-- Tom Taulli, five minutes ago
That's exactly right, Tom. You know who else broadcast March Madness? Limelight Networks. It says it split duty 50-50 with Akamai (Nasdaq: AKAM ) to help CBS Sportsline serve up a healthy plate of games for hungry fans.
What's more, broadband growth -- which Tom cites as a catalyst -- is goodness for the entire industry; Akamai is just one of the beneficiaries. Streaming-media specialists such as Limelight and VitalStream (Nasdaq: VSTH ) could benefit even more from an explosion of broadband connectivity.
The network is the advantage?
Now let's get to the meat. Tom says that Akamai's real advantage is its massive network. That's true, but only if you're talking about static Web content. In digital media, Limelight has a global footprint that's bound to expand, given the $130 million in funding it just received. If the size of Akamai's server farm is its key advantage, don't expect it to last long. (Incidentally, I don't believe it is -- I believe Akamai's edge is its patented algorithms for directing Web traffic. Hence the lawsuit with Limelight.)
Streaming or screaming?
As I've said before, Akamai remains a Rule Breaking business in an explosive market. But as much as Tom is correct about the beauty of its business model, the plain truth is that it's about to get much harder for Akamai to earn customers. Only a small-f fool wouldn't factor that reality into Akamai's valuation. When you do, you may find that there's little short-term opportunity in these shares, and that the buy-to-hold investors may be able to wait for a cheaper entry point.
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Despite the bearish doldrums, Fool contributorTim Beyersremains a happy Akamai shareholder. You can find out what else is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.