In the late 90’s where internet start its booming, The content(Web page/Images/Video/MP3 etc….) was delivering from a central server. This affects the loading and response time if large number of users hits the same server at a time. So people strats to thisnk how to deliver the contents more fastly. One solution was deploying the content across multiple, geographically placed servers. It will make the pages load faster from the user’s perspective. This is called as a CDN. “CDN stands for content delivery network or content distribution network”. This service is effective in speeding the delivery of content of Web sites with high traffic and Web sites that have global reach.
So, CDN is a network of servers that delivers a Web page(Mostly static contents like html pages, Images, Videos, CSS, JS etc..) to a user based on the geographic locations of the user. A CDN copies the static contents of a Web site to a network of servers that are dispersed at geographically different locations, caching the contents of the page. When a user requests a Web page that is part of a CDN, the CDN will redirect the request from the originating site’s server to a server in the CDN that is closest to the user and deliver the cached content. The CDN will also communicate with the originating server to deliver any content that has not been previously cached.
In fact, 80-90% of the end-user response time is spent downloading all the components in the page: images, stylesheets, scripts, Flash, etc. This is the Performance Golden Rule and idea behind CDN. Rather than starting with the difficult task of redesigning the application architecture to speed up the page load time, it’s better to disperse the static content. This not only achieves a bigger reduction in response times, but it’s easier.(From yahoo performance Guide.)
The closer the CDN server is to the user geographically, the faster the content will be delivered to the user. CDNs also provide protection from large surges in traffic. The process of bouncing through a CDN is nearly transparent to the user. The only way a user would know if a CDN has been accessed is if the delivered URL is different than the URL that has been requested.

Some large Internet companies like google, AOL, MSN etc.. own their own CDN, but it’s cost-effective to use a CDN service provider, such as Akamai Technologies, Mirror Image Internet, or Limelight Networks. For start-up companies and private web sites, the cost of a CDN service can be prohibitive as the underlying network mechanisam is huge cost effective, but if target audience grows larger and becomes more global, a CDN is necessary to achieve fast response times.
http://developer.yahoo.com/performance/rules.html
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