Akamai CEO sets $5 billion revenue target by 2020
Reuters – Fri, Mar 23, 2012 12:57 PM EDT
By Supantha Mukherjee
BANGALORE (Reuters) - Akamai Technologies Inc's chief executive said he wants to grow the Internet content delivery company's revenue five-fold to $5 billion by the end of this decade.
"There is significant opportunity in mobile, cloud, video and security. Each of this is a multibillion-dollar opportunity," Paul Sagan told Reuters in Bangalore, while on a visit to the company's India operations.
"It's a matter of how we execute now," said Sagan, who took over the top job in 2005. Since then, Akamai has seen revenue vault five times already to cross the $1 billon mark in 2010.
Akamai helps clients, including Apple and Netflix Inc, avoid congestion on the Web to deliver content faster and works to make websites perform better.
The Bangalore office gives a first-hand experience: In a circular room, young employees kept a vigilant eye on giant screens, looking out for cyber attack as data streamed across from clients' websites, which register more than 10 billion hits per second.
The facility which had started out with 40 employees in 2005, now has 700 people on its rolls. It is involved in every function of the company, said Sagan, who joined in 1998.
Soon after its launch, the company's shares touched a high of $345.50 at the height of the dotcom bubble. They now trade at nearly a tenth of that level.
But the stock has almost tripled in value since Sagan took over as CEO, including a 73 percent gain in the last six months when demand for online content soared.
Sagan, who was appointed by U.S. President Barack Obama to the National Security Telecommunications Advisory Committee in 2010, expects growth to come also from Akamai's web-security offerings and mobile acceleration products.
"As we scale, we place bets on only $50 to $100 million-sized product lines. I am confident both mobile and security will be in that range," he said, but refused to put a timeline on when the company will hit that range.
GOING SHOPPING
"In technology space, it's part of a healthy ecosystem to do M&A," said the CEO who had started his career as a journalist three decades ago.
Akamai has stepped up its deal activity recently: In December, it bought rival Cotendo for $268 million to beef up its web acceleration business, adding clients like Facebook, Zynga, Google and AT&T.
Last month, it bought Blaze Software Inc, a provider of front-end optimization technology for an undisclosed sum.
Sagan did not say what would be his war chest for a prospective deal, but said he was always looking for one.
Akamai itself has long been rumored to be on the radar of companies like Verizon Communications and International Business Machines Corp. So, will the buyer be ready to be bought over?
"As a public company we are always evaluating offers," is all Sagan would say.
(Reporting by Supantha Mukherjee in Bangalore; Editing by Joyjeet Das)
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