Limelight, a cloud-based content delivery network (CDN) platform provider is reportedly negotiating a deal to be purchased by Verizon (NYSE: VZ).
Dan Rayburn, principal analyst with Frost & Sullivan and EVP of StreamingMedia.com, wrote in a blog entry that rumors of a potential sale emerged during the annual Content Delivery Summit that was held in New York City last week where various attendees discussed how Limelight Networks "is in talks to try and sell the company to Verizon and is desperate to make a deal."
Purchasing Limelight would make strategic sense for Verizon as it would enhance Verizon Digital Media Services (VDMS) with an established set of customers, network elements and associated sales and product support
"Verizon should be a lot further along with their digital media business than they are right now, and they really need to do a few acquisitions to get there," Rayburn wrote. "If they do, there is no reason why they can't be a real competitor in the market, but I don't think they can get there on their own, simply by building everything in-house, for their commercial CDN offering."
When asked about Limelight, Lynn Staggs, a Verizon spokesperson told FierceTelecom that "we don't comment on speculation."
Despite the potential of a deal with Verizon, Raybrun added that a number of customers have cited issues with the performance of Limelight's service and a number of key sales leads have left the company.
But it appears Verizon is not the only potential suitor. XO Communications is rumored to also be interested in purchasing Limelight. Such a marriage isn't that far-fetched as XO's Concentric Solutions division already uses Limelight's managed CDN platform as the foundation for its own CDN offering.
For more:
- StreamingMedia.com has this post
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