Limelight Networks (LLNW) has acquired rich media ad company EyeWonder in a deal valued at $110 million.
Dan Rayburn, EVP at StreamingMedia.com and principal analyst at Frost & Sullivan thinks it’s a good deal. His take:
For Limelight, this is a smart move and the immediate affect is two fold. It increases their revenue by a third and more importantly, they are acquiring a company that has 70%+ margins on their business. EyeWonder’s overhead is low since they are not in the infrastructure business and this will allow Limelight to diversify their revenue with a product line that’s not competing solely on price, like we have seen in the CDN space for so long.
Already I am hearing some say that the combined EyeWonder and Limelight ad solution will compete with Akamai’s advertising solution, which is not the case. Akamai acquired acerno to get into the behavioural targeting business. EyeWonder is a platform that allows for rich-media ads on the web and within video games. Two very different ad solutions, solving two very different problems for content publishers.