Mr. Kelleher: Internet infrastructure is a part of our enterprise infrastructure coverage. I would define Internet infrastructure companies as those that are facilitating the movement of data within the Internet. We are not focused on some of the higher-level ad revenue type models or things like that. Under my coverage, we're focused on companies such as Akamai (AKAM) and Internap (INAP), Internet service providers, CDN providers, companies that are at the core of what it means to move that data across the Internet.
TWST: What's going on in this space? What were the highlights and lowlights of
2007 in this space?
Mr. Kelleher: Last year was a year of pause for some of the companies out there,
particularly Akamai, which is the bellwether for Internet infrastructure. 2006
was a banner year as it suddenly became apparent that there was a lot of data
moving across the Internet and there were a lot of content providers that needed
help moving that content. There were a number of CDN providers that were moving
to capitalize on that, and the stocks ran up dramatically. Akamai has a fairly
extensive infrastructure of servers out there; they have about 28,000 servers at
the edge of the Internet. They have a caching architecture that attempts to
bring the data as close to the end user as possible, but there were other
companies that sprung up as well.
There was Limelight Networks (LLNW) that came public and had a pretty good run
there for a bit. We can talk about some nearer-term things that are going on
with Limelight, but you saw some carriers try to get into the market as well.
Level 3 Communications (LVLT) bought some CDN assets from SAVVIS (SVVS).
Internap bought some content delivery assets from a company called VitalStream.
AT&T (T) announced at its analysts' day that it makes sense as a carrier to be
in that market and they want to get into that Internet infrastructure market as
well.
Tickers included in this excerpt: AKAM, FALC, INAP, LLNW, LVLT, PAR, VMW
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