Tuesday, April 18, 2006

Blog of the Week: MarketMoneyLetter.com

Watch Akamai Fly!

Shares of Akamai are up more than 50% in 2006 and I don't think the run is over. Investors with a short term time horizon could be interested in "riding" the momentum in Akamai's shares. This equity is a classic "story stock" and I don't think the valuation is too extreme, yet.

Akamai's customers are drawn to the company because they are able to use their existing technological infrastructure. In doing so, customers spend less money than they would if they were building their own infrastructure, in entirety.

Akamai made a transformation in 2004 in beginning to focus on the growth in a specific media and entertainment niche on the net at a time when streaming content began occurring in many media companies. Thus, the media delivery services business was born. Companies interested in streaming their content via Akamai's technologies do not face server and bandwidth limitations, and Akamai can better handle peak traffic and large file sizes. In 2005 Akamai acquired Speedera Networks in a merger transaction. In doing so, Akamai added both clients and services to their growing media delivery services segment of business.

Akamai is the dominant player in the media delivery services business, as can be demonstrated by the company's name often appearing in conjunction with announcements of media companies bringing content online.

Here are some example...

Link

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