The outlook for the company continued to look rosy in , but as the tech sector began to sour, along with the economy in general, Akamai got caught up in the downward spiral when the dotcom bubble began to burst.
The company had quickly ramped up its hiring and bought a lot of real estate, only to see a large percentage of its customers going out of business, unable to afford its service, or delaying investments. During the first half of Akamai lost more than 12 percent of its recurring contracts. The price of its stock began to plummet as a result, and the company was forced to make deep cuts in staffing and to terminate leases.
Akamai eventually bottomed out in , worth little more than 50 cents per share. The year also was marked by personal tragedy. Ironically, the act that cost his life also demonstrated the value of the Internet trafficking system he helped to develop, as the Internet was besieged with requests for information from people keeping track of events and Akamai's customers were able to cope with the spike in demand.
Although the company continued to lay off staff in the remaining months of , its performance on September 11 led to an increase in customers and played a significant role in Akamai beginning to rebound in Akamai launched a new product in , EdgeSuite, and began targeting large companies interested in establishing a significant web presence.
EdgeSuite was essentially a more robust version of FreeFlow: combining the earlier dynamic traffic control features with added security features, increased speed on digital downloads, and the ability to deliver streaming media. Akamai was also successful in attracting government customers, selling EdgeSuite to the Federal Bureau of Investigation FBI , whose web site had experienced an increased level of traffic after September As a preferred government vendor, Akamai also began selling its services to other federal government customers, such as the U.
House of Representatives, who used Akamai to stream hearings on the Web. Despite this success, there was still more bitter medicine to be swallowed in , as the company continued to shed workers.
Employment that crested at 1, in stood at at the end of The company was also the recipient of unwanted publicity when it was disclosed by the Boston Globe that Akamai was using college servers to deliver content from teen-pornography web sites and help offshore gambling sites to speed content delivery.
Few people had realized that Akamai's system of spreading Internet content to geographically advantageous servers relied on college servers as well as company-owned servers. Schools benefited from the relationship because they gained faster Internet access and paid less money for more bandwidth. At first Akamai downplayed the controversy, maintaining that pornography and gambling represented less than 1 percent of its revenues and that it was not going to renew contracts with online gaming companies and no longer sought new business from what a spokesperson referred to as "adult content sites.
The reasons for renewed investor confidence included Akamai's cost-cutting measures, increasing sales, and a restructuring of debt that took place in The outlook was also brighter because the market was beginning to come to the company, which had been criticized for overbuilding a network, intended for a much larger Internet of the future. But with the rising use of streaming technology to deliver music, movies, sports, and software, Akamai now found itself well positioned to service customers looking to take advantage of this demand.
One nettlesome concern for Akamai that continued to trouble the company in was its involvement in costly litigation to protect intellectual property.
Akamai won a patent infringement suit in But in that same year, Akamai became embroiled in a patent dispute with Santa Clara, California-based Speedera Networks, with both parties trading lawsuits and countersuits.
Akamai accused Speedera of stealing trade secrets, while Speedera called Akamai a legal bully. In March both sides were weary of the distraction and the legal costs and, after six months of negotiations, agreed to settle their differences by joining forces.
In an odd way, the litigation was a benefit. Penenberg, Adam L. Toggle navigation. Akamai Technologies, Inc. Company Perspectives: Akamai has transformed the Internet from a chaotic network into a predictable, scalable, and secure business platform. Key Dates: Dr. Tim Berners-Lee issues a challenge to speed up the Internet. Other articles you might like:. User Contributions:. Comment about this article, ask questions, or add new information about this topic: Name:.
E-mail: Show my email publicly. Human Verification:. Public Comment: characters. Send comment. Air Products and Chemicals, Inc. The company has an opportunity to assist with training initiatives in digital skills and to improve school connectivity for vulnerable and under-represented groups. Akamai should demonstrate how it meets best practice in assigning senior-level oversight and accountability for cybersecurity and in reporting security incidents.
As a digital company with a role in managing a significant share of global data flows and security expertise, Akamai should make a high-level commitment to online safety for children.
The company could better demonstrate how it supports technology innovation ecosystems, collaborates on sustainable development research, and applies inclusive and ethical research and development.
Access No evidence could be found of leading practices in this area. Skills No evidence could be found of leading practices in this area. Use Akamai follows industry norms for monitoring and responding to information security incidents.
Innovation Akamai demonstrates support for open innovation by sharing source code. Access Little evidence was found of activities to make digital technologies widely available, affordable and accessible. Skills No evidence could be found that the company supports digital skills development and school connectivity.
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