THE DAY AHEAD: Akamai could cache in on the election hubbub

Larry Dignan
3 min read

COMMENTARY -- While investors ponder what stocks would do best under an Al Gore or George W. Bush presidency, at least one tech company is looking pretty good as Web traffic soars for political sites. That company, Akamai (Nasdaq: AKAM), is getting quite a marketing pitch from the political hubbub.

You must have noticed that most of the general news sites were buckling under record traffic as Webheads searched for the latest election results Tuesday night. Some sites were still sluggish through Wednesday as folks looked for the latest on the recount of Florida votes.

Enter Akamai, which basically provides software and services to speed sites up.

At a recent investment conference, Akamai CFO Tim Weller said the company's primary job is moving the content closer to the user based on what information is most popular. Weller reckons Akamai can boost performance by a multiple of 10 by using snazzy mathematical formulas and moving caching content.

Sounds impressive, but the technology doesn't mean squat unless it performs well in crunch time. Akamai delivered and could use this election as a marketing pitch. Why? Web sites that used Akamai actually worked when it counted most. MSNBC.com, Drudgereport.com and others were hit by outages, and none of those sites were Akamai customers, according to the company's list of big-name clients.

An unscientific spot check -- basically my Web surfing -- showed that CNN.com was among the most reliable sites on Election Day. It's no surprise that CNN.com recorded new traffic records. CNN.com is also a big Akamai customer, as is Washingtonpost.com among other key political sites.

Voter.com was working with Akamai for a few weeks before Election Day, but suffered an outage for about an hour because the company guessed wrong on peak loads, said Ben Miller, chief technology officer for Voter.com. The company had expected traffic to grow 30 times usual levels, but Webheads flocked to the site at a much higher rate.

After Voter.com went down, it called in Akamai, which basically moved the whole site to its network to handle the demand. Miller said Voter.com was "rearchitected" on the fly and users didn't know the difference.

What do these little anecdotes mean for Akamai's bottom line right now? Not much -- the company is expected to lose money through 2001 at least. But the election has given Akamai a good case study to land new customers and develop additional revenue streams.

Other Washington-meets-Wall Street observations:

  • Yahoo! (Nasdaq: YHOO) -- The portal, primarily known as an aggregator, made a big election news splash and benefited because its site actually worked.

    Yahoo, another Akamai customer, will inevitably point to the election as a huge traffic generator for the fourth quarter. Now all Yahoo has to do is monetize its newshounds.

  • Microsoft (Nasdaq: MSFT) -- Under conventional wisdom, Microsoft shares have been rallying based on speculation that Bush would win the election and call off the antitrust dogs. Tech-head Gore may not be all that hip on breaking up Microsoft either.

    Shares could also be up for another reason -- Windows 2000 sales are improving. Lehman Brothers analyst Mike Stanek boosted his price target to $115 from $85 on Windows 2000 optimism. Hmmm.

  • RealNetworks (Nasdaq: RNWK) -- RealNetworks stock options have fueled a tight race in Washington as Democrat Maria Cantwell dukes it out with Republican Slade Gorton. Cantwell used her RealNetworks stock options to bankroll her campaign against Gorton, who has raked in dough from Microsoft.

    Gorton, who has spoken out for Microsoft in its antitrust trial, remains neutral when it comes to RealNetworks software. Gorton's site provides audio clips using RealNetworks and Microsoft's media player.

  • Keynote Systems (Nasdaq: KEYN) -- Nothing like some Web outages and a big news event to get some press. Whenever there's a big Web event, Keynote, which monitors performance, gets quoted a lot.

    And considering Keynote is trading at about 23 -- light years from a high of 177 -- any press is good press.TDAIN

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