Market Watch

Limelight Networks Buys Video Publishing Firm Delve Networks



Content Delivery Network (CDN) Limelight has acquired online video platform Delve Networks. Delve provides cloud-based video publishing and analytics services on a Software as a Service (SaaS) model. The company will be integrated within Limelight but maintain partnerships with CDNs other than Limelight. The deal is for cash and stock for an amount that has not been disclosed by the companies, however it has been reported as being worth $10m. The move follows Limelight's purchase of campaign management service provider Eyewonder in May 2010 and investment in games streaming company Gaikai announced in July 2010 (see related news updates).

Analysis

Limelights's acquisition of Delve, like its other recent investments, is part of a broader trend for pure-play CDNs to move further up the value chain away from their commodifying core business.
 
Strategies among the top tier CDNs vary, while Limelight has invested in a broad portfolio of services ranging from online advertising to streaming games platforms and Delve's online video platform adds another string to this diversifying bow. By contrast Akamai claims a positive response for its analytics packages a feature that Limelight currently lacks. In addition to widening Limelight's service offering, the purchase strengthens Limelight's IP, with patents granted for Delve's video search and speed recognition software, and enhances Limelight's staff base with Delve's engineering talent.
But CDN acquisitions by no means always result in a diversification of the business: Level 3's 2007 acquisition of Servecast has seen the Dublin-based video platform scale back many of the services that it used to offer clients, and Screen Digest understands become more of an in-house integrator for Level 3's CDN.