Monday, August 2, 2010

Delve Networks Steps into the Limelight, Seattle-based OVP is Acquired by CDN Limelight Networks

More news of consolidation within the online video market came earlier today, with the announcement that Arizona-based content delivery network Limelight Networks Inc. has acquired online video platform Delve Networks for an undisclosed sum. Details about the acquisition may be disclosed later this week on Aug. 5th, when Limelight reports its earnings to investors, but is estimated $10 million in common stock and cash which is roughly the amount Delve Networks had raised from investors.

Castro told The Seattle Times that he had been talking to a number of possible buyers before reaching the deal with Limelight. The Seattle-based company was growing rapidly from 20 customers in early 2009 to more than 120 today, and was at the point where it needed to build out a larger sales and marketing team or hook up with a company like Limelight, that has the sales force and reach. Like many others in the saturated online video platform market,  Delve Networks offers a cloud-based end-to-end solution to manage, deliver, publish and measure viewership.

Just a year ago, Delve Networks and Akamai announced a partnership to deliver cloud-based online video publishing solutions, which Delve said at the time, was aimed at challenging Brightcove as the leader in the online video platform space. The deal was not much different from existing relationships Akamai has with other OVPs, such as KickApps, VMIX, Multicast, Onstream Media, VBrick, KIT Digital and Ooyala. Now a year later, Delve has agreed to be acquired by Akamai rival Limelight, and will be offered as part of Limelight's application and will compete not only with Brightcove, but also with Ooyala and Comcast’s thePlatform.

This is Limelight's third acquisition to add value to its CDN offering, following the purchase of mobile ad insertion startup Kiptronic in May 2009 for a reported $12 million and interactive ad pioneer Eyewonder in December 2009 for $110 million. While the terms of the Delve deal were not disclosed, parties on both sides were celebrating the announcement. The entire Delve Networks team of 22 will be joining Limelight the new Video Platform Solutions Group and Alex Castro, who co-founded the privately held company in 2006 and was CEO, is now Vice President and General Manager, Video Platform Solutions of Limelight Networks.

On the Delve Networks blog, Castro wrote:
"Limelight’s team culture, vision, and philosophy are very similar to our own and we feel this is a great fit. They value customer relationships first, think at ‘Internet scale,’ and do a great job of making the very complex seem easy. Even though we are now part of Limelight, all of the things that matter to you will stay the same. 
We’ll still deliver a powerful, yet easy to use, online video platform with content management, analytics, monetization, player customization, and rich APIs. We’ll continue to provide the same level of support we’ve always delivered. And we’ll still work with CDN partners beyond Limelight Networks for content delivery in keeping with our belief that open ecosystems are important."

In an email to Light Reading Cable, Limelight spokesman Paul Alfieri said that they won't be forcing Delve customers to use Limelight as a CDN:
"We're going to continue to offer customers their choice of CDN. Limelight will become a CDN option, and over time as the CDN and Delve teams innovate, we hope to offer some compelling reasons for our customers to use both services together. However, customers will not be required to change anything about their service."
Delve’s video platform includes patented semantic video technology which extracts information from within the video to provide enhanced search, meta-data tagging, and indexing capabilities. Delve has signed up over 120 customers, such as, Cleveland Clinic, American Hospital Association, ESPN, CDW, Standard & Poor’s, Hallmark, Lego, World Vision, and several professional sports organizations.

In the company press release announcing the acquisition, Jeff Lunsford, chairman and CEO of Limelight Networks said:
"As online content consumption accelerates, content producers and online businesses need scalable tools to easily and quickly publish their video and syndicate it to an ever-expanding list of web properties and connected devices. With Delve Networks added to our global computing infrastructure, Limelight Networks now can provide our customers with an at-scale value-added solution for publishing online video, analyzing end-user preferences, and, in conjunction with our EyeWonder and mobility products, monetizing their digital assets."
According to Dan Rayburn, this is a smart deal for Limelight and 2010 is a make or break year for the company:
"While the acquisition won't add much in the way of top-line revenue to Limelight, it does give the company a crucial piece of software to help enterprise customers manage their video assets and also gives Limelight a video analytics component."
Rayburn added that:
"As a result of Limelight focusing on more non-CDN services, it's also interesting to note that I am hearing about companies who would not have though about potentially acquiring Limelight a year ago now keeping a closer eye on the company. While it has always been speculated that Limelight would some day be acquired by a telco, if they continue to move to being more of a SaaS provider, it probably wouldn't be a telco that ends up taking them out of the market."
This deal could be viewed within the online video ecosystem as an example of the CDN industry blurring the lines between the online video publishing and content delivery markets. Online video platforms have gained a greater share of customers across the spectrum of major corporations and SMBs by offering scalable plans at affordable rates, extensible modules and content delivery solutions. Over the last few years, with the rise of the OVP market, CDNs have been viewed as more of a commodity that just delivers the bits and bytes. But does this acquisition along with the acquisition of Episodic by Google earlier this year, and signs of more consolidation on the horizon –  is the OVP market on its way to becoming a commodity?

About Limelight Networks, Inc.
Limelight Networks, Inc. (LLNW4.24, -0.01, -0.24%) provides on-demand software, platform, and infrastructure services that help global businesses reach and engage audiences online or on any mobile or connected device, enabling them to enhance their brand presence, build stronger customer relationships, analyze viewer preferences, optimize their advertising, and monetize their digital assets. For more information, visit or follow Limelight on Twitter at

About Delve Networks
Founded in 2006, Seattle-based Delve Networks makes it possible for organizations of any size across any industry to realize the potential of online video. Delve’s advanced, easy-to- use and highly customizable online video platform offers all the tools necessary for publishing video online including video hosting, encoding, content delivery, content management, semantic search, metrics, advertising and syndication. By leveraging the power of cloud computing, Delve gives its customers the ability to quickly adapt as demand for content increases allowing for greater overall scalability, efficiency and reliability. Delve is backed by DFJ Frontier, Intel Capital and Labrador Ventures. For more information, visit