Research firm Kaufman put "hold: ratings on content deliver networks Akamai (AKAM) and Limelight (LLNW) with price targets below where the stocks currently trade.
The bull theory on the stocks was that as internet delivery of video and data moved up, these two companies would do exceedingly well as the two leader in quality media delivery.
What the market did not expect was that Level 3 (LVLT) would enter the business as a low cost provider using its international IP backbone.
But, that has not been the worst of it. Companies can get into the CDN market for a few hundred thousand dollars. And, the market is flooded with capacity. Some of the larger private operation are Mirror-Image, OnStreamMedia, RapidEdge, Swarmcast, and Panther Express, and EdgeCast.
Until some of these smaller CDNs are bought out or fail out of the market, it is going to be hard for AKAM and LLNW to move up.
Douglas A. McIntyre
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