corporate response to a payment issue that I had. They have since proceeded to implement a number of the suggestions regarding payment and transfer options, that I had suggested. Therefore eSellerate gets high-marks both responding and reacting to developer concerns.

Steve Lee, while quite funny, in my opinion will excel at being the lo-cost alternative for developers. Its unlikely in my opinion that Steve will have a network that can compete on the level of the other services but it is likely that he will be a great cost effective alternative. Steve's ability and willingness to communicate with developers is commendable and as a result I think he will remain a strong force.

ShareIt, though they did not respond either publicly or privately to the article, will likely continue to excel at providing a network that understands the needs of non-US developers.

Small Business Blog

Small Business Blog - I've created a daily small business blog that provides small business owners marketing information and ideas along with daily business tips, relating to online business marketing. viewable at:

Gamer Conference

The Gamer Technology Conference will be held March 11 & 12, 2004 in Seattle, WA (USA) at the Westin Hotel. The conference discusses contracts, licenses, brands, patents and copyrights unique to games. It provides information for forming strategic alliances, small company financing, successful roll-up strategies, emerging legislative trends; and convergences of games with Hollywood, wireless technology; the internet, and interactive electronic devices. Additional Details:

Spring Schmooze

A shareware schmooze, or casual shareware gathering of those in the Shareware industry is scheduled for April 15-17, 2004 in Vancouver, BC Canada
Details at

Shareware Industry Conference

This is *the* premier industry event. Scheduled July 15-17, in Rochester, NY, this years Shareware Industry Conference is shaping up to be spectacular. I highly encourage anyone and everyone in the industry to consider attending, it is a great marketing and networking opportunity. Always a worthy investment. Register now to receive an early bird discount. Details at

Vendors sponsorship opportunities still exist for SIC. If you are interested in exposure consider this great opportunity to exhibit or promote your company.
Details at

Fall Schmooze

A shareware schmooze, or casual shareware gathering of those in the Shareware industry is scheduled for Sept 16-18, 2004 in Grand Rapids Michigan Details at

Software Business Mag

Software Business 2004 is scheduled for September 22-23, 2004 at the Hyatt Regency, San Francisco, California. Details forthcoming.


Gnomedex v4.0 has been scheduled for Sept 30 to October 3, 2004 in Lake Tahoe, Nevada. Details at:

Big Search Engine News

Yahoo The big news is that Yahoo, as promised, dumped Google. The vast majority understood that Google would be replaced by Inktomi's pay per inclusion results but that appears to be only partially true. While currently it appears Inktomi is feeding Yahoo, that is scheduled to change after April 15, 2004. Apparently there will be a new pay per inclusion service that will feed the new Yahoo Slurp engine. It is unclear how similar Yahoo Slurp is to Inktomi or what the results will be like. Stay tuned for details of another shake-up mid April.

Google Google's last "dance", termed Brandy seems to have mellowed things out a bit. In fact the results are proving to be similar to the pre-Florida results served in October and early November. Whether things will last with the algo changes is unclear.


Chris Nielsen

I stumbled across a new SEO company. The focus on targeted scored keyword phrases for qualified traffic, employing a method they call "general optimization". Regardless of their method I turned up an amazing list of search engine submissions sites that they make the effort to maintain and publicize. Great resource Chris!!!
SEO Company -


Open Mike

I'm very interested in hearing what you want. I'm looking for article ideas or general topics that developers would like to hear more about. Send any suggestions, comments or questions to:

Ad Serving

Google's Adsense offers 6 additional ad box alternatives for serving web ads on partner websites. The ad boxes are still fairly unattractive but the colors can be edited to match the look of the website. Overall Adsense is an easy way to raise additional revenue and does not have any of the problems inherent to affiliate programs.

Advertising on Shareware Sites

It appears their has been a cost per click price increase at Tucows. The minimum pay per click for new or adjusted words is now $.10.

Digital Sea Advertising
Special Save 10% off’s Featured Submission service through March 31! Just enter the coupon code ‘BIGSAVE’ when ordering.’s Featured Submission service puts you at the top of your category and allows for greater product exposure on our site. To learn more, just go to:

In January WebAttack changed their name to SnapFiles, they felt they had outgrown their name and because they ar eno longer limited to Internet related software they should expand.

Thank you for your continued interest in Software Marketing Resource
Sharon Housley
Software Marketing Resource -
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