For years, bears have assumed that at some point, Google (Nasdaq: GOOG ) would use its worldwide network to disrupt Akamai Technologies (Nasdaq: AKAM ) . That day may have finally arrived.
According to Ars Technica, a group led by Google and several Akamai competitors has devised a new extension to the domain name server, or DNS, protocol. In effect, it would allow any server fielding routing requests to more accurately pinpoint a geographic destination before delivery, thereby eliminating the need for Akamai's algorithmic magic.
The idea is creepy in a way. Proponents are seeking to add users' IP addresses -- the multi-digit numbers that determine the name and location of a computer -- to web requests. Think of the customer service agent who asks for your phone number in "order to serve you better."
To be fair, it's not clear that this sort of inside-out routing would outperform a content delivery network, or CDN, like Akamai's, since both approaches seek to reduce the distance that data must travel to reach users. Yet just having this capability widely available could give customers leverage in negotiating usage agreements, crimping profits among the major CDN operators.
Akamai could take the biggest hit, but it's possible that the new system might also hurt beleaguered Limelight Networks (Nasdaq: LLNW ) and Level 3 Communications (Nasdaq: LVLT ) . None of these top CDN providers is participating in the DNS makeover as of this writing.
What's your take? Do you believe the addition of smarter routing to the DNS protocol will make a difference? Weigh in using the comments box below. You can also keep tabs on the CDN market by adding these stocks to your watchlist: