Digital River 2006 Annual Report Download - page 14

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Expand International Sales. We believe there is a substantial opportunity to grow our business by
enabling our clients to expand their sales through international online stores. Internet adoption and
broadband deployment continue to increase rapidly in the European and Asia Pacific regions. We have
seen significant growth in sales for clients that have created international online stores and we intend to
continue to enhance our technology platform, payment options and localized service offerings to increase
sales in international markets.
Provide Clients with Strategic Marketing Services. We proactively develop and deliver new
products and services, called strategic marketing services that are designed to help our clients improve
customer acquisition and retention and maximize the lifetime value of customers. These services currently
include paid search advertising, search engine optimization, affiliate marketing, store optimization, and
e-mail marketing and optimization. In general, we manage these programs for our clients and have
achieved significant increases in client revenue, return-on-investment or both, compared to what clients
experienced when running these programs and supporting technologies in-house. We intend to continue to
develop and/or acquire new value-added strategic marketing services and technologies to create additional
sources of revenue for our clients and for Digital River.
Maintain Technology Leadership. We believe our technology platform and infrastructure afford us a
competitive advantage in the market for outsourced e-commerce solutions. We intend to continue to invest
in and enhance our platform to improve scalability, reliability, security and performance as well as reduce
costs. By leveraging our fixed cost structure, we can improve our ability to provide low-cost, high-value
services while continuing to deploy the latest technologies. Additionally, we plan to continue investing to
enable our clients to further penetrate international markets, enhance their relationships with their
customers, better manage the return-on-investment across all their online marketing activities, and
successfully adopt new selling models such as subscriptions, “software-as-a-service,” “try-before-you-
buy” and volume licensing.
Continue to Seek Strategic Acquisitions. Historically, we have been an active acquirer of businesses,
and we expect to continue actively pursuing acquisitions that further our business strategy. Some of the
strategic factors we consider when evaluating an acquisition opportunity include: expanding our base of
clients, improving the breadth and depth of our product offering, improving the catalog of content,
extending our strategic marketing and other services offerings, expanding our geographic reach and
diversifying our revenue stream into complementary or adjacent market segments.
Expand the Digital River oneNetwork Marketplace. We have developed a global marketplace we
call Digital River oneNetwork which enables our clients to efficiently offer their products to a broad
range of online retailers and affiliates. Affiliates are entities (individuals, organizations, companies, etc.)
that generate online traffic to specific websites. On those websites, there are links, advertisements and
other offers to sell various products and services. If a visitor clicks one of the links or advertisements and
subsequently makes a purchase, the affiliate receives a commission in the form of a fixed fee or a
percentage of the selling price of the product(s) purchased. Affiliates are an increasingly important source
of website traffic as they can target specific types of Internet users.
Services
We provide a broad range of services to our clients, including design, development and hosting of online
stores,, merchandising, order management, fraud prevention screening, denied parties screening, export
controls, tax compliance and management, digital and physical product fulfillment, multi-lingual customer
service, online marketing services including email marketing and paid search program management, and
analytics and reporting. Most of these offerings can be managed through client-facing, remote control
self-service tools that are easily used by business users without specialized training. Since clients utilize our
centralized system and processes, we can consistently offer best practices across our entire client base.
Store Design, Development and Hosting. We offer our clients website design services utilizing our
experience and expertise to create efficient and effective online stores. Our e-commerce solutions can be
deployed quickly and implemented in a variety of ways from fully-functioning shopping carts through
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