[CNET] AOL and Inktomi fire a shot across Akamai's bough

Date view Thread view Subject view Author view

From: Adam Rifkin (Adam@KnowNow.Com)
Date: Wed Aug 23 2000 - 19:45:15 PDT

[Linda, you're probably right that today's CMGi action was a minor short
I haven't watched the markets in so long, I forgot what those look like! :)

Still, what's up with the S&P Midcap and NYSE Composites making new
all-time highs today?

And what's with stocks like Intel, Sun, Corning, GE, Boeing, Ciena, Broadcom,
Advanced Micro Circuits, Newport, Schlumberger, Apache, and Juniper making
new all-time highs this week?

And what's with utility stocks going through the roof?

And why's the Nasdaq up 26% in the last three months?

It's like no one recognized that there was this gigantic crash in March
through May.
Except, of course, for the Internut stocks, which are "mostly dead".
And Microsoft, which is "resting" at a PE of 41.

By comparison Cisco's PE is 186 and Intel's is 56.
Gadzooks, GE now has a market cap of $574 billion and Intel's is $501 billion!
Cisco has fallen to #3 at $472 billion and poor Microsoft is a meeger $372
Citigroup is within epsilon of a new all-time high at $339 billion.
Exxon-Mobil is closing in on 300 units, currently hovering at $294 billion.
Today Sun passed $200 billion for the first time today. . .
and is closing in on Oracle @ $235 billion. In between 'em is Walmart at
$219 billion.
AOL ($135b) and Time Warner ($113b) will catapult to a $248 billion
behemoth if allowed.

So those 10 companies (GE, INTC, CSCO, MSFT, C, XOM, SUNW, ORCL, WMT, AOL/TWX)
now have a combined market cap of . . . (said in a Dr. Evil voice) . . .


I need a cigarette.

Meanwhile, back at the ranch, Inktomi and AOL declare war on Akamai:


So http://www.content-bridge.com/ is opening in October at an Internet
near you...
Silly Inktomi, don't you know people can't get excited about flat, dumb static
HTML pages being delivered quicker? Give us STREAMING and REAL-TIME
and then *maybe* we'll be happy little lawnmower people for you... -- Adam]

AOL, Inktomi lead coalition aimed at Akamai
By John Borland
Staff Writer, CNET News.com
August 23, 2000, 12:20 p.m. PT

A new consortium of companies led by America Online and Inktomi took
aim today at the content distribution business that has been dominated for a
year by upstart Akamai Technologies.

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."


[Ray] Ozzie said that is one reason he went off on his own,to have time to work on something big without the pressure of being a public company. "You can't be under a microscope, or be forced to ship before you have flushed out your idea. [At Groove Networks] it's been about 18 months now and we're not there yet. [New products] need that space; this is not a cookie-cutter thing." Ozzie will not say what Groove Networks, situated in a renovated shoe factory, is working on. He will say he is still big on helping people work together and using technology to ease communication. "What gets my juices going is technology in general. PCs are immensely powerful . . . wireless, telecom are taking off." -- http://www.crn.com/sections/special/hof/hof.asp?ArticleID=11161

Date view Thread view Subject view Author view

This archive was generated by hypermail 2b29 : Wed Aug 23 2000 - 19:52:52 PDT