Digital River Inc. has named David Dobson, an executive vice president at CA Technologies, as its new CEO, replacing founder Joel Ronning, who left the Minnetonka firm's top job in November after a series of earnings disappointments.
Dobson, 50, worked at Islandia, N.Y.-based CA Technologies, an information technology services company. He also has experience at Pitney Bowes, Corel Corp. and IBM.
Dobson, who will also join Digital River's board of directors, succeeds interim CEO Thomas Madison, who will continue as the firm's nonexecutive chairman. Before joining CA Technologies in 2010, Dobson was president of Pitney Bowes subsidiary Pitney Bowes Management Services.
Wall Street had welcomed Ronning's departure, citing a lack of growth and inconsistent performance. The company, which provides e-commerce services for customers including Microsoft, had recently had some difficult moments, such as a 20 percent stock drop in early August after a 31 percent decline in second-quarter earnings.
Asked whether Digital River needed to change to accommodate an industry shift from PC software downloads to mobile apps, Dobson said he still considered the company's existing businesses to still be a multibillion opportunity. And he disagreed with some critics that Digital River had not invested sufficiently in technology.
"We currently have healthy levels of investment in research and development," Dobson said in an interview Thursday. "My focus is going to be on making sure the investments we make are in the right spot."
Dobson offered few details of where he would take Digital River. But he suggested that the e-commerce company, which has been strong in sales of PC software, games and consumer electronics, might expand into other vertical markets. He also said the company needed to show more consistent growth.
Asked how he might deal with Wall Street perceptions that the company was not transparent and had produced inconsistent results, Dobson declined to comment.
But one analyst said the company's problem were twofold.
"I think Digital River's problems were strategy execution and not investing enough in technology," said Colin Sebastian, an analyst at R.W. Baird and Co. of Milwaukee. "The Internet moves so quickly, as shown by the growth of mobile computing in the last two years. If, like Digital River, you run e-commerce websites for other companies, you have to be ahead of the technology curve, and they failed to stay ahead."
Sebastian said Digital River has been bypassed as PC sales have slowed and the focus of software has shifted from PC downloads to smartphone and tablet computer app stores, an area where Digital River does not compete.
Dobson said his background in managing technology will help him at Digital River. He spent 19 years at IBM and headed its Canadian PC business. He also was the CEO of consumer software firm Corel Corp., and helped CA Technologies shift into providing "cloud computing" from remote data centers.
"Digital River has an enormous set of assets, including people, skills, technology and intellectual property, that have not been fully leveraged," Dobson said. "Right now I plan to spend a lot of time traveling, meeting with our 1,400 employees around the world and talking to customers."
Added Sebastian, "It's worth having someone from the outside come and take a hard look at Digital River's opportunities. It gives the company a chance to reset and refocus on where the faster growth opportunities are."
Dobson's hiring was announced after the market closed. Digital River closed at $14.25, down 15 cents or about 1 percent.
Steve Alexander • 612-673-4553