Multimedia's Web Plumber; Never Heard of Akamai? Behind the Scenes, It's Critical to Getting Digital Music and Video to Your PC. It's Also a Company That 9/11 Almost Wiped Out
Stone, Brad, Newsweek
Byline: Brad Stone
Few companies ever had to endure the mix of turmoil and tragedy that converged five years ago on Akamai, of Cambridge, Mass. Founded in 1998 by MIT professor Tom Leighton and his graduate student Daniel Lewin, Akamai built a complex network of computer servers around the world and sold bandwidth to Internet companies that wanted their Web sites to load faster. When the bottom fell out of the Internet economy in 2000, Akamai's revenue sagged while its stock sank from the lofty triple digits to well under $1. Analysts, pointing to Akamai's debt, predicted the company would join many of its customers in dot-com oblivion.
Then came an even bigger disaster--for the company and the nation. On September 11, 2001, Lewin, a 31-year-old father of two and a former commando in the Israeli Army, boarded American Airlines Flight 11 to Los Angeles, which crashed into the North Tower of the World Trade Center. A portrait of Lewin now hangs in the company's headquarters; an apple tree was planted in his memory in a nearby courtyard. Ironically, Akamai executives say the seeds for the company's turnaround were also laid on that day. "His death gave a lot of people here the resolve to prove everyone wrong," says CEO Paul Sagan.
Were he alive today, Lewin would likely be enjoying Akamai's renewed success. In the past 12 months alone, the company's stock price has tripled and its quarterly profit has doubled. Akamai recovered by selling its services to big companies, not just risky start-ups. But if you've ever downloaded a song from iTunes, watched a live baseball game on MLB.com or streamed video clips from a TV-network Web site like NBC.com, you also contributed to its turnaround. Those digital files were sent to your computer not by Apple or any media company, but by one of Akamai's 18,000 servers, spread out around the world.
Akamai provides the plumbing for most of the digital music and video services now sweeping the Internet. Though the company has several smaller rivals--including peer-to-peer services, such as BitTorrent, which are trying to move away from allowing the controversial trading of copyrighted files--Akamai is by far the largest of the so-called content-delivery networks. It's primed to profit as the Web morphs from a static medium into a colorful amalgamation of newspaper, music store and TV network. "Akamai is sitting in the middle of a perfect storm," says Mike Goodman, an analyst at the Boston-based Yankee Group.
Behind its renewed vigor is the realization by major media companies that sending songs and video over the Net is not for technological neophytes. In the late '90s, many companies thought they could pipe digital media from one central source to any computer user, anywhere in the world. Most famously, Victoria's Secret's Webcast of its 1999 lingerie show, with partner Broadcast.com, resulted in overloaded servers, dropped connections and lots of bad press.
Akamai uses what's called a distributed system, improving performance and reducing the strain that fat digital-media files place on the Internet. Instead of sending millions of crisscrossing copies of each song all over the globe, Akamai essentially sends one version of every digital file to each of its servers, situated in the data centers of 1,000 Internet service providers. These souped-up computers contain special algorithmic software, which plots the fastest online path to each customer requesting a media file from his or her computer. …