Akamai’s Back

One of the hottest stocks from the Internet Craze is popular again. Akamai Technologies (AKAM) went public in 1999 at $26 a share. Within a few weeks, the stock soared to $327.
The stock soon became as hated as much as it was loved. By 2002, it reached just 67 cents a share. But now the sun is shining again on Akamai. It was just added to the Nasdaq 100 index.

Akamai has been telling the same basic business story since it went public: The company can manage Internet traffic for its customers with an army of computer servers placed strategically all over the world. Proprietary software and algorithms route heavy traffic to those other servers to shorten the trip or avoid jams when a customer’s online material is so hot everyone wants to see or hear it at the same time.
Akamai’s business picked up and the stock story came back into favor thanks to the boom in broadband Internet service. Fast connections available to the masses have created an explosion of demand for audio and video services, containing much more digital information that has to be moved through the Internet’s electronic pipes.
“Clearly we are all doing things that were a lot more difficult and tedious before we got broadband Internet,” says technology analyst Tony Ursillo of the Boston investment firm Loomis Sayles & Co., which owns Akamai stock. “That’s opened up the doors for a lot of this content to be available to a broader audience and driven additional needs by those content providers. It’s driven them straight into Akamai’s arms.”

Posted by on May 3rd, 2006 at 9:20 am


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