Report: Akamai To Announce P2P Service

Akamai (AKAM) is reportedly preparing to announce a peer-to-peer (P2P) add-on to its content delivery network.

Here's an interesting example of how a blog post can uncover information about a widely-followed public company: Yesterday Dan Rayburn wrote a post titled "Is Akamai Announcing a new P2P Delivery Service Next Week?" The post addressed speculation that Akamai (AKAM), the leading content delivery network, was set to unveil an attention-getting new service during its company analyst summit.

Within hours, Dan had heard from several Akamai customers saying the company is issuing invitations to a Nov. 6 event announcing the launch of the P2P delivery service.

In its quarterly analyst call yesterday afternoon, Akamai president and CEO Paul Sagan was asked about the reports of a P2P offering. Sagan noted that Akamai has been public about its interest in the peer-to-peer market (which Akamai refers to as "client delivery") but "we don't have any product or service announcements to make right now."

Sagan expanded upon Akamai's approach to the P2P market, saying that in the wake of Akamai's acquisition of P2P company Red Swoosh, it was "very optimistic about that client technology becoming an addition to our content delivery networking." The full transcript of the call is available at Seeking Alpha. Here's an excerpt of Sagan's comment son P2P:

I would say that while there seems to be more hype about peer-to-peer than ever before, that technology and solutions have been around longer than Akamai without getting any traction in the commercial marketplace, really because of the lack of QOS and direct tie to piracy and lack of digital rights and all sorts of problems with not just the content providers right but end user machines and performance et cetera.

But we are very optimistic that you can marry some client delivery with a robust backend for control, and analytic, with our content delivery solutions to really a best-in-breed offer that really raises the bar on scale and cost parameters. But that's going to take a while to bring into market and test.

I also think that, there is a pretty simple math that people ought to go through that explains why peer-to-peer doesn't solve the content delivery problem, even if you take piracy and all those other issues off the table. And that is that bandwidth that people have at their home, for example, isn't symmetrical, so the amount that you can upload is much smaller than what you can download ... So, we think it is an add-on to what we are doing. It is not a replacement for any of the solutions that we've brought to market.

Sagan also said P2P is a concern for many ISPs, who are critical partners for Akamai. Significantly, the company also raised its full-year revenue forecast to $625 to 629 million, from a previous range of $615 to 625 million.