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The differentiated service approach has been proposed as a potential solution to provide quality of service (QoS) in the next generation Internet. The ultimate goal of end-to-end service differentiation can be achieved by complementing the network-level QoS with service differentiation at Internet servers. In this paper, we have presented a detailed study of the performance of service differentiating Web servers (SDIS). Various aspects, such as admission control, scheduling, and task assignment schemes for SDIS, have been evaluated through real workload traces. The impact of these aspects has been quantified in a simulation-based study. Under high system utilization, a service differentiating server provides significantly better services to high priority tasks compared to a traditional Internet server. A combination of selective early discard and priority-based task scheduling and assignment is required to provide efficient service differentiation at the servers. The results of these studies could be used as a foundation for further studies on service differentiating Internet servers.