Guided by the theory that there is strength in numbers, the companies are joining hands--and networks--to offer a Net-speeding service that will draw on each participant's resources to expand each company's reach.
The companies, dubbing their consortium "Content Bridge," say what they're doing is more than a simple Akamai-killing effort, however. They say they're bringing the formerly proprietary world of content distribution networks into the more powerful model of the Internet at large, where all networks can talk to one another.
"This isn't rocket science," said Richard Pierce, executive vice president at Inktomi. "This is a natural evolution for the Internet."
Whatever the philosophical goals, the announcement had very real effects on Wall Street. Akamai shares fell $2.31 to $69.31, while Inktomi jumped $9.13 to $120.75.
The content distribution business has taken off in the past year in large part because of the success of Akamai. That company launched with a new twist on an old premise, putting "caches" of content, such as Web pages or components of Web pages, inside hundreds of ISP networks around the world.
That meant that surfers who wanted a particular Web page, such as Yahoo's front door, would download much of the page from computers physically close to their own instead of from computers across the country, speeding download times.
Akamai launched with a splash, drawing in market giant Yahoo as an early customer in large part by proving its technology could substantially speed the download of Yahoo Web pages. Since that time Akamai has attracted many of the Web's other biggest names as customers, from CNN to Lycos.
Other content distribution companies have sprung up, creating considerable competition for the young market leader. But their market share has remained muted. Jupiter Communications analyst Peter Christy estimates that Akamai still retains close to 70 percent of the content distribution market's revenues.
The new consortium could allow the smaller competitors in tandem to reach something like Akamai's scale, analysts said.
Along with AOL and Inktomi, the coalition involves content distribution company Adero in a leading management role and will link into the server or data-hauling networks of Exodus Communications, Genuity, Digital Island, Mirror Image, Madge.web and NetRail. AOL also took a small stake in Adero as part of the deal.
Because the companies are linking their resources, a Web surfer physically close to content caches operated by Adero would also get the benefit of content hosted by Mirror Image, for example. The companies have agreed to pass all their customers' content throughout the coalition's various networks.
"Inktomi is getting its customers to work together collectively as if it were a bigger system," said Jupiter's Christy. "Inktomi is saying, 'We can build a federation to do this,' and if that's true you don't need an Akamai in the middle."
Akamai itself reserved comment, saying it was happy with its own business model for now.
"It's hard for us to comment on an approach that is unproven," said Akamai spokesman Jeff Young. "They've put out a plan. It's hard to conclude how effective it will be."
The coalition will have considerable catching up to do in reaching Akamai's set of services. Content Bridge will kick off in the fall offering flat, or unchanging, HTML pages. Akamai already offers streaming services and encrypted commerce support, and several months ago it launched an effort to add other Web applications into its service package.
Analysts note that there are many other technical issues to work out for the various Content Bridge consortium companies.
"The success of Content Bridge hinges on the resolution of several key technical challenges, including formalizing common network exchange log formats, billing capability and rights management," Bear Stearns Internet equity analyst Robert Fagin wrote in a research report today.
Jupiter's Christy agrees, saying Akamai may have an advantage because its content developer customers can simply go to one source, rather than a potentially fragmented consortium.
The coalition says its effort will grow as new companies join and could even include Akamai one day.
"No one company can really transform the Internet alone," Pierce said.
But analysts say that luring Akamai is unlikely until the consortium can start pulling away the company's giant customers--and that has yet to happen.
"Akamai is the one defining what content delivery is," Christy said. "They're the one working with the largest (content) providers."
News.com's Corey Grice contributed to this report.