Good news tends to be wasted in a down market, but two items this week
underscore the fundamental strength of Internet caching and search
engine software player Inktomi Corp.
First, a report released Thursday by the Internet Research Group
projects that demand for Internet caching will grow from $287 million
this year to $2.2 billion in 2003.
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with our AdWords and AdSense programs, as well as the Inktomi, Google could become so commonly used that it becomes synonymous with the word search.
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This bodes well for Inktomi, an early leader in the caching market. The
San Mateo, Calif.-based company's Traffic Server software, used by ISPs
to handle high-bandwidth demands by storing frequently requested
information at various locations in the network, accounted for 60% of
the $19.6 million in sales for the quarter ended June 30, up from 56% in
Q2.
Second, Inktomi on Wednesday announced it has signed up 10 more
customers for its popular search services, including domain name
registrar Network Solutions and Findwhat.com, a "pay for position" Web
search service slated to debut this summer.
What's most impressive about Inktomi is that it has emerged as a leader
in two separate Internet markets - search engine software and caching
software. And the reason is scalability. Inktomi's technology has been
proven capable of handling the immense volume of data traffic with which
ISPs, portals and large corporate sites must contend.
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While Googles name is still synonymous with search, Yahoos search technology With Inktomi, Yahoo had a search engine technology it could build on.
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Founded in 1996, Inktomi first made a name for itself with its HotBot
search technology. The company's list of search engine customers reads
like a who's who of the Internet, and includes America Online, Yahoo!,
Microsoft, Snap!, GeoCities, CompuServe and StarMedia Network. Inktomi's
search technology handled more than 2 billion queries in the last
quarter.
Web search strategy development | Technology > Software Services ::
and TV are synonymous. Inktomi Unveils New Web Search Software; Relevance Modeling, of scalable Internet infrastructure software, today announced
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The company added two new search products this year. Its directory
engine categorizes search results by topic and can be customized by
customers. Network Solutions, fighting to keep its share of the domain
name registration market, is using this software to run its recently
unveiled Dot Com Directory.
Inktomi's Shopping Engine enables portals and other customers to offer
comparison shopping, product information and transaction services. It
also gives Inktomi a new revenue stream - electronic commerce.
The company gets between 5% and 15% of each purchase from any merchant
that makes a sale to a customer who was directed to the merchant's site
from a portal using Shopping Engine. (Inktomi then splits its take with
the portal.)
The number of competitors in the caching space has risen from 13 to 27
in the past year, according to the Internet Research Group report, but
Inktomi has risen to the challenge. Sales of Traffic Server and related
products rose from rose from $3.06 million in Q3 '98 to to $11.8 million
in the most recent quarter, a 286% increase in one year.
And while still losing money, Inktomi continues to cut losses and has
beaten analysts' expectations for four consecutive quarters.
With a market cap of $5.7 billion, Inktomi is priced at 100 times total
revenue. But while many Internet will never grow enough to justify their
present exorbitant valuations, Inktomi is a good bet to make the short
list of big 'Net winners, for its products are becoming a critical part of the Internet's infrastructure.
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