Symantec launches own e-commerce site, will end work with Digital River

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Security, storage and systems management services provider Symantec is rolling out its own internally developed e-commerce solution. It will not extend its contract with e-commerce services provider Digital River beyond its June 30, 2010 expiration.

As Symantec has developed more online services, such as backup, its products became more integrated with e-commerce, “thus requiring us to have direct control over our e-commerce solutions,” said Janice Chaffin, group president of Symantec's consumer business unit, during a conference call with analysts to discuss the announcement.

The company has developed and tested its e-commerce technology over the past two years. It expects to roll out the platform, which is already available in some countries, worldwide over the next eight months.

Chaffin added that the program improves Symantec's “competitive advantage in acquiring and retaining customers.” Symantec also expects to provide customers with a more consistent experience, thereby creating stronger relationships.

The Symantec e-commerce site generated $650 million in sales, or 36% of the company's consumer revenue, in fiscal year 2009. The companies have worked together since 1997.

Symantec has developed its e-commerce know-how in recent years through initiatives such as the worldwide rollout of an auto-renewal service for subscribers, the online operations of its PCTools electronic store and the expansion of its affiliate network.

Chaffin said the platform will also provide insights that enable it to develop more targeted programs to reach customers, as well as more innovative products and services.

Symantec is Digital River's largest client, with Symantec-related income accounting for 33.7% of the company's 2008 revenues. Symantec said it paid Digital River $95 million during Symantec's 2009 fiscal year.

However, Digital River has seen a recent increase in business from other clients. The company reported that non-Symantec business grew 8% in 2009's third quarter, compared to 2% growth in the second quarter. Digital River's Symantec-related revenues fell to 30% of its overall business in the second quarter. Digital River eliminated 120 positions globally in July as part of a realignment.

“As more businesses move to online sales and distribution, we are well positioned for future growth,” said Joel Ronning, CEO at Digital River, during the conference call.

This summer, Digital River introduced an e-commerce platform designed to optimize the online sales of limited-edition and clearance merchandise for manufacturers.


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