Press Release

FOR IMMEDIATE RELEASE

DIGITAL RIVER REPORTS RECORD SALES
FOR FOURTH QUARTER AND FISCAL 1998

MINNEAPOLIS, Minn., January 28, 1999 -- Digital River, Inc., (Nasdaq:DRIV) today reported that fourth-quarter 1998 sales grew by more than 600 percent from a year earlier and more than 60 percent from the third quarter of 1998.

Digital River's sales were $9,407,000 in the quarter ended Dec. 31, 1998, compared with $1,328,000 in the fourth quarter of 1997 and $5,758,000 in the third quarter of 1998. The company's net loss the fourth quarter of 1998 was $4,506,000, or 26 cents per share, compared with a net loss of $1,387,000, or 16 cents per share, in the same period in 1997.

For the year ended Dec. 31, 1998, sales were $20,911,000, up more than eightfold from $2,472,000 in1997. The net loss was $13,798,000, or $1.01 per share, in 1998 vs. a net loss of $3,485,000, or 46 cents per share, in 1997.

Joel Ronning, chief executive officer, said fourth-quarter sales substantially exceeded estimates, reflecting both the addition of new clients and sales growth within Digital River's existing client base.

We have been pleased with our ability to grow sales and are constantly exploring ways to leverage our current technologies, as well as to develop new technologies to further leverage our growing network of clients," Ronning said.

Perry Steiner, president, said the company processed sales transactions for 148,000 unique end-users during the quarter.

"Our database of consumers who have purchased from our network increased 69 percent from the third quarter, giving us a cumulative total of 361,000 unique consumers as of the end of the year," Steiner said. "Our system uptime was in excess of 99 percent during the fourth quarter, including scheduled maintenance. Our systems performance was as outstanding as ever during the surge in holiday activity."

Ronning said that with the $47 million in net proceeds raised in a December secondary offer, Digital River ended the year with total cash and investments of approximately $74 million.

"We have the capital to grow our business aggressively, " Ronning said. "We have several near-term technology initiatives underway, including further enhancements to our downloading technology, bringing out the third generation of our Commerce Network Server, and an entry into a new business - transaction fee based e-commerce service. As a result of these initiatives, we increased our product development investments in the fourth quarter, and this trend will continue through 1999.

"Now is the time to invest aggressively in our core technology and to continue to leverage that technology to our current business as well as extend this technology to other e-commerce businesses.

"Digital River is positioned to take advantage of the migration of software sales to the Internet. The future of software distribution is electronic delivery, and our recent addition of clients such as CompUSA, Wal-Mart and Kmart is further evidence that the nation's leading retailers are moving toward electronic software delivery offerings. And signing them as clients is further validation of our business model."

Digital River, based in Minneapolis, offers the world's largest online database of software products. The company provides more than 2,500 software publishers and online retailers with its proprietary technology for Internet delivery of more than 100,000 software and other digital products. For more information, visit the Digital River Web site at http://www.digitalriver.com.

Except for the historical information contained herein, this press release contains forward-looking statements, including statements containing the words, "believes," "anticipates," "expects" and similar words. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others: the Company's limited operating history and variability of operating results; market acceptance of electronic software delivery; the Company's ability to maintain relationships with software publishers and online retailers; competition in the electronic commerce market; and other risk factors referenced in the Company's public filings with the Securities and Exchange Commission.

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