On Monday, a Jefferies & Co. analyst suggested in a note to clients that Akamai was seeing weaker demand as the result of "macro headwinds."
Specifically, analyst Katherine Egbert alleged that Akamai didn't meet its Q1 bookings targets, and that it may be forced to pay rebates to media customers who suffered lighter-than-expected traffic. Shares of Akamai fell more than 2% following the report.
But Egbert may have been overstating what, if any, trouble Akamai faces. For example, a key claim in her analysis -- that Akamai's application acceleration platform was down for a substantial period of time in Q1 -- was refuted within hours of publication.
We'll know whether she was right in other areas when Akamai reports earnings on April 30. For now, let's focus on what we do know -- that, for as much as Egbert speculates doom for Akamai, its competitors are quantifiably suffering.
Consider Limelight Networks (Nasdaq: LLNW ) . Two months ago, the company lost the first round of its patent battle with Akamai. This week, board member Alan Kaplan asked not to stand for re-election at the company's forthcoming annual meeting.
Internap (Nasdaq: INAP ) , meanwhile, appears to be on the hook for rebates to customers it acquired from VitalStream. Level 3 (Nasdaq: LVLT ) is struggling with personnel issues. And low-cost newcomers are borrowing from Limelight's about-to-be-outlawed network design.
Egbert may, indeed, be correct with most of her conclusions. But if she is, it'll be because the economy has regressed so far, so fast, that even top businesses are taking a short-term hit.
So be it. More important to me is what Egbert didn't say. She's not alleging that Akamai's durable competitive advantage -- the algorithm and enhanced services that preserve its right to charge a premium in a market filled with low-cost rivals -- is in any way in danger.
But of course she couldn't -- because it isn't.
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