Editor's note: As part of our partnership with PBS's Nightly Business Report, TheStreet's James Rogers joined NBR to discuss under-the-radar Internet infrastructure stocks. (Watch video and read transcript)

NEW YORK (TheStreet) -- Blue chip tech stocks like Google (GOOG) and Amazon (AMZN) may be the biggest names on the Internet, but investors looking to harness some upside in the next stage of the Web revolution should watch Akamai (AKAM), Rackspace (RAX) and Digital River (DRIV), say analysts.

The powers of these lesser-known Web stocks lie in areas like content delivery, managed hosting and online transaction processing -- key web technologies that help ease and eliminate data bottlenecks created by the massive demand for content that mobile device-wielding customers expect from the Internet.

"It doesn't seem like people are slowing down their use of the Internet," said Tim Klasell, an analyst at Stifel Nicolaus. "We're continuing to put up more Web sites and do more transactions over the Internet."

These three stocks offer a different form of specialized Web service and present a cheaper entry point into Internet stocks than do Google and Amazon, which are priced, respectively, at $616.50 and $169 a share.

The three companies have all also hit 52-week highs in the past month. Read on for more about why analysts say Akamai, Rackspace and Digital River have topped their lists.
Word on the Street

Akamai

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Akamai, which reports its third quarter results on Wednesday, provides a slew of services for delivering increasingly sophisticated data over the Web. With smartphones, tablets and social media placing greater strains on the Internet, Akamai touts its managed solutions as a way for companies to cope with peaks in demand and quickly identify problems.

"Fundamentally, I think that they are in a really good position," said Stifel Nicolaus' Klasell. "They accelerate really time-sensitive applications like e-commerce, cloud computing and Software-as-a-Service (SaaS)."

With a network of 73,000 servers deployed at data centers around the world, Akamai has earned a fierce reputation for content delivery, recently serving up more than 1.6 million concurrent video streams from this summer's soccer World Cup.

Akamai's stock has been on a big rally this year, rising more than 90% to reach $48.68. Klasell, who has a hold rating on the stock, said that investors might want to wait for a more attractive entry-point, but he likes Akamai's long-term prospects.

Brian Marshall, an analyst at Gleacher & Company, said that Akamai's content delivery expertise might make it an attractive acquisition target for a bigger tech firm, perhaps even Apple ( AAPL). Marshall, who has estimated that there could be 200 million iPhones, iPods and iPads in use by June 2011, said that "if Apple would acquire Akamai, they could better distribute their own content."

Akamai lists Amazon ( AMZN), Apple, Yahoo! ( YHOO) and the U.S. Department of Defense among its customers.

Rackspace

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Rackspace serves about 100,000 customers from nine datacenters around the globe with its web hosting offerings. The San Antonio, Texas-based firm touts various managed services for hosting firms' Web applications, cloud computing, e-commerce and e-mail systems.

"I think that will be an area of phenomenal growth in the future, as SMB and enterprise customers look to lower their operating costs by outsourcing their IT," said Gleacher & Company's Marshall.

With a forward price-to-earnings ratio of 43.02, Rackspace has strong potential for future earnings growth, particularly when compared to rivals such AT&T ( T) and IBM ( IBM).

Analyst firm JMP Securities rates Rackspace as market outperform. In a recent note, JMP analyst Pat Walravens explained that more and more companies are considering Rackspace's hosting services. "We recently attended a Rackspace conference where we spoke to a number of customers and prospects who were interested in expanding or establishing a relationship with Rackspace," he wrote, adding that the company's partner ecosystem is also growing.

Rackspace reports its third-quarter results next month.

Digital River

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Digital River, based in Eden Prairie, Minn., builds e-commerce sites for software publishers, online retailers and video gaming companies -- an area poised for growth, said Daniel Ives, an analyst at FBR Capital Markets.

"It has kind of been an under-the-radar name," he told TheStreet, adding that Digital River is a one-stop-shop for online transactions. "The trend is to more e-commerce -- we're seeing more enterprises of all shapes and sizes going online."

Despite losing key client Symantec ( SYMC) earlier this year, Digital River still has an impressive customer list, which includes Hewlett-Packard ( HPQ), Samsung and electronics giant Philips ( PHG); Microsoft ( MSFT) also recently extended its deal with Digital River.

The loss of Symantec may have been a setback, but investors should still view the company as a long-term play. "It's a rebound story -- 2010 has almost been a transitional year for Digital River," said Ives."But a year or two out, you're looking at 15% to 20% revenue growth, with a 20% to 25% operating margin profile."

The analyst, who rates the company market outperform, believes that Digital River's strengthened relationship with Microsoft should help allay investor concerns about Symantec's departure. Ives is also eyeing future upside. "I think there are two to three large deals that are yet to be announced, and that could serve as a catalyst," he said.

Digital River's third-quarter results, released on Monday, came in above expectations, with the firm citing "tremendous progress" towards replacing lost Symantec revenue.

--Written by James Rogers in New York.

>To see these stocks in action, visit the Top 3 Web Stocks portfolio on Stockpickr.

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