Delve Networks, the Seattle-based online video hosting and "search inside" video technology start-up, said today it has been acquired by Tempe, AZ-based Limelight Networks (Nasdaq: LLNW). Though financial terms of the deal were not disclosed, blogger Dan Rayburn, at Businessofvideo.com, reported the deal valued Delve at about $10 million.
Delve, founded in 2006 (then known as Pluggd) by co-founder and chief executive Alex Castro, transitioned from audio podcast search to the burgeoning video market in June 2008. The company provides software-as-a-service for online businesses looking for ways to publish, host, and code videos online, as well as manage channels, playlists, video search, metrics, analytics, and advertising.
The company raised $1.65 million in equity out of an $11.3 million offering and said it had more than doubled revenues in an announcement in May 2009. Delve currently has over 100 customers, including ESPN, Hallmark, Lego, the American Hospital Association, Standard & Poor's, and US Lacrosse. Limelight currently has 328 employees. The company generated $34.9 million in profit on $131.7 million in revenue last year.
Although Delve will now be owned by Limelight, which offers global computing and media delivery services for businesses, Delve co-founder the chief executive Alex Castro says "nothing really is going to change."
"We're going to be an independent business unit. I'm going to continue to run it. I know the team is really excited," Castro says. He added that Delve sees Limelight as a company that is aligned with its vision of the market. The two companies began talking about a possible partnership a year and a half ago, during which Castro said Delve turned down other offers.
"We just feel like there's a lot of alignment. We've had people approach us on and off again for the last year," he says. Limelight has a similar company culture, Castro says, adding, "Frankly, we were just pretty damn excited about Limelight and the future of the company."
Delve's 20 employees will continue to work out of the company's existing Seattle office. And Castro himself will stay on board with a new title -- vice president and general manager of the Video Platform Solutions Group. And though Delve would not comment on the specifics of its potential to drive profit growth for Limelight in the future, Limelight vice president of marketing Paul Alfieri characterized the deal as "a growth oriented merger."
"Two companies [are] seeing a great big opportunity in online video and looking to capitalize on that. Any changes you see are going to be positive in our company's ability to develop together," he said.
Limelight plans to hire more people into its new Delve Networks operation in Seattle, although Alfieri didn't say when or how many people will be added. "One of the great things is that Delve has got some great innovation, and Limelight has got some interesting resources, so I think you can assume we're going to manage that for growth ... this is an acquisition on Limelight's side for growth, and Alex and the team are now going to have extra resources to expand on Delve's mission."
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Thea Chard is the Assistant Editor for Xconomy Seattle. You can email her at [email protected] or follow her on Twitter at http://twitter.com/theachard.
