Digital River 2006 Annual Report Download - page 19

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• Web hosting, web services and infrastructure companies that offer portions of our solution and are
seeking to expand the range of their offerings, such as Network Solutions, LLC, Akamai Technologies,
Inc., Yahoo! Inc., eBay Inc. and Hostopia.com, Inc.
We believe that the principal competitive factors in our market are the breadth of consumer products and
services offered, the number of clients and online channel partnerships, brand recognition, system reliability
and scalability, price, customer service, ease of use, speed to market, convenience, and quality of delivery.
Some of the companies described above are clients or potential clients, but they may choose to compete with
us by adopting a similar business model.
Intellectual Property
We believe the protection of our trademarks, copyrights, trade secrets and other intellectual property is
critical to our success. We rely on patent, copyright and trademark enforcement, contractual restrictions, and
service mark and trade secret laws to protect our proprietary rights. We have entered into confidentiality and
invention assignment agreements with our employees and contractors, and nondisclosure agreements with
certain parties with whom we conduct business in order to limit access to and disclosure of our proprietary
information. We also seek to protect our proprietary position by filing U.S. and foreign patent applications
related to our proprietary technology, inventions and improvements that are important to our business. We
currently have fourteen U.S patents issued with eight to seventeen years remaining prior to expiration. We also
have over forty U.S. and foreign patent applications pending. We pursue the registration of our trademarks and
service marks in the U.S. and internationally. We have a number of registered trademarks in the U.S.,
European Union and other countries.
Employees
As of January 28, 2007, we employed 1,086 people. We also employ independent contractors and other
temporary employees. None of our employees are represented by a labor union, and we consider our employee
relations to be good. Competition for qualified personnel in our industry is intense. We believe that our future
success will continue to depend, in part, on our continued ability to attract, hire and retain qualified personnel.
Executive Officers
The following table sets forth information regarding our executive officers at February 1, 2007:
Name Age Position
Joel A. Ronning .................. 50 Chief Executive Officer
Thomas M. Donnelly ............... 42 Chief Financial Officer
Mr. Ronning founded Digital River in February 1994 and has been our Chief Executive Officer and a
director since that time. From February 2001 through February 2004, Mr. Ronning also was a member of the
Office of the President. From February 1994 to July 1998, Mr. Ronning served as President of Digital River.
From May 1995 to December 1999, Mr. Ronning served as Chairman of the Board of Directors of Tech
Squared, Inc., a direct catalog marketer of software and hardware products. From May 1995 to July 1998,
Mr. Ronning served as Chief Executive Officer, Chief Financial Officer and Secretary of Tech Squared. From
May 1995 to August 1996, Mr. Ronning also served as President of Tech Squared. Mr. Ronning founded
MacUSA, Inc., formerly a wholly-owned subsidiary of Tech Squared, and served as a director of MacUSA,
Inc. from April 1990 to December 1999. From April 1990 to July 1998, Mr. Ronning also served as the Chief
Executive Officer of MacUSA, Inc.
Mr. Donnelly joined Digital River in February 2005 as Vice President of Finance and Treasurer and was
named Chief Financial Officer and Secretary in July 2005. From March 1997 to May 2004, he held various
positions, including President, Chief Operating Officer and Chief Financial Officer with Net Perceptions, Inc.,
a developer of software systems used to improve the effectiveness of various customer interaction systems.
From March 1995 to March 1997, Mr. Donnelly served as a financial and management consultant in the
capacity of chief financial officer or corporate controller for various public and private companies and
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