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When Limelight Networks (Nasdaq: LLNW  ) pummeled analyst targets this week, investors saw it coming a mile away. You could say that chief rival Akamai Technologies (Nasdaq: AKAM  ) set the stage with its own terrific fourth-quarter report, since both stocks have gained about 18% in the last two weeks. But that would be far too simplistic. In fact, Limelight's shares started rising before Akamai grabbed the soapbox.

With a non-GAAP net loss of $0.01 per share on $46 million in revenue, Limelight nudged past Wall Street's estimates. That's a modest 6.8% year-over-year gain in sales from continuing operations; Limelight sold its EyeWonder operation to DG FastChannel (Nasdaq: DGIT  ) in September. For Limelight, the ad business was a money-losing distraction at best. For DG, that purchase plugs into a growth-by-acquisition strategy. Different strokes for different folks.

So Limelight is refocusing on its core operations, including a 55% year-over-year boost to its enterprise cloud storage operations and blistering 160% growth in its video delivery platform. The Netflix (Nasdaq: NFLX  ) account plays a large part in that video-based success, and CEO Jeff Lunsford is happy to discuss it without naming names: "This [content delivery network] business is unique and valuable, having funded and fueled the construction of a globally distributed platform that solves what we believe is one of the hardest problems in cloud computing -- that of delivering broadcast quality video to hyper-connected viewers across 800+ device types across the globe."

Limelight doesn't get that juicy morsel all to itself, sharing the Netflix account with Akamai since time immemorial and with Level 3 Communications (Nasdaq: LVLT  ) since the end of 2010. But Limelight is smaller than either of its video co-hosts, and feels the effects of this big deal so much more keenly. Limelight is going all-in on its cloud-computing bet, and it's not a bad idea.

Fool contributor Anders Bylund owns shares of Netflix but holds no other position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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Related Tickers

10/26/2016 4:00 PM
LLNW $2.04 Up +0.15 +7.94%
Limelight Networks CAPS Rating: **
AKAM $67.70 Up +8.63 +14.61%
Akamai Technologie… CAPS Rating: ****
DGIT.DL $0.00 Down +0.00 +0.00%
DG FastChannel CAPS Rating: *****
NFLX $126.97 Up +0.46 +0.36%
Netflix CAPS Rating: ***