Web content delivery competition increases

Sensing an opportunity to profit from caching, Web content management vendor Inktomi Corp. and a group of other information distribution companies have announced an alliance designed to speed the delivery of Web content by pushing it closer to end users.

The alliance, called Content Bridge, aims to create an approach whereby producers and hosters of information and e-commerce functions can pay a single intermediary – Adero Inc. in Boston – and have their content pushed to the caching servers of large Internet hosting, content delivery and access providers. These providers, which are also members of the alliance, include San Francisco-based Digital Island Inc., Exodus Communications Inc. in Santa Clara, Calif., and America Online Inc. in Dulles, Va.

Following the announcement, Inktomi’s stock price jumped nine points to close at 120.75 per share and then surged to 128 just before the market closed Aug. 30.

The success of Content Bridge will hinge on the pricing and integration of the various services, said analyst Martin Pyykkonen at CIBC World Markets in New York.

Foster City, Calif.-based Inktomi is the catalyst of the group, Web infrastructure provider Adero does the grunt work and content delivery companies like Digital Island are trying to figure out what kinds of value-added services they can offer, Pyykkonen noted.

The alliance is a bold move, but it will take a while to really integrate the capabilities of the group’s members, predicts analyst Robert Fagin at Bear, Stearns & Co. in New York.

Fagin says Content Bridge could compete with leading content distribution vendor Akamai Technologies Inc. in Cambridge, Mass. Akamai colocates its special caching servers in the facilities of 225 large Internet service providers in 50 countries and sells the content delivery function as a service to Web hosting companies.

Akamai’s stock price dropped four points to close at 65.19 per share Aug. 24, the day after the Inktomi announcement. But it moved back up to 72.50 in late trading Aug. 30.

“I don’t see any near-term threat [by Content Bridge] to Akamai,” Fagin said.

The week after Inktomi’s announcement, San Jose-based Cisco Systems Inc. also jumped on the bandwagon with an organization called Content Alliance that, interestingly enough, includes one of Akamai’s biggest customers, PSINet Inc. in Ashburn, Va., as well as Digital Island and Genuity Inc. in Burlington, Mass.

Cisco spokeswoman Erica Schroeder said Content Alliance will focus on creating a set of open standards for content delivery and reporting, which it hopes to submit to the Internet Engineering Task Force in December.

Content Bridge’s focus is on building a content merchandising system.

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