Akamai deal helps extend multimedia interests
The Net upstart is using its high-flying stock to jump into the acquisition game, aiming to expand its footprint in the online multimedia world.
The company today agreed to buy Network24 Communications, a Cupertino, Calif.-based company that produces toolkits and services for creating streaming media Webcasts. It's Akamai's first outside acquisition, and the first tangible sign of the company?s more ambitious services strategy.
The stock-based purchase is valued at $200 million, based on Akamai's closing price last Friday.
"We are extending (our focus) a little bit," Akamai senior product manager Ray Weaver said. "But this company is very complementary and outside the scope of what we do."
Akamai, pronounced AH-kuh-my, a Hawaiian word for ?clever? or ?cool,? is one of a handful of new Net firms boosted by technology aimed to eliminate Net congestion. It and several other infrastructure companies have become Wall Street darlings in recent months, but this success has also sparked considerable competition from other start-ups.
The Cambridge, Mass.-based firm has placed thousands of Web servers inside Internet service provider (ISP) networks around the world, and now sells space in these servers to customers ranging from Yahoo to CNN. Akamai?s technology routs requests for Web sites to servers physically closest to individual users, speeding download times.
Most of Akamai?s customers host simple, unchanging pieces of their Web sites--such as navigation bars, advertisements or other static graphics--on Akamai's servers. But the company also offers a streaming-media service its says can improve the quality of notoriously choppy Webcasts. Apple's QuickTime TV service is the largest client of this "FreeFlow" system, Akamai says.
But with many big Web companies looking at bolstering their multimedia offerings, Akamai wanted to improve its streaming services. Weaver said the Network24 division will allow companies to create and manage streaming video more easily, in turn making Akamai's streaming media services more attractive.
Network24 provides a toolkit that allows users to mesh streaming video with online PowerPoint presentations, or create new video presentations on the fly. The service also lets site managers closely manage multimedia Webcasts with pay-per-view access, registration and viewer-tracking systems, and even chat and program guide features.
The purchase is part of the company's move to providing applications online as well as simple static content, Weaver said.
Akamai's stock has been one of several to be hit hard in the recent technology sell-off. It was trading at about $213 at midday Monday, down from more than $340 in early January.