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Technology Stocks : Digital Island,Inc - (Nasdaq- ISLD) -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (428)	10/25/1999 8:37:00 PM
From: Kimberly Lee	Respond to of 1884

Top IPO pick of the week, Akamai Technologies (Nasdaq:AKAM) Offering: 8M shares, $16-18, tentative pricing on the evening of Oct 28 Business and technology: Akamai Technologies provides an Internet content delivery service that improves Web site speed and reliability and protects against Web site crashes due to demand overloads. Generally speaking, to enable data flow faster and more efficaciously across the Internet, companies have deployed 3 methods: Caching, Increased Bandwidth and or Outsourcing Server Management. Akamai has found an innovative way to expedite the transmission of data across the network. The company Akamai has developed its own proprietary network in which it houses specially tagged content from highly trafficked web sites. When a Web user accesses one of these web sites that has been "Akamaized", special mathematical algorithms quickly determine which one of Akamai's servers can deliver the content most quickly. Factors that determine which server can deliver the content most quickly include the geographical proximity to the Web user and the current traffic demands placed on each of the servers. Strategic partners: Akamai has established strategic alliances with some of the best run and most powerful technology companies in the world, including MSFT, CSCO and AAPL. The partnership with Cisco is especially alluring as the two companies have agreed to integrate Akamai's technology into Cisco's current networking products. Cisco has an enormous marketing reach that will enable Akamai to sell its products on a scale that it could have never done independently. Clever and viable revenue model: Akamai is compensated based on the amount of content that it delivers via its own Web servers. Accordingly, its revenues will grow as the Internet grows, which is a big plus given the growth potential of the Internet. In addition, this recurring revenue model has a very low associated cost to enable it: Akamai uses off-the-shelf, inexpensive components made by other companies to deploy its technology; large amounts of capital are not needed to upgrade any old networks or expand new ones. Unique Competitive Position. Currently, there is only one direct competitor to Akamai's product - formerly privately-held Sandpiper Networks, which enters into a merger agreement with Digital Island (ISLD) today; please see my posts on ISLD for further analysis of this powerful alliance. With a technology that is in extremely high demand, a lack of significant competition, and an enviable partnership with the strongest networking company in the world, the market will likely put a hefty premium on Akamai's shares. Underwriting team: Morgan Stanley, DLJP, Saloman Smith and Barney, Tommie Weisel - a formidable team. Expectation: Morgan Stanley will likely raise the offering price to 30, and I expect at least 200% premium at the open.