Limelight Networks (NASDAQ:LLNW, news, filings) took another step into the cloud yesterday with the acquisition of Clickability. Clickability is a software-as-a-service provider of web content management tools, meaning they enable their customers to create and manage their website content via their specialized software and distributed server infrastructure. Limelight will take that offering and integrate it alongside its traditional CDN business, video platform, and the EyeWonder advertising services, where in fact it does seem to fit quite nicely.
With this acquisition, Limelight continues to expand its value-added services portfolio, and thus increases the overall revenue opportunity for its products while decreasing its dependence on the products that make up the more traditional CDN sector. In fact, one can see this trend across the CDN sector, which with the possible exception of Level 3 thus far, seems to be set on merging rapidly into the cloud. Akamai itself bills itself primarily as a provider ‘cloud optimization services’. The speculation in recent years that CDN providers would move in the direction of the network and fiber itself simply hasn’t come true directly, although with network operators also moving rapidly toward cloud services perhaps they will wind up meeting in the middle.
The purchase of Clickability cost LimeLight about $10M in stock and cash. It is expected to contribute $4.5-5M in revenue in the second half of 2011, and to be accretive to earnings in 2012.
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