Where in the world?

You can't push an ad for Viagra in Singapore, where it's illegal. But Digital Island CEO Ruann Ernst can spare you -- showing where users are located when they log in.

Published February 28, 2000 5:00PM (EST)

Internet time indeed. Less than three years ago, Digital Island was busily carving out a nice little niche for itself by helping a select number of corporate clients accelerate intranet traffic across a high-capacity private network. Not a bad business, really, but very small beer in comparison to what's been brewing more recently at Digital Island, where months of wheeling and dealing have helped to put a nice little head on things. Digital Island is now working feverishly to extend e-business delivery capabilities to every nook and cranny of the globe.

The conglomeration process picked up a whole lot of steam in December with the finalization of the company's merger with Sandpiper Networks, which served to fuse Sandpiper's content-delivery capabilities with Digital Island's data delivery and hosting services -- as well as its global string of data centers. That was enough to encourage Sun Microsystems and Inktomi to jump on board not just as technology partners but also as significant investors, no doubt with an eye to building the world's dominant infrastructure for interactive e-business. Real Networks had already announced it would work with Digital Island and Inktomi to enable advanced media streaming across the network and, in January, Digital Island managed to expand on this by acquiring Live On Line, a leading supplier of live multicast and on-demand streaming media services.

Ruann Ernst, Digital Island's hard-charging chairman and CEO, is at the helm -- living life on fast-forward and developing a real taste for the rough-and-tumble.

Digital Island is one of the better company names I've come across -- it sounds more like prime-time programming than high-speed networking. Still, given all the strategic partnerships you've entered into over the past few months, wouldn't "Let's Make a Deal" be more apt?

Yeah. Why didn't we think of that? The thing is, we're looking to provide the most robust global e-business infrastructure possible. No one company can do it all. It requires selective strategic partnerships to deliver what enterprises need. And those partnerships have to be executed in Internet time. So yes, strategic deals are important to us, and we'll continue to aggressively pursue those that we think are beneficial to our customers.

Improving performance at the edges of the network has been a big story for you right along, but does the strength of that story get diluted as the pipes and switches of the public Internet continue to get bigger and faster?

Well, actually, what we've promised all along is faster, better, guaranteed and richer end-user experiences. That's really what's most important. And we've always made the trade-offs that were necessary between bandwidth and storage at the edge of the network or at the heart of the network, for that matter, to enhance that experience. Our job is to use the best technology available at any point in time. Part of that, of course, has to do with being the leader at pushing content to the edges, but it's just as important to be able to guarantee the round-trip response. For example, it doesn't do E-Trade much good to be able to stream a video clip providing vital background on a company if potential traders don't have enough bandwidth to be able to respond immediately with orders.

As to whether we'll ever get to the point where bandwidth is free, I have to say I doubt it. Ultimately, there will always be some trade-off between where to put computer power and storage power and where to use bandwidth in a truly intelligent, distributed network. It's not just about the size of your pipes. It also has to do with where the content is hosted and many other issues.

You've made the claim that your proprietary Footprint technology makes it possible to deliver content more efficiently while dramatically improving overall Web site performance. How will you be able to make good on that?

The Footprint technology, which is patent-pending, contains very sophisticated algorithms that allow us to keep a monitor on the Internet so we know where the congestion points are and how to navigate around those so as to get content to end users as fast as possible. And by "content," I'm really referring to large software files or streaming media things that are quite large and complex. Footprint also determines the best routing for the user's response.

In terms of helping clients strengthen their e-business offerings, you also claim to imbue content delivery with "geographic intelligence." What exactly does that mean? And how does that contribute to improved e-commerce?

Our geographic intelligence is enabled by a capability we call TraceWare. This, too, is patent-pending, and it contains very sophisticated algorithms and a master database that essentially informs an application about where in the world the user is located, with 96 percent accuracy. That may not seem terribly important. But on the Internet, you can't always even tell what country a user is coming from. So let's say you're in the business of marketing music around the world -- selling CDs -- and that as part of your program you offer visitors to your Web site samples from that week's top 10 CDs in hopes that they'll hit the "buy" button while listening to one of them. But if someone signs on in Brazil, my guess is that the top 10 CDs there will be different from the top 10 in Sweden.

What TraceWare does is let you know right off what language the interface should use and which top 10 clips to present. It also helps you determine delivery time, the right payment method to use and much, much more -- all without putting the customer through very much. The point is that this can have great value for any international e-business effort. Net Gravity, in fact, takes advantage of TraceWare to determine what ads it can place on a country-by-country basis. After all, why place ads for products that can't be sold? You can't pump an ad for Viagra into Singapore, for example, because it's illegal there.

Since you've raised the issue of advertising, let's slide right over into the media world for a bit. AOL's recently announced intentions to acquire Time Warner have largely been characterized as a broadband play. Given that AOL already is a customer of your content delivery service and that you've already announced plans to integrate those same services into the Road Runner broadband cable network (in which Time Warner has a huge interest), how is the AOL Time Warner deal likely to affect you?

Let me add just one more piece to that: Warner Brothers is also a customer of ours, which does create an interesting scenario. We, of course, are very interested in the proposed acquisition and believe that, if anything, it will just increase our opportunities, since we already have established relationships with so many of the involved parties. But even beyond the synergies that come out of the acquisition itself, we feel we're well aligned with the goals the combined companies will ultimately pursue.

What are the strategic implications?

Whether you're talking about AOL or Road Runner, their content distribution focus so far has revolved around the last mile. And AOL Time Warner is certainly going to have plenty of content to move around. Put those two points together and I think you can see that this is likely to create some significant global infrastructure opportunities that we'll be more than ready to satisfy. What could be better? We're not in the local access business or the content business. They, on the other hand, aren't in the global infrastructure business.

Another merger I'd like to focus on is your own with Sandpiper Networks. Looking back just a few months, you'd have to say that what amounted at the time to a $630 million acquisition looks very much like a steal today especially given that Sandpiper's principal competitor, Akamai, currently enjoys a market valuation somewhere in the $20 billion neighborhood. That's the good news. The bad news is that, with all that money flowing in, Akamai is beginning to look like the 900-pound gorilla of content delivery. Does that keep you up at night?

One certainly has to recognize that a player like that is on the horizon. But it doesn't keep me awake at night because the market is so huge. No matter how fast Akamai moves, there are plenty of customers that need the sort of e-commerce service we offer. Also, while both companies provide for content delivery, I happen to think our technology is much better. And what's even more important is that we also provide the ability to handle the round trip to complete the transaction. And that's something Akamai doesn't do. So I think they have a piece of the solution, but not the total solution. And we believe corporations moving to e-business will want a better integrated approach.

So you're saying that Akamai is a content pusher while you're an e-business solution?

An e-business delivery network, actually. We'll be happy to have other people handle the applications. We just want to be the carrier.

By Mark Compton

Mark Compton monitors technology trends from a comfortable perch midway between the Silicon Valley and Oregon's Silicon Forest.

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