Microsoft invests $15m in Akamai
Published: 28 Sep 1999 10:24 BST
Microsoft agreed to invest $15m (£9.3m) in Akamai Technologies, adding another tech giant to the list of firms that have backed the fast-growing Internet start-up.
The deal, which gives Microsoft about a 1 percent take in Akamai, values the one-year-old firm at a whopping $1.4bn, this person says. Akamai offers services that speed delivery of Web pages, and the company has been capitalising on growing concerns about Internet congestion. Closely held Akamai announced the Microsoft investment Monday.
As part of its agreement with Microsoft, Akamai will develop a version of its computer-server software that can run on Microsoft's Windows NT operating system, which is primarily geared for business users. Until now, Akamai's software has run on Linux, a Unix-based operating system. The deal is important for Microsoft as it tries to aggressively position NT to compete with Unix.
Big investors are attracted to Akamai's proprietary software and network of about 1200 computer servers, which are designed to speed up the transmission of content from Web sites to computer users. Akamai's technology addresses a perennial problem -- lengthy download times for popular Web sites -- by shifting data to servers closer to users. Akamai's customers include the popular Web portal Yahoo!, CNN, retailer J. Crew Group and the Discovery Channel. Last month, Akamai received a $49m investment from Cisco Systems and about $12m million from Apple Computer.
Akamai was founded in August 1998, based on the initial work of a math professor at the Massachusetts Institute of Technology and one of his students. Last month, Akamai filed a registration statement with the Securities and Exchange Commission for an initial public offering.
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