"Content delivery," indeed.
Face it, this entity we know as the Internet has never lent itself to simple portrayal. But suddenly, the Internet infrastructure crowd -- the folks who do unimaginable things like Web hosting and the like -- is drawing the picture in colorful, detailed strokes. Or at least that's the case with
, which presented Tuesday before a packed house at
11th annual technology conference.
Pushed by the recent spate of dot-com setbacks, Exodus and its Web-hosting pals are on the move to show investors they aren't about to disappear into the ether. Their stocks have been hit hard amid the Net selloff of recent months, but Tuesday saw their recent recovery continue:
rose 5 1/16, or 15%, to finish at 37 7/8, while content-delivery specialists
jumped 11% and 2.5%, respectively. Caching appliance maker
added 1/4 to close at 57 1/4.
So how has the game changed? Well, gone is that silly cloud at the center of every network diagram that represents the Internet. Exodus is putting meat on them backbones, giving investors full-color illustrations of some of its 20 data centers.
"There is a real tactile feel to this stuff," said Exodus' chief financial officer, R. Marshall Case, as he went on to describe the data centers' dual backup power supply systems and the redundant fiber-optic network connections. Case even invited those crowding the 250-seat ballroom to visit a data center near them.
The look and feel of the centers, replete with 7-foot-tall server bays and the sorts of security and climate-control amenities that would make a Fort Knox engineer envious, came through loud and clear.
"They really emphasized the tangibles in that presentation," says Christopher Long, an analyst with the New York-based venture capitalist firm of
TH Lee Internet Partners
, who was on hand after the presentation and has no stake in Exodus.
So why the emphasis on the pretty physical assets when it's the Web-hosting and content-delivery service that they are usually selling?
It doesn't help that the technology is a little hard to get your hands, let alone your head, around. Add to that the trepidation of further dot-com failures, which fall at the door of the Exodus business model.
"I think they want to highlight to the Street that this is not just wing-and-a-prayer.com," says
Internet analyst James Henry. "This is something with the critical infrastructure to enable the Internet. It's something with a proof of concept of their business model." Henry has no rating on Exodus, and Bear Stearns has no banking ties to the company.
Exodus has 2,830 customers, including
. The company for the first time turned cash-flow positive last quarter, reporting $1.7 million in earnings before interest, taxes and depreciation.
But it hasn't been an easy go for Exodus, and continued upside will remain a challenge. Network-centric competitors, including
data operations, and
, could easily rob customers if Exodus repeats past
performances with crashes and other similar screw-ups.
For now, Exodus seems to be getting some mileage among investors on the fancy server comforts it affords its equipment.