Limelight Networks, the content delivery technology behind such Web 2.0 leaders as MySpace, Facebook and XBoxLive, has received a new round of funding. Limelight is also widely believed to be the content delivery provider for YouTube. Goldman Sachs led the round of $130 million invested so that Limelight can increase its capacity. Limelight is the number two player in the online content delivery network space, behind Akamai, the service provider for Apple’s iTunes. Panther Express, another content delivery network, received funding this week as well.
This round of investment in Limelight means that one of the key providers of media delivery services, a keystone function in the new web landscape, has received a big boost in strength and a big ally in Goldman Sachs. And this has been finalized at what some people are calling a post-net neutrality time.
Founded in 2001, the Tempe, Arizona based company received received $15 million in funding from the Silicon Valley Bank last summer.
Ordinarily I wouldn’t write about an infrastructure investment here. Net neutrality makes this relevant, though. Advocates of the (now arguably deceased) movement to prevent a two tiered internet consistently point to the importance of cheap bandwidth in making innovation happen. YouTube, for example, sucks bandwidth like there’s no tomorrow and if they had to pay a premium rate (were the net not neutral) then they may not have been able to afford to launch in the first place.
That’s the argument, but the reality is that at a certain point it’s not just Google or YouTube dealing unmediated with the companies that own the “tubes,” if you will. Companies like Limelight stand in the middle. Limelight in particular is a vital part of the infrastructure for some flagship Web 2.0 companies. Not to mention they have been the advertiser that has kept Doug Kaye’s excellent ITConversations alive - they deserve thanks for that.
Just as online storage becoming a commodity thanks to services like Amazon’s S3 and Omnidrive has enabled startups to innovate without having to provide for their heavy data storage needs themselves - so too do service providers like Limelight take a big burden off of online media companies and make further innovation possible.
This newest funding announcement will help make a key friend of innovation even stronger in a potentially contentious time ahead.
Comments
Im happy for Limelight Networks.
I talked to them a while back.
Their setup fee is a quarter of what akamai charge and their bandwidth charges are lower. From what I’ve heard they ARE the streaming provider for Youtube. Their Q2 revenue increased more than 35% to well over $14 million which would seem to indicate that, since Youtube has been on fire throughout that period.
I agree it will be interesting to watch how the net neutrality debate will affect the business model and the relationship of internet giants, content distributors and tier 1 carriers.
Could not the market self-adjust and bring things back to equilibrium, no matter what direction net neutrality spills?
Its nice to see some coverage of content delivery services. They play a very important part in services which users take for granted. More often than not normal users just go ga ga over the web application or service but seem to forget the delivery technology behind it.
They’re definitely one of the best out these days. Congrats
Anything with the “stamp of approval” of Goldman Sachs has to have something to it… nice work boys.
I too am a huge fan of IT conversations. They have some of the best podcasts that you could ever ask for..
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