FOOL'S DEN
Need Net Speed?

A common joke is that "www" stands for "world wide wait." The Internet is all too often excruciatingly slow -- not good for companies that rely on the Web. However, there is a new breed of fast-growing companies that offer products and services to greatly speed up the existing cyberspace infrastructure.

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By Paul Larson (TMF Parlay)
February 20, 2001

Are you tired of waiting for Web pages to load or hitting the "reload" button a bazillion times because websites seem to mysteriously disappear into the cyberspace ether? For all of its glory, the Internet can still be agonizingly slow. This sometimes terrible performance affects everyone involved with the Web. Certainly an annoyance to consumers, it can be a downright critical issue for companies that rely on the Internet for core operations.

The reason for the all-too-often slowdown is that the Internet was not originally designed to support hundreds of millions of simultaneous users. Moreover, there are literally thousands of different networks that make up the Web, not all of them fast or reliable. As a patchwork of diverse networks, the Internet has some major inherent inefficiencies.

While the Web's "come one, come all" network architecture has allowed the Internet to quickly grow and become nearly ubiquitous, it has also created numerous bottlenecks that can greatly bog down the transmission of information. The so-called information superhighway, just like real highways in areas of hyper-growth, has more than its fair share of traffic jams.

World wide wait drives consumers crazy
It is estimated that the amount of information being sent over the Internet roughly quadruples each year, and network capacity has been straining to keep up with demand. At the same time, competition for consumers' attention has continued to increase on the Web, and companies operating online have found that site speed is an important product characteristic.

Survey after survey has shown that slow download times drive customers crazy -- or to competitors' sites. With millions of websites and dozens of direct competitors just a click away, online visitors simply have little tolerance for slowly loading pages.

According to Zona Research, the average Internet user will "bail out" -- click off one site onto another -- if a page takes more than eight seconds to download. Zona estimates these bailouts cost online businesses over $4 billion annually in lost revenue from people who would have made purchases if not for a slow site. Even more potential revenue is flushed down the toilet when Internet users don't see ads or fail to return to a site after they've had a poor experience.

Sometimes a slow site is due to poor design or a company underinvesting in its content distribution capacity. But all too often, it is due to the Internet's overall poor performance.

The solutions
One way to take care of this problem is to add as much capacity (a.k.a., bandwidth) as a budget will allow, but another way is to more intelligently and efficiently use the available network infrastructure.

There is a new breed of companies operating in a sector that we focused on in the most recent Motley Fool Research Internet Report on intelligent content delivery companies. Companies in this industry sell products or services that accelerate and optimize the flow of information over the Internet, and the demand for speed-enhancing solutions is exploding.

Most companies in the industry are experiencing annual growth rates in excess of 100%, and the growth does not look like it will slow anytime soon for companies that can greatly enhance the efficiency of the available Internet bandwidth. Even with a slowing economy, companies will spend to make their sites more productive and efficient.

The biggest name in the industry is Akamai (Nasdaq: AKAM). Akamai owns a system of roughly 8,000 servers that are located around the globe at the so-called  "edge" of the Internet. Akamai is a service provider that allows online companies to outsource data delivery of a site's static and many times large content, such as company logos and navigation bars.

Since chances are Akamai has a server physically closer to a user, the "Akamized" content does not have to travel as far or go through as many nodes on the Internet, and this greatly speeds up delivery time. Moreover, Akamai has a "secret sauce" that allows the load of work to be balanced across its network of servers, routing the request for information to the server best able to deliver the content quickest, considering such things as geographical proximity, performance, and congestion of all available servers in its network.

Akamai not only greatly enhances the speed of its customers' websites, but it can also help a company's IT budget go much further. Companies can offload a great deal of their content to Akamai, decreasing the load on central network servers. Moreover, Akamai customers can reap all the benefits of having content mirrored on literally thousands of servers without the headache and expense of maintaining multiple caching appliances and servers across the globe.

Of course, Akamai is not the only company trying to speed up the Web. Its closest competition is a coalition of companies led by Inktomi (Nasdaq: INKT). The aptly named "Content Bridge" alliance is made up of a diverse group of companies including such heavy hitters as AOL Time Warner (NYSE: AOL), Hewlett-Packard (NYSE: HWP), and Intel (Nasdaq: INTC). This group has come together to create a system to deliver online content similar to Akamai's system but non-proprietary. Inktomi has some unique solutions, but getting all the members of Content Bridge on the same page will be a challenge.

Another company in the industry is InterNAP (Nasdaq: INAP), which provides a service that greatly enhances the speed and reliability of messages that have to travel long physical distances over the Internet backbone. Yet another way to invest in the industry is to invest in network hardware companies that make content caching appliances such as Network Appliance (Nasdaq: NTAP) or CacheFlow (Nasdaq: CFLO). There are literally dozens of companies in the industry, and the vast majority of them are growing at a breakneck pace.

In short, intelligent content delivery is a newly emerging industry that should see healthy growth for the foreseeable future. This is because the industry adds value to Internet sites by giving those using speed-enhancing solutions a competitive advantage, adds value to those operating the Internet backbone by mitigating the loads on the network, and adds value to Internet users everywhere by making the Internet a faster, more enjoyable place to be entertained and do business.

Paul Larson virtually drives to work every day from Colorado to Fool HQ in Virginia over the Information Superhighway, and he can't stand the traffic jams. Though he has a vested interest in seeing the Internet speeded up, he owns none of the companies mentioned here. You can view all of Paul's holdings online at Fool.com. The Motley Fool is investors writing for investors.

Related Links:
Internet Report on Intelligent Content Delivery
Akamai Powers Ahead
Rule Breaker Breakdown -- Akamai
StockTalk -- CacheFlow