Update: According to SEC documents, Red Swoosh sold for a total of $18.7 million to Akamai.
Akamai has acquired Red Swoosh for $15 million in a stock for stock transaction. We covered Red Swoosh last year when they launched a free, ad supported version of its file serving technology.
Red Swoosh uses bittorent-like technology to quickly transfer files using peer to peer technology. Some companies are starting to use bittorent directly for file sharing, however, which questions the need for something like Red Swoosh. See this post on the BBC’s useage of Zudeo and bittorent to deliver files to users. Pando, another startup, also overlaps a bit with Red Swoosh.
This brings to a close the long and dramatic Red Swoosh saga. The company was founded back in 2001, but went through some troubled years during the crash. They recapitalized the company in 2005 and raised an additional $1.7 million from Mark Cuban.
Interesting fact about the company: Red Swoosh was in the process of changing offices in 2006 and took the opportunity to “offshore itself” temporarily - they moved the six person company to Krabi, Thailand for a month while they built a new product. See the CEO’s blog posts on the project here and here.
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I think direct BitTorrent downloads are pretty intimidating for a lot of people, I think RedSwoosh is in a pretty good position, and even more so, I think Akamai understands data transport well enough not to buy a turd.
Other than getting my head sliced off or getting shot and then burned alive, I’d love to ‘outsource’ myself to Krabi.
i know the guys who build/built red-swoosh; congradulations. maybe they’ll through another sushi get together. I guess Akamai would the technology to add to their http server technology.
Akamai makes money from clients who want to be able to serve to users fastest by routing cached data from the least number of hops.
By integrating bit torrent into Akamai’s platform they will have a lot of “servers” that will be only one hop away from a majority of users, without using their own bandwidth and infrastructures .
And Akamai will probably still be able to charge its usual 1 dollar per GB transfered.
Bravo, these are a good bunch of guys and they deserve it!
Those blog links are 404′d. Looks like Akamai have already replaced the Red Swoosh websites.
Agreed that Travis and crew are good people.
I still get the vibe that this is Akamai’s way of making sure this kind of edge-oriented delivery system stays marginalized instead of eating away at their existing business. 15M in stock on an 8.75B market cap to defend 35M/mo of revenue is a pretty easy defensive move. And hey, they’re up 71 cents on the day, which is… 10x what they paid for Red Swoosh. Nice.
Nice acquisition price for Red Swoosh.
Here is the audio of an interview I did with one of the founders, Travis Kalanick about a year ago.
http://www.web20show.com/artic.....s-kalanick
Woo-Hoo! Congrats to the RedSwoosh team for reaching the Finish line!
Thanks for the post again. Congrats swoosh to achieve this soon.
~ RaJ
http://www.suggestusability.com
You can still read the blog here:
http://web.archive.org/web/200.....woosh.net/
This news tends to prove that even giants like Akamai with strong CDN networks cannot compete against p2p delivery networks. So if you cannot beat them, join (buy…) them !
To another extent, this news is very good and confirm the efforts from my company to evangelize P2P and provide P2P Content Delivery solutions: peer-to-peer is now seriously considered as the main architecture when companies develop their online video distribution portal, while client-servers architecture are deprecated.
And of course it is not limited to video contents: you can use p2p content delivery networks for music, pictures, work documents, zip archives, programs …
Sebastien
http://www.1-click.com
Great acquisition - I bet Mark Cuban is - not even noticing his share as its nothing compared to the inflated prices he is used to.
- RB
$15M seems a bit cheap. Must have been viewed purely as a technology acquisition and not much supporting business.
Earlier this year there was a Red Swoosh blog post on how Steve Jobs could save $15 million if Apple ditched Akamai and used Red Swoosh for iTunes downloads. Was wondering if that’s where Akamai got the idea for the $15 million acquisition price?
Unfortunately the Red Swoosh blog is gone, but here’s the Read/Write Web post about that iTunes post:
http://www.readwriteweb.com/ar....._apple.php
useage? USAGE.
I agree with ChrisD about Red Swoosh being a more technology acquisition than a supporting business. While Akamai with its widely spread out network may not need P2P rightaway, it will need to integrate the technology for certain applications deployment in the future. It needed to walk the line and join the P2P brigade. Though there are several contenders in the space, Akamai just needed a complimenting piece to its own technology.
At the same time, many in the industry might evangelize the benefits of P2P; it is not that easy to integrate it with a commercial deployment.
I would have liked Red Swoosh if they weren’t a copycat company sponsored by the world’s greatest investment bouncer of all: Mark Cuban. He has been in the business of selling hype for nearly two decades, yet all his ventures have collapsed shortly after acquisition. He’s the big-business equivalent to a used-car dealer… he knows it’s shit, he covers the shit with hype and sugar-coated press releases, then cashes out and runs off to the next lucky turd. He’s ruined many people in his quest, and Red Swoosh will be yet another casualty of this loud-mouthed financial terrorist.