Shares Slide, but Inktomi Buy Gets Thumbs-Ups All Around - TheStreet

Shares Slide, but Inktomi Buy Gets Thumbs-Ups All Around

The streaming-video technology garners kudos from industry watchers.
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Investors didn't react well to

Inktomi's

(INKT)

purchase Wednesday of Internet-broadcasting technology firm

FastForward Networks

. But the deal promises to make the Net a livelier place.

Following the announcement of the $1.3 billion all-stock deal, Inktomi's shares fell about 3% Wednesday. Yet the deal looks promising for Inktomi, say both an industry analyst who follows the company and a major customer of both Inktomi and FastForward.

FastForward's technology for streaming live video across the Internet is "exciting," and it's a good extension to Inktomi's product line, says George Peabody, vice president of carrier and enterprise communications at the

Aberdeen Group

market research firm. Tied into Inktomi's recently announced

Content Bridge

partnership with

America Online

(AOL)

and

Adero

, FastForward will put live-streamed video in front of a larger audience, he says.

FastForward does have competition, though, says Peabody. One competitor in the live-streaming technology field is

Cisco

(CSCO) - Get Report

, he says; another is

Reliacast

, which has "ticketing" technology for controlling access to live Web events -- technology that FastForward doesn't have. (Reliacast and Cisco are clients of Aberdeen's; Inktomi and FastForward aren't.)

By teaming with Inktomi, FastForward won't have to build up its sales and support teams from scratch, says Leo Spiegel, president of

Digital Island

(ISLD)

. Spiegel's firm is a customer of both Inktomi and FastForward; Spiegel adds that Inktomi has a minor stake in Digital Island, and he considers his company a partner of the other two.

Spiegel says his firm is "really impressed" with FastForward's live-streaming technology. "It rocks," he says.

Aberdeen predicts that Web broadcasting will be a $40 billion market by 2003. But Peabody admits that consumer business models for Internet video streaming are still unclear. "We're part of a big experiment right now," he says.