Akamai Shares Jump After AT&T Sales Agreement
Shares of Cambridge, Massachusetts-based Akamai gained 10 percent to $39.06 at the close in New York, the largest jump since July 26, after the former rivals in video and data- delivery business said they plan to jointly sell and manage the service. Akamai is up 21 percent this year.
AT&T, the largest U.S. phone company, plans to sell business users the Akamai service as part of its expanding Internet offering that includes data-center information storage and cloud computing, said Fletcher Cook, an AT&T spokesman. Content-delivery services offer businesses fast, efficient transport of massive data packages, such as video and Web applications.
“AT&T is pairing up with arguably the best name in this business and it allows them to simplify their product offerings,” said Chris Larsen, an analyst with Piper Jaffray & Co. in New York.
While the pact is a reselling agreement, it will be offered as a feature integrated into AT&T’s network, said Cook. The contract with Akamai is a multiyear deal, said Cook, who declined to disclose the terms.
“The deal allows Akamai to leverage the huge enterprise sales force of AT&T,” said Kevin Roe, of Roe Equity Research LLC, based in Dorset, Vermont.
Akamai will seek more partners around the world for agreements like the one with AT&T, said Brad Rinklin, chief marketing officer.
“Our goal is to bolster the amount of money we get through our partner strategy. You’ll see a number of different things,” Rinklin said. Akamai already partners with about 1,000 networks and is working to find which ones can sign on to more significant deals like that with AT&T, he said.
AT&T, based in Dallas, fell less than 1 percent to $33.65.
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