Stock Watch: Digital Island Rockets On Streaming Media Deal

Shares of Digital Island, which provides networking services for e-commerce businesses, rocketed more than 32 percent on Tuesday, climbing 6-1/8 to 25 after the company announced a deal with two big Internet players to build what the company bills as “the first global streaming media network.”

Digital Island will team up with streaming media leader RealNetworks and Internet infrastructure company Inktomi to create a network service that will give music and video distributors the ability to control distribution of their content by country. Digital Island will also integrate RealNetworks’ RealSystem G2 media delivery and distributed networking technologies, as well as Inktomi’s media-caching technologies, into its existing e-network services.

It’s been a roller-coaster ride for Digital Island, which has traded as low as 8-5/8 and as high as 40-7/16 since going public at $10 on June 29. Considering the dramatic surge on Tuesday, now might not be the best time to buy.

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