Why Akamai Technologies Shares Roared Higher
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Akamai Technologies (NAS: AKAM) roared higher today by as much as 11%, after the company said it had partnered with AT&T (NYS: 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.
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The article Why Akamai Technologies Shares Roared Higher originally appeared on Fool.com.Fool contributor Evan Niu, CFA, has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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