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Buy Rating Reiterated For AKAM

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Goldman Sachs has published a research report for Akamai Technologies Inc. (NASDAQ: AKAM) regarding the company's relationship with AT&T (NYSE: T) and competitor Cotendo.

In the report, Goldman Sachs writes "StreamingMedia.com reported that Akamai competitor Cotendo has been in a reseller relationship with AT&T since July. Our view is that, outside of smallish contracts at captive hosting customers, AT&T has had little impact on the CDN market to date, and we therefore aren't overly concerned about Akamai's dynamic site franchise for now. Cotendo, Limelight, AT&T and others have been going after “low-hanging fruit” at aggressive prices in the small-file delivery market (generally smaller enterprise contracts) for a couple of years. Though these efforts may have shaved some points of growth off Akamai's e-commerce revenues, we estimate Akamai's commerce business still grew about 16% organically during 2009, and has grown ~20% year to date. We believe Cotendo is likely doing under $10 mn in revenues, though AT&T could add credibility and greater distribution scale and is worth watching."

Goldman Sachs maintains its Buy rating and $60 price target.

Akamai Technologies closed yesterday at $47.39.

 

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