Limelight: New Business Deals Are Not a Surprise

When Akamai (AKAM) sued Limelight Networks (LLNW) over patent infringement, many speculated that customers would shy away from Limelight and that it would be hard for the company to sign new business going forward. While Limelight's revenue has been flat for the past three quarters and it has had to focus some of its attention on the legal proceedings, Limelight is still signing new business and expanding its relationships with current customers.

This morning, Limelight announced some traffic numbers for a special online Disney (DIS) event where users could watch the full-length Disney Channel Original Movie “Camp Rock.” What wasn't mentioned in the release is that the Disney Internet Group, which Limelight has worked with for the past few years, has just recently expanded its relationship with Limelight.  It renewed its contract for content delivery services across many of Disney's online properties including Disney Online, ABC.com, ESPN.com, Club Penguin and others. Limelight will be providing a variety of CDN services for on-demand video delivery, webcasting events, website acceleration and professional services.

I have also learned that Microsoft (MSFT), which already has a 5-year deal with Limelight, has just recently expanded its contract with Limelight for a large volume of additional services. Terms of the new business were not disclosed to me but I expect we'll hear more about it on Limelight's next earnings call. I also see that about two weeks ago, Limelight launched a new blog on its website at blog.llnw.com

For me, I'm not surprised to see Limelight still signing new business. Over the past 10 years there have been numerous CDN patent suits across a lot of companies and to date, no CDN has even been shut down and had to turn customers off. I have yet to hear of any CDN customer who has ever been affected by any of the suits and while I'm sure many customers are interested to see what happens in court, it's still about running the content business as usual.

Disclosure: None