Akamai close to being acquired by Google(reuters.com)
reuters.com
Akamai close to being acquired by Google
http://www.reuters.com/article/2011/10/12/akamai-google-idUSN1E79B1TA20111012
17 comments
[Glad others have pointed out this acquisition is probably false rumor.]
Maybe if you're a startup being acquired by bigco, it is a feather in your hat. A bigco being acquired by another bigco is a failure for acquiree and not something to crown yourself about.
Maybe if you're a startup being acquired by bigco, it is a feather in your hat. A bigco being acquired by another bigco is a failure for acquiree and not something to crown yourself about.
His legacy lives on in the Danny Lewin Best Student paper award at STOC, the premier theory conference. Here's a list of awardees: http://sigact.org/Prizes/Student/
Apparently not:
http://www.bloomberg.com/news/2011-10-12/google-is-said-not-...
Google Inc. (GOOG) isn’t planning to acquire Akamai Technologies Inc. (AKAM), two people familiar with the matter said, countering a report in Business Insider that fueled speculation a takeover may be imminent.
Google Inc. (GOOG) isn’t planning to acquire Akamai Technologies Inc. (AKAM), two people familiar with the matter said, countering a report in Business Insider that fueled speculation a takeover may be imminent.
The tables have turned: this Reuters story is just rehashing Business Insider, which broke the story earlier:
http://www.businessinsider.com/google-move-2011-10
BI's version actually has more background and analysis, in addition to being the source.
http://www.businessinsider.com/google-move-2011-10
BI's version actually has more background and analysis, in addition to being the source.
How is this good for Google? Akamai is rarely used by Google, but used by Microsoft/Apple/Facebook. Something seems dirty about a Google acquisition.
Remember Google acquired ITA Software-- it was used by all the sites like Kayak/Bing and the others (American Airlines, Southwest Airlines, United Airlines, Continental Airlines, Orbitz) who buy traffic from Google. Google bought Picnik because Flickr used it. Google bought Global IP Solutions used by Yahoo, AOL, WebEx and Lotus.
It seems like these are clearly anti-competitive moves meant to put their competitors at their mercy.
It seems like these are clearly anti-competitive moves meant to put their competitors at their mercy.
You could see where Google would use ITA, and it made sense. Search engines are turning into more than just listing websites.
With Akamai, not so much.
With Akamai, not so much.
diversification is dirty? Really?
I mean buying a company that serves your competitors' content.
And yes, diversification is also dirty. Diversification is the worst reason for companies to merge. If I wanted to own both Google and Ackamai, I could just buy shares in both companies. Investors should be responsible for diversification. There must be a reason that the combined companies are worth more for this acquisition to make sense. My thought is this will create negative value because major customers (MS/Apple/Facebook) don't want Google to see their traffic logs.
And yes, diversification is also dirty. Diversification is the worst reason for companies to merge. If I wanted to own both Google and Ackamai, I could just buy shares in both companies. Investors should be responsible for diversification. There must be a reason that the combined companies are worth more for this acquisition to make sense. My thought is this will create negative value because major customers (MS/Apple/Facebook) don't want Google to see their traffic logs.
So, Larry Page wants to own Google and Akamai, he's already got plenty of google stock and a bag of money, and he's decided to buy shares in the other company.
Why should he not be allowed to diversify but you would be? Companies can invest in other companies, the shareholders diversify indirectly. And if you don't agree, you can always sell your google stock.
If MS/Apple/Facebook don't want google to look into their kitchen then they are of course entirely free to set up their own CDNs, and if they leave and you think that this will create negative value you can make a killing by shorting the stock.
I'm not brave enough for that though, and I don't presume to know which way that will go.
Why should he not be allowed to diversify but you would be? Companies can invest in other companies, the shareholders diversify indirectly. And if you don't agree, you can always sell your google stock.
If MS/Apple/Facebook don't want google to look into their kitchen then they are of course entirely free to set up their own CDNs, and if they leave and you think that this will create negative value you can make a killing by shorting the stock.
I'm not brave enough for that though, and I don't presume to know which way that will go.
>> So, Larry Page wants to own Google and Akamai, he's already got plenty of google stock and a bag of money, and he's decided to buy shares in the other company.
There is a pretty significant difference between Google buying Akamai with it's money and Larry Page buying it with his.
There is a pretty significant difference between Google buying Akamai with it's money and Larry Page buying it with his.
> if they leave and you think that this will create negative value you can make a killing by shorting the stock.
No you can't. Even if it turns out to be a disaster, it will only impact Google's stock price by roughly 5%. $5B is just noise in Google's market cap.
No you can't. Even if it turns out to be a disaster, it will only impact Google's stock price by roughly 5%. $5B is just noise in Google's market cap.
Google bought (among others) DoubleClick, which was a direct competitor and served google's competitors. Or the ITA acquisition.
Akamai has a large patent portfolio for streaming and content delivery and a long list of top-tier customers.
Akamai has a large patent portfolio for streaming and content delivery and a long list of top-tier customers.
Akamai's market cap is $4.3B, which means Google would have to drop at least that (but really much more) to acquire them. Something tells me Google's investors are going to go bananas (not in a good way) if this goes through, especially on the heels of their Motorola Mobility acquisition.
Seems like a good fit seeing as "20% of the world's Internet traffic is delivered over the Akamai platform." (www.akamai.com/html/technology/visualizing_akamai.html).
