$2.8B Deal to Speed Delivery Of Audio, Video Over Web

Akamai, known for speeding Web page response time by caching, adds to stable

Akamai Technologies Inc.'s proposed $2.8 billion purchase of potential rival Intervu Inc. should help bolster the company's position as one of the leading providers of Internet content delivery services, analysts said.

Cambridge, Mass.-based Akamai last week said it would acquire Intervu in an all-stock transaction. Intervu is a San Diego-based provider of Internet audio and video delivery services.

The proposed purchase comes less than a month after Akamai's $200 million purchase of Network24 Communications Inc., a Cupertino, Calif.-based vendor that helps companies add video and audio content to their Web sites.

The moves should help Akamai offer a wide-ranging portfolio of services, from data, audio and video delivery to production, broadcasting and audience-management services, said Jami Axelrod, a product manager at the company.

Though it closed last year with fourth-quarter revenue of just $2.6 million and accumulated losses of more than $30 million, Akamai's market valuation early this month was more than $20 billion. Its list of more than 200 customers includes CBS Corp. in New York, CNN Interactive in Atlanta, Yahoo Inc. in Santa Clara, Calif., J. C. Penney Co. in Plano, Texas, and Britannica.com Inc. in Chicago.

Much of the investor and customer confidence stems from a patent-pending Akamai technology that speeds up Internet content delivery by routing and caching frequently accessed and static data.

On typical Web sites, all the components that make up a Web page are stored on the home site's server and must be transmitted over the network each time a page is requested. Akamai's technology allows site owners to use a form of caching to store much of the static information, such as logos and graphics, on Akamai servers in networks around the world. Thus when a user requests a page from a Web site, the various static components on the page are pulled together from servers as efficiently as possible.

"It's a really excellent technology. Download times have been reduced drastically," from more than 12 sec. to less than 4 sec. per page, said Camille Currim, vice president of systems at New York-based iVillage Inc., an Akamai customer.

The Intervu purchase will allow Akamai to offer the same kind of services with audio and video content, too, said Brendan Hannigan, an analyst at Forrester Research Inc. in Cambridge, Mass.

"Akamai has done a good job of basically creating a new service category in many ways,'' said Joe Laszlo, an analyst at Jupiter Communications Inc. in New York.

Along with San Francisco-based Digital Island Inc., Akamai has been a leader in addressing problems created by the growing Internet congestion and sudden spikes in Internet traffic, Laszlo added.


Copyright © 2000 IDG Communications, Inc.

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