Content-delivery services provider Limelight Networks' (NASDAQ:LLNW) performance so far in 2014 has been nowhere near rivals such as Akamai Technologies (NASDAQ:AKAM) and Level 3 Communications (NYSE:LVLT). Limelight shares are up just 3% in 2014, while both Akamai and Level 3 are up in the double digits. In addition, Limelight's first-quarter results weren't impressive as revenue declined year over year, and its bottom line didn't improve much. So, will Limelight be able to turn around going forward, or should investors stay away from it? Let's take a look.

No turnaround in sight
Limelight reported a loss of $7.64 million, or $0.08 per share, on revenue of $41.2 million. Revenue was down from $45.8 million in the prior-year period, while the loss improved slightly from the year-ago figure of $8.14 million. The reason behind the weak performance can be attributed to Netflix's move to its own content-delivery platform. In the year-ago quarter, Netflix made up 40% of Limelight's total traffic, but this figure came down to 20% in the previous quarter. 

Going forward, Netflix will cease to be a Limelight customer by the middle of 2014. The media-streaming giant is making "substantial investments to build out their own platform," according to Limelight's CEO, Robert Lento. Netflix accounted for 12% of Limelight's revenue in the previous quarter. There's no sign of a revival in Limelight's top line in the near future as it's about to lose a substantial customer.

However, the company is focusing on improving its position. The CEO remains confident regarding a turnaround, because the company is adopting different strategies to get better going forward.

Trying to improve the customer base
To mitigate the loss of Netflix, Limelight is focusing on expanding its customer base. The company is trying to retain its existing customers and add new ones in a bid to strengthen the client base. As a result, Limelight is undertaking a regular survey of its customer base known as Voice of the Customer. The company has completed 75% of the survey so far, and will be addressing the areas of shortfall in customer service. 

After the survey, Limelight has seen a significant improvement in net promoter scores, which is a tool to measure the loyalty of a firm's customer relationships. Because this metric is said to be correlated with revenue growth, Limelight is making progress in the right direction.

In addition, Limelight is receiving positive feedback from customers in Asia and Europe. Recently, a major European satellite-service provider selected Limelight's Orchestrate Content Delivery and Cloud Storage to improve the quality of its over-the-top content, or OTT, and video-on-demand services. Moreover, the Limelight Orchestrate Content Delivery solution was chosen by a major company in the Middle East, which allows any specific frame in a movie to be searchable and discoverable. This solution will enable the specific company to distribute its content to users across the globe.

The Orchestrate solution was chosen by a major U.S. pharmaceutical company, as well. The pharma company chose Limelight as they were launching a new website with an aim to accelerate service and provide an identical high-performance experience to users across the globe. These moves on the part of Limelight to improve customer engagement and win over more customers seem quite promising, and could help it in the long run. But the turnaround won't be as simple as it might seem.

Bigger, more powerful rivals
Limelight competes with bigger and more powerful customers, such as Akamai and Level 3. Both companies have been strengthening their product portfolio and are aggressively trying to gain more market share.

Level 3, for example, is targeting more customers in the enterprise space, and it recently penned an agreement with Microsoft to provide private, direct connections to Microsoft Windows Azure. In addition, Level 3 has a diversified customer base that includes the likes of Amazon Web Services and Digital Realty Trust, and it's also focusing on product innovation in order to retain customers. 

On the other hand, Akamai provides content-delivery services to the likes of Facebook, Apple, Nintendo, Comcast, etc., and has also entered into a deal with Qualcomm to deliver 4K video. Also, Akamai has strengthened its offerings with the acquisition of Prolexic to enhance its cloud-based network and data center security solutions.

Limelight's rivals have been making aggressive moves, and these could hurt it in the long run.

Bottom line
Limelight is in a tough spot. A major customer is moving away, while rivals are bigger and more potent. In such conditions, it's best for investors to stay on the sidelines and wait for a turnaround.

Mukesh Baghel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. 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 has a disclosure policy.