Akamai to Acquire Netli

Akamai Technologies, Inc. and Netli, Inc. announced today that the two companies have signed a definitive agreement for Akamai to acquire Netli in a merger transaction

The transaction, which is subject to customary closing conditions, including the approval of Netli's stockholders, is anticipated to close later this quarter. The acquisition is expected to be neutral to Akamai earnings on a normalized, diluted per share basis* in 2007.

The acquisition of Netli is expected to enhance Akamai's application acceleration solutions, which improve the performance of Web- and other Internet-based applications. According to Gartner, a leading research firm, the market for application acceleration spending is forecasted to grow to $3.3 billion in 2010. Akamai and Netli's combined managed services will seek to address two important market segments identified by industry analysts - application delivery controllers and WAN optimization controllers.

By combining Netli's high performance communications protocol with Akamai's massive global scale and unique capabilities to route Internet traffic around points of congestion, Akamai expects to offer businesses the most comprehensive and effective managed services for accelerating applications. These services enable enterprises to improve the performance of dynamic, highly-interactive applications such as customer portals, collaboration platforms, e-learning environments, and business-to-business commerce.

Organizations often face conflicting technology challenges as they move business processes to the Internet to increase revenues, expand into new markets, streamline operations, enhance productivity, and ensure customer satisfaction. Confronted with the need to consolidate infrastructure to avoid the cost of global data center build-out, enterprises also must ensure users, customers, partners, and employees experience good performance, regardless of what online application they are trying to reach and where they are located worldwide. The acquisition of Netli, when completed, is expected to further establish Akamai as the leading managed service in the application acceleration space. Akamai's managed service provides customers an effective alternative to deploying costly and often ineffective hardware to improve performance of Internet applications.

"We are very encouraged by customer acceptance of our application acceleration services, and believe the alignment of Akamai and Netli will provide enterprises with even better solutions going forward in this important and emerging market," said Paul Sagan, president and CEO of Akamai. "Akamai and Netli both emphasize leading-edge technology to help businesses deliver more effective, higher performing online applications, and we are confident that this combination will benefit our customers, employees, and shareholders."

"By joining forces with Akamai to address the large and quickly expanding application acceleration market, we believe our customers will gain access to an even larger global network and a wider portfolio of leading-edge services supported by a combination of the most experienced providers in the industry," said Gary Messiana, CEO of Netli. "Our people are very proud of our pioneering work to deliver proven and effective technology in the area of optimizing online application acceleration, and we look forward to working with Akamai to combine our technology and capabilities to create the strongest managed service offering in the industry."

Under terms of the agreement, Akamai will acquire all of the outstanding equity of Netli in exchange for approximately 3.2 million shares of Akamai common stock, subject to certain closing adjustments. The merger transaction is expected to be accounted for by Akamai under the purchase method of accounting - Akamai.