This evening I went online to BestBuy.com to pick up a new monitor for my home office PC. My old monitor crapped out a few days ago, and I’ve been meaning to get around to purchasing a new one. I tend to avoid brick and mortar stores for consumer electronic purchases, and BestBuy.com is usually the first website I start with when shopping for consumer electronics. (Apparently, I am like most other online shoppers… I read a recent analyst report that ranked BestBuy.com as number one in total online consumer electronic sales.)
After using BestBuy.com’s user ratings to sort through and find the best-rated 23-inch monitor, I settled on an Acer H233Hbmid 23 inch Widescreen HD LCD Monitor listed at $209.99.
Thankfully for me, I use a couple of different browser add-ons which provide me with timely shopping related information while I am browsing the web. For this purchase, I followed through a relevant message that came up from PriceGong, which I had installed through W3i’s Install IQ process a few months back. PriceGong alerted me that CompUSA.com had the exact same monitor for $199.99 with no shipping and handling, and no sales tax.
Later on, I proceeded through the checkout on BestBuy.com just to see what my final total would have been had I purchased this monitor through BestBuy.com. With $14.99 for shipping and handling, and $16.37 sales tax, my total would have come to $241.35. I saved $41.36 because my installed application, PriceGong, recommended CompUSA.com while shopping at BestBuy.com!
Most tech bloggers talk down about any application that requires an install, such as Windows applications and hybrid applications, like the PriceGong browser add-on. Most tech bloggers are so caught up in the cloud these days that they fail to remember why operating system integration can be so useful. How can the cloud compete with the kind of timely information an installed application can provide?
Just this week, local Minnesota-based Digital River lost its largest client, Symantec, which represented approximately 30% of their revenue. Based on the public reaction from senior management, it appears that Digital River was blindsided by Symantec’s announcement. The negative 38% impact on Digital River’s stock price was not too pretty. I had been hearing gossip and rumors for months that one of Digital River’s largest customers would likely walk from them, but the general sentiment was that it would be Microsoft and not Symantec.
According to a report Merrill Lynch put out, Symantec might not have been such a great account for Digital River after all. Apparently that portion of Digital River’s business had slowly been declining for a while now, whereas the rest of Digital River’s business had a higher growth rate. My prediction is that Digital River will bounce back. I have always been impressed by their resiliency as a company, having watched them from the sidelines for a number of years and hearing stories from former employees, such as Lisa Nistler, who works with me at W3i and who was recently promoted to VP of Marketing at W3i (congratulations again Lisa!).
Do you have a good customer concentration story or perspective on Digital River’s future? If so, please post in the comments of this blog post.
I’ll give you a customer concentration story of my own… The risk of heavy customer concentration is one of the core weaknesses of W3i’s closest competitors, the toolbar players. W3i’s competitors that are dedicated to toolbar solutions that are monetized exclusively through search feeds run a very high risk tied to the search market. When these competitors have any kind of hiccup with their search feeds, whether it be from a reduction in rates from their search partner, a change in toolbar usage behavior driven by a new browser release, or any other possible factor, application publishers who use these competitors to provide revenue within their installers can see a sharp decline in revenue very quickly. I am so thankful that our business model is centered on a marketplace approach, where we provide a wide range of application offers, including toolbars and other high-revenue-generating Windows applications, versus the toolbar-only model.
