We are maintaining our fair value estimate for Digital River DRIV after reviewing the firm's third-quarter results, released Tuesday. Revenue of $99 million was up 3% from the prior-year quarter. Revenue from selling products from Symantec--its largest partner at 29% of sales--fell 7%. Although this is a smaller decline than in the past three quarters, we expect this rate to accelerate, as last month Symantec informed Digital River that it will not renew its contract, which ends June 2010. Despite the loss of Symantec, revenue from other partners increased 8% from a year ago. However, the operating margin declined to 15% from 18% a year ago. We expect the loss of Symantec and competition to prevent Digital River from returning to historical operating margin levels.

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