Inktomi To Buy FastForward Networks

Internet infrastructure company Inktomi Corp. said today it would buy FastForward Networks, a developer of technology that distributes and manages live online broadcasts, in a stock deal worth about $1.3 billion.

Inktomi ( http://www.inktomi.com) said the deal to acquire FastForward (http://www.fastforwardnetworks.com) will propel the company into the Internet broadcast infrastructure space -- a market expected to reach $40 billion by 2003, according to a recent study by the Aberdeen Group.

"Since its inception, Inktomi has been the company solving large, complex problems that have plagued the Internet, making it a more compelling and reliable medium for users worldwide," said David Peterschmidt, Inktomi president and CEO of Inktomi, in a briefing to financial analysts this morning. "Today's move evolves this critical role."

Under the terms of the agreement, Inktomi will exchange approximately 11.9 million shares of its common stock for all outstanding shares of FastForward. Based on Inktomi's closing price yesterday of $111 per share, the deal is worth roughly $1.3 billion, the company said.

San Francisco-based FastForward, who lists Real Broadcast Networks and Digital Island among its customers, developed the industry's first scaleable software technology for the distribution and management of live broadcasting over the Internet.

Although Inktomi is well known for its search engine technology, it has recently focused on growing its content delivery streaming services. With the acquisition of FastForward, Inktomi is well positioned as a total provider of streaming services, said Greg Howard, analyst with the HTRC Group.

‘This acquisition fills out the total solution for Inktomi, in coupling live streaming delivery with on-demand or content delivery network streaming services," said Howard.

Although the companies have close to a 70 percent overlap in certain aspects of its customer base, Howard sees little conflict in the client channels. "The customer base is very complimentary. Any mutual customers the companies may have will likely continue to work with both," predicts Howard.

The transaction is expected to close by the end of the year. Inktomi will gain all of FastForward's 75 employees and will operate under the Inktomi name as the Media Division, headed by Abhay Parekh, president and CEO of FastFoward.

The division will be based in San Francisco at FastFoward's current location, says Eric Wolford, vice president of product management and business development for FastForward.

Wolford foresees a smooth transition of the workforces for the new division, "FastForward's business culture was patterned after Inktomi, who was a trail-blazer in this layer of the Internet. Culturally, both companies have the same sort of expectations in business management and product development," said Wolford.