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A leading provider of cloud optimization services, Akamai Technologies Inc. (AKAM) announced that the Akamai HD Network exclusively streamed the 2011 NCAA March Madness On Demand (MMOD).

NCAA March Madness On Demand (MMOD) covers the NCAA Division I Men's Basketball Championship and was provided by Turner Sports and CBS Sports. Turner Sports is a division of Turner Broadcasting System, Inc. and all the games were broadcasted on four networks TBS, CBS, TNT and truTV.

Akamai’s global network delivered live and on-demand streaming video across broadband and mobile appliances.

Akamai streamed all 67 games live coupled with game replays and highlights via video-on-demand. The live streaming of all games happened for the first time in the championship’s history.

The live streaming of the games was done through Adobe Inc.’s (ADBE) Adobe Flash to personal computers and android-based tablets and mobile phones.

Most recently, Akamai’s HD Network was the first global video delivery network that received a certificate from Adobe for its HTTP dynamic streaming implementation.

The certificate allows Akamai to deliver live and on-demand streaming based on Adobe Flash technology, through the Adobe F4F format, which is fully compatible with Adobe Flash run times that currently support HTTP dynamic streaming.

The live streaming of the championship games gave a significant boost to Akamai’s viewership, with 1.9 million unique visitors per day on broadband sites and more than 680,000 daily visitors to mobile applications.

At the end of the championship, total visits across the 2011 NCAA March Madness On Demand broadband and mobile products increased 63.0%, while online video consumption increased 17.0% compared with last year.

Akamai’s growth is fueled by the increasing penetration of broadband and momentum in online media and entertainment and we see no deviation in these trends.

We believe that the growth in High Definition (HD) quality video over the Internet should help drive bandwidth requirements going forward, thereby driving incremental demand for Akamai’s services. We expect HD video to emerge as a new growth driver for Akamai in the coming years.

Akamai’s continued initiatives, broad services offerings and collaboration with large vendors such as Microsoft Corp. (MSFT), Apple Inc. (AAPL), Netflix Inc. (NFLX), Hulu and Adobe to enable HD quality experiences, in our view, will help the company benefit from the growth in HD content and media in the near term.

Recommendation

Akamai is a leader in content delivery networks with over 60% market share and currently delivers 15.0% to 30.0% of all Internet traffic worldwide and has the largest web content delivery and acceleration platform.

However, the company is facing tougher competition and pricing pressure, as new competitors including AT&T Inc. (T) and Level 3 Communications Inc. (LVLT) enter the market, joining traditional players like Limelight Networks Inc. (LLNW) and Packeteer.

We continue to maintain a Neutral rating on a long-term basis (6-12 months). Currently, Akamai has a Zacks #3 Rank, which implies a Hold rating on a short-term basis.

 
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