Akamai & Google already have duplicate CDN/Endpoint infrastructure (albeit Akamai's is a CDN platform and Google just delivers for their properties). Akamai has something like 61k servers in most (if not all) major datacenters/ISPs and key peering agreements. Major overlap.. DNS/HTTP(s)/Streaming(youtube)/Data Mining, etc. This could possibly be a big revenue boost for Google in that they consolidate existing peering agreements, etc. and consolidate servers within the last couple miles. Google already does many of these things but it is Akamai's sole business and they do it very well! Probably a big win for Google to have the talent and relationships that Akamai already has. Akamai customers benefit from Googles infrastructure & people.
Edit: context + grammer
Akamai & Google already have duplicate CDN/Endpoint infrastructure (albeit Akamai's is a CDN platform and Google just delivers for their properties). Akamai has something like 61k servers in most (if not all) major datacenters/ISPs and key peering agreements. Major overlap.. DNS/HTTP(s)/Streaming(youtube)/Data Mining, etc. This could possibly be a big revenue boost for Google in that they consolidate existing peering agreements, etc. and consolidate servers within the last couple miles. Google already does many of these things but it is Akamai's sole business and they do it very well! Probably a big win for Google to have the talent and relationships that Akamai already has. Akamai customers benefit from Googles infrastructure & people.
Edit: context + grammer
Akamai's footprint exceeds 100k servers worldwide now, and that's just what they publicly disclose. It is likely more if you count in their DoD contracts. They're probably on par with Google now.
Could this mean Google will offer a file storage and CDN like AWS? What benefit could Akamai provide to Google besides more infrastructure? I'm sure Google could enhance their infrastructure without paying a premium.
They already do. http://code.google.com/apis/storage/
I came to know recently that Google had plans to use services of Akamai. When agreement could not be reached on the pricing, Google came up with its own content delivery network. Now this acquisition. Puzzling.
I do not believe this to be factually correct. Unfortunately, just as this guy can't list his sources, I can't explain why I believe this to be factually incorrect (in the letter and spirit).
My source is one of my professors. He told this to the class while talking about CDN.
A lot of traffic runs through Akamai.
Google can mine that data and use it in their core product, the search engine.
Google can mine that data and use it in their core product, the search engine.
Akamai already mines that data for their ad network.
http://www.akamai.com/html/solutions/ads/acerno.html
http://www.akamai.com/html/solutions/ads/acerno.html
Larry's on a spending spree.
Does Microsoft still run their sites on Akamai? I know Facebook does.
A lot of corporations use Akamai, Microsoft included -- http://www.akamai.com/html/customers/customer_list.html.
Interesting enough, the only name missing from that list? Google.
This is not really surprising. Infrastructure is a key competitive advantage of Google, and they prefer to build their own stuff (including CDNs) instead of outsourcing it.
Yes, so the combination of Google + Akamai would be big enough to trigger anti-trust concerns, I would imagine.
Given that Google is barely in the infrastructure market (they mostly just have a ton for their own uses), I don't see how Google + Akamai would be any less competitive than Akamai on its own.
I guess there could be some issues since this makes Google's competitors in other markets reliant on them, but from a "too much good infrastructure in one company" standpoint, I don't see how there would be anti-trust concerns.
I guess there could be some issues since this makes Google's competitors in other markets reliant on them, but from a "too much good infrastructure in one company" standpoint, I don't see how there would be anti-trust concerns.
So why would they want to buy Akamai?
Probably to get into the CDN business. Making the web faster is one of Google's strategic goals, and they try to achieve it by many different means.
Google is essentially its own CDN: http://www.datacenterknowledge.com/archives/2010/03/18/googl...
Why would they want to make other sites on the web faster?
Why would they want to make other sites on the web faster?
Google has always wanted to make web faster. See http://code.google.com/speed/articles/ . And I'm sure you know about various Google tools (including Chrome) that try to speed up web.
They rely very heavily on web, and it's absolutely important for them to speed up web for people to keep moving away from native.
They rely very heavily on web, and it's absolutely important for them to speed up web for people to keep moving away from native.
This is a platform, you can just buy them:
http://news.ycombinator.com/item?id=3101876
http://news.ycombinator.com/item?id=3101876
Anyone who takes anything Business Insider says seriously is a fool.
Scary...
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If they do this deal it's because they see Amazon as a threat.
Looks like Facebook is going to need to find another CDN...
If the deal goes through, it may require Facebook to take a different approach with their CDN strategy. They will probably either begin to roll their own (given their size and budgets), or move to a blended environment where they utilize multiple CDNs based on region and traffic levels.
For example, Apple historically has used Akamai for their content delivery, but as of around ~2009, they began to use Limelight in conjunction with Akamai. Just today with the iOS 5/OS X updates, I noticed at home in Los Angeles that the delivery from Limelight was terrible. I tried it again about an hour after release, and I was then being sent to Level3.
Suffice to say, Apple is now using three CDNs.
For example, Apple historically has used Akamai for their content delivery, but as of around ~2009, they began to use Limelight in conjunction with Akamai. Just today with the iOS 5/OS X updates, I noticed at home in Los Angeles that the delivery from Limelight was terrible. I tried it again about an hour after release, and I was then being sent to Level3.
Suffice to say, Apple is now using three CDNs.
to whoever saw fit to downvote this: I hope that people will still remember your name a decade after you die through no fault of your own when you co-found a company as successful as Akamai.
http://en.wikipedia.org/wiki/Daniel_M._Lewin
The man was a true hero as far as I'm concerned.