Digital River 2002 Annual Report Download - page 8

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PART I
I TE M 1. BU SIN ESS.
C AU TI ONA RY ST AT E ME NT PU RSU AN T T O THE PRI V AT E SEC UR I TI ES LI TI GAT ION R EFORM A C T OF 1995
Certain statements set forth or incorporated by reference in this Form 10-K, as well as in our Annual Report to Stockholders for the year ended
December 31, 2002, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words
such as “believes”, “anticipates”, “expects”, “intends”, “estimates” and similar expressions are intended to identify forward-looking statements,
but are not the exclusive means of identifying such statements. These statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results,
performance or achievements, or industry results, expressed or implied by such forward-looking statements. Such factors include, among others:
our limited operating history and variability of operating results; risks associated with general economic uncertainty; our dependence on
software publishers and online retailers; the integration of acquired companies; risks associated with electronic software delivery; our
dependence on the Internet and the growth in electronic commerce and Internet infrastructure development; competition in the electronic
commerce industry; our dependence on key customers; our dependence on key employees; system development and electronic commerce
security risks; changes in laws and regulations; and other risk factors set forth under “Risk Factors” and elsewhere in this Form 10-K. We
expressly disclaim any obligation to update or publicly release any revision to these forward-looking statements after the date of this Form 10-K.
Overview
We are a provider of comprehensive electronic commerce outsourcing solutions. We were incorporated in February 1994 and commenced
offering products for sale through our clients’ Web stores in August 1996. As a leading global e-commerce outsource provider, we enable our
clients to access our proprietary electronic commerce system over the Internet. We have developed a technology platform that allows us to
provide a suite of electronic commerce services, including Web commerce development and hosting, transaction processing, fraud screening,
digital delivery, integration to physical fulfillment and customer service. We also provide analytical marketing and merchandising services to
assist clients to increase Web page view traffic to, and sales through, their Web commerce systems. We provide an outsourcing solution that
allows our clients to promote their own brands while leveraging our investment in infrastructure and technology. Some of our key clients
include Cisco, Inc., H&R Block, Inc., Johnson & Johnson, Inc., Major League Baseball, McAfee.com Corporation, Microwarehouse, Inc.,
Software Oasis, Inc., Symantec Corporation and Visioneer, Inc.
Our proprietary commerce network server technology, or CNS, serves as the platform for the majority of our solutions. Our technology
incorporates custom software applications that enable Web store authoring, electronic software delivery, fraud prevention, export control,
merchandising programs and online registration, and features a database of more than 290,000 software and digital products. Using our
platform, we create Web commerce systems for our clients that replicate the look and feel of each client’ s Web site. End-users enter the client
site and are then seamlessly transferred to our commerce server. End-users can then browse for products and make purchases online, and once
purchases are made, we either deliver the products digitally to the end-user through the Internet or communicate the order through its integration
into a number of third-party fulfillment agencies for physical fulfillment. We also provide transaction processing services and collect and
maintain critical information about end-users. This information can later be used by our clients to facilitate add-on or upgrade sales and for other
direct marketing purposes. We actively manage direct marketing campaigns for our clients and also deliver purchase information and Web store
traffic statistics to our clients through online reporting.
General information about us can be found at www.digitalriver.com under the “Investor Relations” link. Our annual report on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments or exhibits to those reports are available free of
charge through our website as soon as reasonably practicable after we file them with, or furnish them to, the Securities and Exchange
Commission.