Inktomi Plans to Buy Online Broadcast Firm FastForward

Inktomi Corp. said Wednesday it is adding to its toolbox of technology that powers some of the Internet’s most popular sites with a plan to purchase online broadcasting company FastForward Networks for $1.3 billion.

Inktomi believes the Web broadcasting technology developed by privately held FastForward will give it a leg up in the race to deliver the type of live high-quality video and audio that will attract more traffic to Web sites.

Foster City, Calif.-based Inktomi will pay for the acquisition with 11.9 million shares of stock. Inktomi’s shares fell $2.25 to $108.75 on Nasdaq.

The acquisition continues Inktomi’s evolution from one of the Internet’s pioneering search engine companies to a diversified networking business. Besides providing search engines, Inktomi also supplies online traffic management tools that speed the content delivery over the Web. Inktomi’s customers include America Online and Excite@Home.

As the online pipes delivering data through the Internet are widened, analysts expect the online broadcasting market to grow rapidly. By some analysts’ estimates, the market for live Internet broadcasts could soar from virtually nothing today to $40 billion in 2003.

Inktomi believes FastForward will add $35 million to $40 million in revenue in 2001. Inktomi earned $4.5 million on revenue of $61.5 million in the quarter ended June 30.

Internet broadcasts largely have been unsuccessful. One of the most ballyhooed disappointments came last year when Victoria’s Secret promised a live online broadcast of a fashion show, but the transmission crashed when too many people tried to access the site.

FastForward’s technology is supposed to avoid those kinds of crippling bottlenecks. FastForward most recently provided a live online video and audio feed of a college football game between the University of Nebraska and San Jose State University during Labor Day weekend without any major hitches.