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Microsoft buys $15m stake in Akamai

That's one in the eye for Apple's QuickTime strategy

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Microsoft yesterday joined Apple and Cisco in pouring money into Internet access acceleration specialist Akamai. Microsoft will write Akamai a cheque for $15 million, but it's not yet clear how much of the company it will get for its investment. Cisco spent $49 million and received a four per cent stake -- Apple owns five per cent of the soon-to-IPO company for a measly $12.5 million investment made just a month before Cisco's. At that rate of inflation, Microsoft will get hardly anything. Not that that may matter, since the deal's advantages lie elsewhere. And for Microsoft the deal certainly is advantageous. For a start, it gets to stick one on Apple. Apple is using Akamai's global network of servers to power its push for control of the streaming media market. Akamai's system mirrors data to sites across the world and transparently connects users requesting data from, say, Apple's software download site, to the server nearest to them. Apple's QuickTime already offers a superior image quality to the likes of Real Networks' RealSystem G2 and Microsoft's Windows Media Technologies, but it needs a solid, fast network to ensure users' get sufficiently decent playback performance to notice the picture quality. Now, however, Microsoft will be doing the same thing, diminishing Apple's quality lead at a stroke. At the same time, third-parties who want to make use of Akamai's system won't be steered toward QuickTime is the streaming media format of choice. The deal with Akamai will also see the software that makes Akamai's network work being ported over to Windows NT. That's not too much of a blow for Apple, but it is one in the eye for the Linux world, currently the only OS that Akamai supports. NT support also signals Akamai's expansion of its strategy from simply offering a network for streamed media to providing corporate networks with the same functionality. That means growing the number of server OSes the company supports, and we can probably expect various varieties of Unix to be added to NT and Linux in the future. The deal is less of a threat to Cisco, which made its investment to gain access to Akamai's technology in order to build it into future router and switch products. ®

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