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Why Akamai Technologies Shares Roared Higher

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What: Shares of Akamai Technologies (Nasdaq: AKAM  ) roared higher today by as much as 11%, after the company said it had partnered with AT&T (NYSE: T  ) to provide content delivery network, or CDN, services.

So what: That addresses fears that AT&T would launch its own competing CDN, which is certainly good news for investors. The possibility of carriers erecting their own CDNs has been a possible threat for some time. The pair said they would be focusing first on the North American market, but will subsequently expand within the next year or so.

Now what: Akamai will be deploying its CDN servers within AT&T's network infrastructure, boosting efficiency of its delivery services. AT&T is planning to transfer its current CDN operations to Akamai's platform next year. The two companies will share certain resources, like technical support and customer service. The deal isn't expected to affect Akamai's earnings in fiscal 2013.

Interested in more info on Akamai Technologies? Add it to your watchlist by clicking here.

 

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Evan Niu
TMFNewCow

Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.

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