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Akamai CEO sees opportunity in economic downturn

Sumner Lemon | March 9, 2009
With many companies cutting headcount and costs to weather the economic downturn, Akamai Technologies President and CEO Paul Sagan wants his sales team to spend more time with customers

In some ways, it mirrors the old-world phone system. It falls short of requiring universal access for broadband, but it really incents providers to try to build out in rural areas. I think there's an assumption that they'll do things like tie hospitals to the network, even in rural areas. So the question is, if they do that could you incent them to make it available to the community somehow? In the overall stimulus package, it's a relatively small piece.

What are the long-term growth prospects for broadband services and content in the U.S.? Will growth slow down or continue to grow at a fast pace?

Sagan: It's huge. We continue to see it growing. We see rapid adoption of richer media content, particularly on consumer sites, and not just entertainment sites but shopping and commerce sites as well. If the commerce sites don't continue to richen their sites up, to have product videos, demos, and interactivity, their sites look non-competitive. It's sort of like running a black-and-white TV commercial during primetime. It would look like you were out of the 1950s or 1960s. Particularly for high-profile video events -- sports, for example -- people are starting to offer an HD-like version, in addition to doing a standard 300Kb or 500Kb stream. It's still a single-digit percentage, but there are an increasing number of people who can get a 1Mb stream. That's not a true HD signal, but it's at least as good as standard TV and you could project it up on the wall.

Was the online coverage of President Barack Obama a good example of the potential for this type of content?

Sagan: It certainly was. Most of the video was not at broadband rates, but it was certainly TV quality and we saw one the biggest audiences we've ever seen, the biggest for a single event. We run a public index of news traffic on our site that aggregates 200 leading providers around the world, so its not anyone's individual proprietary data. The peak number of users per minute on those sites was election night at 11pm, which was when they declared the winner. A lot of that was people going for the data, not the video. On the inauguration day, the peak number of users during the middle of the day, when they were doing the swearing in, was 5 million [M] or 6 million [M] users per minute, and the video rates were off the charts for us. I think you really saw, even with it on every television network, you still saw television-size audiences tuning in over the Internet.

Is there a strong correlation between how the economy is doing and demand for broadband services?

 

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