Prediction: Google Acquires Akamai before AT&T

Akamai has been on a stride lately, its stock price is in the forties, it’s market cap is $8B+, and it just acquired Prolexic. The acquisition will provide an extra few hundred million in revenue, and separate it from other CDNs, just by a little. I’m sure Akamai is on the minds of some suitors. Who is the best fit?

With an $8B+ market cap, plus the premium required to buy them, the $12B+ price tag means only a handful of players can buy them: IBM, AT&T, Apple, Cisco & Google. Apple could easily do it, with its $100B+ cash hoard, and it would fit nicely into the Apple ecosystem for their app, music & software delivery. But it’ll never happen. Cisco could do it, but won’t, because then, it would compete with its big Telco customers. IBM can also buy them, but IBM is more into software, hardware, storage, & cloud compute, not Internet infrastructure services.

This leads us to AT&T & Google. Akamai would be a good technology fit for AT&T. After all, AT&T is in the Internet infrastructure business. However, culturally, they couldn’t be more different. Akamai is an old school company along the lines of IBM, HP, Dell, AT&T & EMC. The only difference, Akamai get’s the Internet. They really get it, and understand the Internet side of things. You can say it was forced upon them, they had to adapt culturally, because their customers are the young and savvy Internet companies like Airbnb & Etsy. On the other hand, do these savvy Internet companies use IBM hardware or software, or do they buy bandwidth from AT&T, maybe, but most likely not.

With that being said, Google is above and beyond the best fit for Akamai. Not only are Google engineers on par with Akamai when it comes to Internet Infrastructure, but Google is ahead in the areas of big data, cloud compute and analytics. Akamai would be the perfect addition to the Google Cloud Compute Platform, where it competes against Amazon AWS.

Akamai would also be good fit for the Android part of the business. Not only does it benefit Android app delivery, but Google can incorporate the Akamai acceleration technology into the Android phones. And last but not least, since Google is buying dark fiber, and rolling out its own fiber services in many cities, Akamai would be a great fit for that, in delivering content over the last mile, direct to consumers. If Google were to acquire Akamai, it would catapult Google an extra notch or two, in the Internet infrastructure business.

Grade School Rating for Akamai being Acquired (A being the best)

  • A:  Google is the best fit.
  • B:  AT&T is the runner up.
  • C:  IBM purchase unlikely to happen.
  • D: Cisco won’t do it.
  • F:  Apple, no way Jose.