Akamai to acquire Netli for $177m in stock
Akamai Technologies Inc. will pay $177 million in stock for Netli Inc., a Mountain View, Calif., company that helps businesses speed up their online software applications.
"We discovered that they had some really cool stuff, and it's very complementary to what we're doing," said Akamai's chief scientist, Tom Leighton.
Akamai, of Cambridge, is the leading provider of Internet content-delivery services. It maintains a worldwide network of server computers that collect data from major websites, such as the CNN news site.
A reader in, say, Tokyo, gets CNN web pages from a nearby Akamai server, not from one in the United States. This leads to faster Internet performance, while letting Akamai's customers avoid the expense of building their own networks.
Netli makes products for companies that run critical business applications over the Internet, like Oracle Corp. databases or SAP business management software.
Sending data over a standard Internet connection requires lots of behind-the-scene communication between servers, which slows the process. Netli uses a custom protocol to eliminate redundant traffic and speed up software performance.
"You reduce a lot of the round-trips, which makes a big difference for companies operating overseas," Leighton said.
"What they focused on from the beginning was how you accelerate more low-volume transactional activities," said Peter Christy, principal analyst at Internet Research Group in Los Altos, Calif. "Akamai from the beginning was more about handling high-volume websites."
Combining the two technologies will let Akamai offer a more comprehensive suite of services to improve network performance, Christy said. "It's really complementary to what Akamai is doing," he said.
Shareholders in privately held Netli will get a total of 3.2 million Akamai shares, valued at $55.55 at Friday's market close. Akamai said the transaction will be revenue-neutral, and should be completed this quarter.
Hiawatha Bray can be reached at bray@globe.com. 
