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Digital Island, Inc. (Nasdaq: ISLD) was one of the Nasdaq's few technology winners Monday, rising 1 7/32 to 7 13/16 following news of an alliance with Chinese telecommunications company Jitong Communications, Inc.
San Francisco, California-based Digital Island, which provides Internet content, network and hosting services, said it allied with Jitong in a venture to serve companies in mainland China.
Jitong will offer its customers Digital Island services including content delivery, network and hosting services. The agreement, which Digital Island said is the first of its kind in China, should "dramatically improve" Web performance in the region.
Digital Island said its Footprint network, which allows common Web pages to be stored locally and traffic to be routed efficiently, will avoid the Internet bottlenecks that have characterized Internet performance in China. According to the company, users in China have had to use service or routers in the United States and Europe, tying up lines and degrading performance.
Digital Island chairman and chief executive officer Ruann F. Ernst said the agreement "accelerates" the company's progress in Asia.
"This alliance fits perfectly with our long-term strategy to develop creative and cost-effective ways to quickly extend our network," Ernst said.
Jitong Communications chairman and president Qi Mingqiu said the alliance will allow his company "to provide a level of quality and breadth of services and products that are unmatched by any of our competitors in today's Chinese data communications market."
Jitong will work with Digital Island to design and build data centers throughout China. The centers, designed to Digital Island's specifications, will be owned by Jitong.
Digital Island, meanwhile, is expected to benefit from Jitong's presence in more than
76 top Internet access points in major Chinese cities. The companies will
also refer customers to each other, giving Digital Island openings in key
cities like Hong Kong, Shanghai and Beijing.
