Digital River Acquires Software Services from NetSales

Digital River, a commerce service provider (CSP), announced that it has acquired the software services business of NetSales, Inc., which hosts B2B and B2C e-commerce services for software publishers and software retailers. Digital River's front-to-back e-commerce services include site development and hosting, order and transaction management, system integration, product fulfillment, e-marketing, and customer service. HP is a Digital River client, as are Fujitsu, 3M, Siemens, CompUSA, and others.

The deal calls for Digital River to acquire the NetSales assets in exchange for 1 million shares of common stock, with a contingent earn-out for an additional 350,000 shares of common stock based on performance over the next 180 days. NetSales generated $1.3 million in net transaction revenue in 1999 from more than 500 clients.

Over the next 90 days, NetSales clients will be moved over to Digital River's commerce system and can immediately tap into the CSP's e-commerce services.

"After careful consideration and research, we have decided to focus solely on the tremendous opportunities in the B2B market outside of the software industry," says NetSales' Robert Fraser.

NetSales targets mid-market B2B companies (those with revenues between $100 million and $1 billion) with its services, which include the ability to generate online sales rapidly and to automate customer and supplier relationships. NetSales recently announce eGateway, a service that allows customers to participate in multiple electronic marketplaces and online exchanges. The idea behind all NetSales services is to enable mid-market companies to implement Internet solutions quickly, with minimal up-front investment and risk.