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IPO Preview: Akamai stars, JNI and InterTrust also on deck

It's got new technology. It comes from MIT. And it's slated to go public in a week when the Fed isn't terrorizing the markets.

Akamai (Proposed ticker: AKAM), slated for its IPO this Friday, is the week's most promising debut. Or at least it has the most promising partners: Cisco has a $50 million stake, and Microsoft has a $15 million investment in the company with a mathematical algorithm that makes the Web faster.

Akamai's FreeFlow service finds space for its websites on multiple servers, which speeds up Web site downloads and protects against crashes caused by excess demand. Using software based on its proprietary algorithms, Akamai monitors Internet traffic and delivers content by the most efficient route.

Morgan Stanley is the lead underwriter for the offering of 8 million shares, Donaldson Lufkin & Jenrette and Salomon Smith Barney are the co-managers. Shares are expected to price between $16 and $18 each.

Akamai's customers, including Apple Computer, CNN Interactive, Discovery Channel Online, Infoseek, J. Crew.com, The Motley Fool and Yahoo!, operate some of the busiest Web sites.

"It's in a new technology category," which is bound to make it hot, said Francis Gaskins of the IPO Desktop. Gaskins compares Akamai to Inktomi, the main player in a market predicted to grow from $2 billion to $23 billion by 2002 according to International Data Corporation.

This past August, Akamai formed an alliance with Cisco Systems to develop new routing, switching and caching technologies to improve content delivery. As part of the deal, Cisco took a $49 million stake in Akamai.

Inktomi's recent move to buy content distribution and tracking software company WebSpective Software may be an attempt to keep up with Akamai as it gets a boost of IPO funding.

Inktomi had $25.3 million in revenue in the first half of its fiscal year, which ends this month, while Akamai had just $404,000 in revenue, and a net loss of $9.7 million in the six months ended June 30.

  • JNI Technologies (Proposed ticker: JNIC) , which should make its initial public offering Wednesday, is "riding a growth curve in fibre channel" -- and should fare comparably to Crossroads, which quadrupled in its IPO. "Its revenue growth is on a hockey stick, the likes of which you see in the storage area network growth category," Gaskins said.

    The company had revenue of $25.8 million for the nine months ended Sept. 30, versus $6.9 million in the previous year. And it actually posted a profit -- JNI had $2.2 million in net income for the nine-month period.

    Estimated price range for the 4.9 million share offering is $12 to $14 a share. Donaldson Lufkin and Jenrette is the lead underwriter, Bear Stearns and Hambrecht & Quist are co-managers.

    The company designs fibre channel hardware and software products to connect servers and data storage devices to form storage area networks, or SANs. IDC forecasts that the market for products based on fibre channel technology will grow from about $2 billion in 1998 to $15 billion by 2002.

  • InterTrust Technologies (Nasdaq: ITRU) is a "more speculative deal," Gaskins said. It only had $309,000 in revenue for the six months ended June 30. It's also in a new category, but is still in the developmental stages.

    The company's digital rights management technology helps protect download and distribution of any information that can be put into digital form, such as music, videos, software, games, publishing, business information, and images.

  • Other tech fare slated to go public this week includes Ectel Ltd. ( Proposed ticker: ECTX), Viador (Proposed ticker: VIAD), Predictive Systems (Proposed ticker: PRDS), Allied Riser (Proposed ticker: ARCC), and WorldQuest Networks (Proposed ticker: WQNI).