The deal, which gives Microsoft about a 1% stake in Akamai, values the one-year-old firm at a whopping US$1.4 billion, according to an inside source. Akamai offers services that speed delivery of Web pages, and the company has been capitalizing on growing concerns about Internet congestion.
Big investors are attracted to Akamai's proprietary software and network of about 1,200 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! Inc., CNN, retailer J. Crew Group Inc. and the Discovery Channel.
Last month, Akamai received a US$49 million investment from Cisco Systems Inc. and about US$12 million from Apple Computer Inc.
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.
