Symantec Won't Extend Digital River Contract Past June

   DOW JONES NEWSWIRES 
 

Symantec Corp. (SYMC) will not extend its agreement with eCommerce provider Digital River Inc. (DRIV) through the companies' current contract that expires June 30.

Symantec plans to move all online sales of its Norton antivirus software currently handled by Digital River, except in Japan, to an in-house effort. Symantec said doing so will boost its earnings.

In 2008, sales of products for Symantec accounted for one-quarter of Digital River's $394.2 million of revenue. Sales from services sold to Symantec consumers accounted for another 9.4% of Digital River revenue.

"We are surprised and deeply disappointed that Symantec has chosen to move to an internally developed system," said Digital River Chief Executive Joel Ronning. "While Symantec is still our largest customer, the proportion of Symantec revenues relative to our other customers has declined significantly over the past few years as our non-Symantec business has grown at an increasing rate."

Digital River also said it expects third-quarter results to be "at or slightly above" its forecast. It anticipates sequential revenue from its non-Symantec business to have grown at about 8%, compared with about 2% in the second quarter.

Shares of Digital River closed at $40.42 on Friday and didn't trade premarket Monday. The company's stock has more than doubled since late November. Symantec rose 1% to $16.80 in light premarket action Monday.

-By Nathan Becker, Dow Jones Newswires; 212-416-2855; [e-mail]