Like the BEP tune back in the day, I really want to love AKAM but I’ve got a troubled heart. I think that fundamentally the company has a lot to offer the marketplace but, you know, management keeps acting strangely. First quarter, they beat and raised guidance and everyone was singing their praises. Then in Q2 they fall short by a lot. It was a disaster. (One more thing: they did it last year, too.)  I don’t know what to think.

As our network will tell you, AKAM is really the only company that has a defensible position because of its ability to package value-added services such as DRM and Syndication Rights Control—more and more this is where the media market is going as companies shift risk to third-party vendors. But then I look at management, see them falling short in the second quarter two years in a row, and I wonder, “Do these guys know what they’re doing?” I think a lot of investment managers are wondering about that, too.

So let me cut to the chase: are these people incompetent or altogether too cute? You can say they’re hard core techies. That they come with an algorithm and a dream—and they do make things go faster on the web (no more BARS, thank god). But they’re a public company and it’s time to wake up. The stock drops like a hot rock and management swoops in to buy shares at a discount. They know everybody loves them and the shares will recover. They may be right. But I think there are a lot of people who won’t get into the stock because they can’t be sure what they’ll get out of it.

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Tags: DRM, Syndication Rights Control

This entry was posted on Thursday, August 20th, 2009 at 2:49 pm and is filed under Internet, Laxmi Poruri. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.