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Netflix Lifts Limelight Networks: What You Need to Know

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What: Shares of Limelight Networks (Nasdaq: LLNW  ) soared more than 35% on news that Netflix (Nasdaq: NFLX  ) would award it a significant chunk of its online video delivery business.

So what: Earlier today, industry analyst Dan Rayburn reported the news in a blog post. His sources suggest that Akamai Technologies (Nasdaq: AKAM  ) hadn't performed well enough delivering for Netflix and that Limelight and Level 3 Communications (Nasdaq: LVLT  ) would take over as the company's principal content delivery network partners.

Now what: Akamai and Netflix have since confirmed in media reports they're in talks about renegotiating their relationship but will continue working together. More importantly, in a Reuters interview, a Netflix spokesperson denied Akamai was providing inferior performance.

So while Limelight and Level 3 probably stand to gain some business as a result of Netflix and Akamai negotiating, the $10 million to $15 million Rayburn estimates is at stake is barely more than a rounding error for Akamai, which is on track to generate more than $1 billion in 2010 revenue.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Akamai at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.

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Tim Beyers

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at or send email to For more insights, follow Tim on Google+ and Twitter.

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Related Tickers

11/27/2015 12:59 PM
AKAM $57.90 Up +0.22 +0.38%
Akamai Technologie… CAPS Rating: ****
LLNW $1.68 Down -0.04 -2.33%
Limelight Networks… CAPS Rating: **
LVLT $50.74 Down -0.10 -0.20%
Level 3 Communicat… CAPS Rating: **
NFLX $125.44 Up +1.28 +1.03%
Netflix CAPS Rating: ***