Exodus sinks $637.5 million into distribution firm

Web hosting firm Exodus Communications today invested $637.5 million in Mirror Image Internet, an online content distribution company.

Exodus, which maintains and monitors computer equipment necessary for many major Internet companies, will use Mirror Image's technology in its data centers to speed the distribution of Internet content.

The significant investment serves as the latest move in the red-hot market for Internet content caching and distribution. A handful of start-up firms offer technology intended to make the Internet faster by storing Web pages in locations physically closer to Net users. Others, particularly the satellite-based companies, also offer systems designed to quickly distribute streaming audio and video clips.

Companies such as Mirror Image, Akamai Technologies, Digital Island and Adero aim to reduce online congestion by caching copies of frequently requested Web content within service provider networks. Akamai went public in a stellar IPO last November, shortly after Digital Island bought content distributor Sandpiper Networks.

Exodus' investment comes on the heels of two IPO applications by satellite content distributors iBeam Broadcasting and Cidera. Edgix, another satellite-based content distributor, remains privately held.

Mirror Image is a subsidiary of Xcelera.com.