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Fresh off landing a high-profile video hosting deal with Netflix (Nasdaq: NFLX ) , it looks like Akamai Technologies (Nasdaq: AKAM ) is still hungry for more of that massive-bandwidth candy. This week, Akamai exchanged promise bands with video content technologist Brightcove in a far-reaching partnership that will show off Akamai's video-streaming prowess to a metric truckload of new customers.
Privately held Brightcove is famous for setting its customers up to handle online video content in new ways including display technologies, monetization tools, and publishing services. The customer list is long and rich, including such media luminaries as Walt Disney (NYSE: DIS ) subsidiaries Marvel and Buena Vista Television, AOL (NYSE: AOL ) , and Discovery Communications' (Nasdaq: DISCA ) flagship Discovery Channel. When you're watching videos on these sites -- and thousands of others -- you're unwittingly enjoying a Brightcove solution.
While Akamai is no stranger to many of these companies to begin with, its video delivery services could always use some free marketing; that's what this kind of contract provides. High-definition video streams and downloads are among the most bandwidth-hungry online applications, and Akamai wants to be known as the solution for online traffic bottlenecks.
Just like in the Netflix scenario, Limelight Networks (Nasdaq: LLNW ) moves over to make room for Akamai in a non-exclusive account-sharing lovefest. But make no mistake: Akamai really wants all of this business to itself in the end. Partnering with Brightcove gives Akamai access to video-handling technologies that would be difficult and expensive to develop on its own.
If Akamai likes what it sees in this partnership, I would not be surprised to see a buyout happening down the road. The company has more than $500 million of cash equivalents on hand and no long-term debt at all. Google (Nasdaq: GOOG ) was rumored to buy Brightcove last year for $500 million to $700 million (which never happened, and Google bought smaller competitor Episodic instead), and if that valuation still holds, Akamai would need some new funding.
I think the wholesale combination would be much stronger than Brightcove filing for a separate IPO and Akamai getting on with just a partnership. Akamai is a screaming buy anyway but could always get even stronger. Would it be worth getting into debt for? Discuss in the comments below.