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Cable/Video

Akamai Swoops on Red Swoosh

Content delivery network provider Akamai Technologies Inc. (Nasdaq: AKAM) today announced the purchase of peer-to-peer (P2P) delivery specialist Red Swoosh Inc. in an all-stock transaction valued at around $15 million. (See Akamai Buys Red Swoosh.)

Red Swoosh was founded in 2001 by Travis Kalanick, who had previously developed Scour, one of the first P2P file-sharing networks. Scour was shut down after a $250 billion lawsuit filed by the MPAA and RIAA.

After Scour filed for bankruptcy in 2000, Kalanick turned over a new leaf and began using his powers for good, developing Red Swoosh to allow content distribution for noncommercial filmmakers, game developers, and other publishers.

The company managed to hang on for the next four years, until Red Swoosh was recapitalized in 2005 and raised $1.7 million from billionaire investor Mark Cuban. Since then, it has been used to serve up downloadable video content for Cuban's HDNet. Red Swoosh has also counted IGN Entertainment, IFilm, and Ubisoft as customers.

Like BitTorrent Inc. , Red Swoosh's file distribution is P2P-based. Unlike BitTorrent, Red Swoosh allows content distributors to "swoosh" files over the Web, and its files are tracked on a single centralized tracker. Red Swoosh offered an ad-supported version of its service for free, with a "premium" version with no adds for $0.03 per user per month with a $20 per month minimum.

An Akamai spokesman said the purchase was "a technology acquisition" and that the company gained "really skilled software developers and some unique client-side technology that Red Swoosh has developed, which will further augment its own content distribution business."

Cambridge, Mass.-based Akamai said the Red Swoosh team will be integrated into its existing California engineering team.

— Ryan Lawler, Reporter, Light Reading

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