Internet content and applications delivery company Akamai Technologies (Nasdaq: AKAM) said today that it has doubled its customer base to 200 Web properties in the past six weeks, and has added a number of household names in the process.
The Cambridge, Massachusetts-based company said that its FreeFlow delivery service has attracted, among others, drugstore.com, RedHerring.com, Time and Adobe Systems in recent weeks.
These companies join the ranks of existing Akamai customers, which include Yahoo!, Apple, Microsoft, About.com, CNN Interactive, marthastewart.com, Nasdaq, The Motley Fool and Lands’ End.
Akamai said that its client list now includes seven out of the top 10 major search sites, over 75 e-tailers and e-commerce sites, many of the most heavily-trafficked Internet news sites, 10 financial sites and 20 Web sites that are dedicated to software downloads.
Tough Act To Follow
While adding many more customers is certainly good news, it will be hard for Akamai to top 1999. The company, whose name means cool, clever and intelligent in Hawaiian, went public in October and sent shock waves through Wall Street when its share price skyrocketed from $30 (US$) per share on opening day to close at $174 per share. It was the fourth-largest single day gain in U.S. stock market history.
Akamai, however, is a poster-boy for all that many analysts believe is wrong with Internet stocks. The company zoomed to a market capitalization of about $8 billion on its first trading day even though at the time it had reported revenues of $1.2 million for the nine months ended September 30, 1999, according to its S-1 filing with the Securities and Exchange Commission (SEC).
Since opening day, furthermore, the stock has jumped to the $280 range, which has made many analysts shake their heads even more.
Why The Incredible Value?
What is it about Akamai that gives it such an incredible value? The company has what many consider to be the best technology on the market for optimizing Web sites to deliver content to customers. Faster delivery of content, of course, translates to happier Web surfers, which translates to more sales and customer satisfaction.
The company has bolstered their service by offering a money back guarantee if it fails to deliver on its promise.
Akamai’s technology has resulted in strategic alliances with Microsoft, Apple, Novell and Cisco Systems, amongst other stellar technology names. Akamai has also developed a network of 1,700 servers in 30 countries across more than 100 telecommunications networks.
While Akamai has the right pedigree — its founders were professors and students from MIT — and has some powerful alliances, it remains to be seen whether its technology will generate enough revenues and earnings to justify its spectacular market capitalization.