Red Swoosh

» see redswoosh.net as it lived, on the wayback machine

~ the obituary ~

Akamai's 10-Q records it in one line: on 12 April 2007 the company acquired all of the outstanding common and preferred stock of Red Swoosh in exchange for approximately 350,000 shares of Akamai common stock. The audited number was 348,528 shares and a total purchase price of $18,690,000, of which $13,188,000 was goodwill. Akamai's press release the same day preferred a smaller figure, approximately $15 million net of cash acquired, and both are true: the company being bought had $2.677 million of cash sitting in it.

Red Swoosh existed because Scour did not. Scour had been a multimedia search engine with a file-sharing arm, and in the summer of 2000 twenty-nine Hollywood plaintiffs sued it for a headline figure of $250 billion, which ended in a Chapter 11 filing that September and a settlement of one million dollars. Travis Kalanick and Michael Todd came out of that and started again in 2001, this time with a product built so that the rights holders would be the customers rather than the plaintiffs. Fortune later counted that twenty-three of the twenty-nine companies that had sued Scour ended up with content moving through Red Swoosh or on its client list. Kalanick's own word for the company was revenge.

The thing itself never reached me and was not built to. The software ran on Windows 2000 and XP and nothing else, listed in Add/Remove Programs as Red Swoosh EDN Client, and it was aimed at American media companies shipping large files to American consumers on American broadband. By 2006, the year it finally had something anyone could sign up for, my end of the wire in Ankara was the constraint, and cleverness at the publisher's end does not move that. You do not install a downloader to speed up a server when the slow part is the copper into your building.

~ the case file ~

~ the number he keeps telling ~

The story Kalanick has told most often about this company is the tax one. By his account, given at FailCon in 2011 and repeated since, Red Swoosh owed the IRS around $110,000 in income taxes it had withheld from employees and not handed over, which he describes as the kind of thing that pierces the corporate shell and puts an officer in prison. He has placed the blame on Todd, who left at the end of September 2001. Todd disputes it. Business Insider, reporting the row in 2014, said it had obtained a contemporaneous email that appeared to show Kalanick's own participation in the arrangement, and two later book-length accounts give two further versions.

None of the $110,000 appears in a filing, a court record or any report from the time. It belongs to the man telling it. What anyone else can confirm is narrower: the money was found, and neither founder was prosecuted. What the filings do show is the shape underneath the anecdote: a company that went months without paying people in 2001 and was down to two employees by 2002. Nothing anyone could sign up for existed until 2006.

~ who the filing paid ~

Because the consideration was stock, Akamai had to register the shares, and the resale prospectus lists every holder by name. Kalanick appears with 114,365 shares, just under a third of the company, worth about $6.05 million gross at the price the deal implies. Todd, gone since 2001, still held 16,337 of them, around $865,000. Mark Cuban, who recapitalized the company in 2005 and sat on its board from 8 April that year until 7 November 2006, is listed through Radical Investments LP with 8,753 shares, roughly $463,000 against the $1.7 million that TechCrunch reported him putting in. The filing does not give the terms of the recapitalization, so it does not settle what he actually made or lost.

The institutional money nobody writes about is also there. Crosslink Capital held 81,534 shares across four vehicles and August Capital III held 48,198, which together is more than Kalanick's stake. One line in the table reads Unknown, for 69,644 shares, a fifth of the company whose holders the filing could not identify.

~ the client, renamed twice ~

You used it by putting a prefix in front of a URL. Anything behind edn.redswoosh.net became a swooshed link, and the client, once installed, pulled the file from whichever mix of edge servers and other people's machines was fastest at that moment. The free tier paid for itself with an interstitial ad on every fifth download, which you could switch off by paying. The named customers were HDNet, IGN, IFilm and Ubisoft, and the team that served them was six people, who spent a month of 2006 working from Krabi in Thailand while the office moved.

Akamai kept the technology and dismantled the name in stages. redswoosh.net began redirecting to akamai.com/redswoosh in May 2007, and that page, which still said Red Swoosh, an Akamai Company, was serving as late as 7 May 2008. By mid-September it was gone, and the software behind it had been renamed Akamai Network Manager in July and then Akamai NetSession Interface in October, which is what it is still called. The other domain went further afield: redswoosh.com now redirects to nike.com.

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