In 2006, consumers listened to more songs and watched more video over the Web than ever before. Even e-commerce transactions, particularly online holiday shopping, registered an increase, as did the rapid expansion of user generated content on the Web.
One big winner that is cashing in on this trend is Akamai (Nasdaq: AKAM) — the company that helps speed up the secure delivery of content through its global network of servers. “We do not believe that consumer appetite for rich media applications or robust e-commerce will level off any time soon,” says President and CEO Paul Sagan.
Sagan’s view bespeaks conviction if broadband proliferation is anything to go by. While Forrester Research estimates the total number of broadband users in the U.S. to grow 42 percent by 2010, PricewaterhouseCoopers believes that broadband adoption will grow by 80 percent globally. For Akamai, this translates into an opportunity to not only hold on to its present position, but given its size and the robust nature of the market, roar well beyond its present stature.
Consider this: Every time you download something from the Web, you literally add value to Akamai. Last year, the company’s revenue grew more than 50 percent. It registered revenue of $428.7 million with net income of $154 million.
Says Sagan, “2006 was a banner year for Akamai.” Strong demand from online media and entertainment customers helped the company beat its own expectations. “We were completely surprised by the strength of the business. We’ve been the beneficiary of the growing proliferation of broadband in both the consumer and enterprise segments.”