Digital River to help Adobe sell subscription software

E-commerce firm Digital River Inc. has expanded its sales relationship with Adobe Systems to include marketing subscriptions to Adobe's cloud-based desktop PC software in 19 areas worldwide.

Subscription software, in which customers pay a monthly fee to gain online access to programs running in a remote data center, is a growing part of the Minnetonka firm's e-commerce offerings, which once centered on selling downloadable software.

Digital River stock closed at $18.32 Wednesday, down 20 cents, or 1 percent, after hitting a 52-week high on Tuesday.

Adobe, which has been using Digital River's e-commerce service since 2004, said it will now use Digital River to market subscriptions for the use of Adobe Creative Cloud desktop software in areas that include Hong Kong, India, Indonesia, South Korea, Malaysia, the Philippines, Russia, Singapore, Taiwan, Thailand and Turkey.

It is one of the first major deals Digital River has announced since February, when it named David Dobson CEO of the struggling Minnetonka e-commerce firm. He replaced founder Joel Ronning, who stepped down following uneven financial performance.

"Through our ongoing partnership with Digital River, we have been able to make the shift to subscriptions a natural next step," said Matt Thompson, Adobe's executive vice president of global field operations, in a statement. Digital River will provide "a fully localized purchase experience, from native languages and preferred payment methods to international tax structures and compliance."

Despite the stock's recent surge, Shawn Milne, an analyst with Janney Montgomery Scott in Philadelphia, is not yet sold on Digital River's comeback.

There has been other faint praise. Last week, TheStreet Inc., an online provider of financial information, said it was upgrading Digital River stock from sell to hold based on revenue growth, good cash flow from operations and stock price increases over the past year.

"However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share," TheStreet said.