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Akamai to Snap Up Dolce's Verivue

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Akamai Technologies Inc. (Nasdaq: AKAM) has offered an undisclosed amount of cash to acquire Verivue Inc. , a content delivery network (CDN) software startup run by Jim Dolce that counts Comcast Ventures and Arris Group Inc. (Nasdaq: ARRS) among its investors.

"From a balance sheet perspective, the transaction is immaterial," an Akamai spokesman said via email, noting that the deal is expected to close by year's end.

Akamai said it will use Verivue's software to complement and accelerate the deployment of Aura Network Solutions, a line of managed and licensed CDN products specifically designed to help network operators build their own CDN capabilities. Akamai is pitching Aura to both fixed line and mobile operators, placing the product in competition with Alcatel-Lucent (NYSE: ALU)'s Velocix platform, which has been deployed by Time Warner Cable Inc. (NYSE: TWC).

Verivue originally focused on high-capacity servers and switches for CDNs and video-on-demand systems, but became more software-oriented after its 2010 acquisition of CoBlitz, a maker of caching technology developed at Princeton University. Verivue used that to develop OneVantage, a content delivery platform that lets network operators utilize two or more CDNs. (See Verivue Buys CoBlitz to Help Telcos.)

On the cable front, Cox Communications Inc. uses Verivue's software to manage TV Connect, the MSO's multi-screen app for tablets and other connected devices. When Verivue was still focused on hardware, it signed Canadian cable operator Shaw Communications Inc. as an early customer. And in addition to an investment in Verivue, Arris cut a deal in 2009 to integrate Verivue's technology with its video platform for service providers, but that agreement didn't produce much new business for either side. (See Cox to Stream Live TV to Tablets , Arris Pumps Up Video With Dolce's Verivue , Verivue Tech Gets a Toehold at Shaw and Cracks Form in Verivue/Arris Partnership.)

Westford, Mass.-based Verivue has about 60 employees, but it's not yet clear how many of them, including CEO Jim Dolce, will be retained once the deal closes.

"It is premature to comment on the specifics at this time," the Akamai spokesman said with respect to the fate of Verivue's personnel. "We are still in the early stages of the integration planning and will be working on that more closely between now and closing. Having said that, Verivue has a strong team of engineers and sales relationships with the operators and that is a valuable talent pool. This acquisition is focused on the talent and the technology."

Verivue, founded in 2006, has raised more than $85 million.

Why this matters
Akamai is already a kingpin among CDN providers, but the Verivue deal gives it some key caching capabilities and some relationships with service providers that are developing their own CDNs for multi-screen video services and applications, or looking to interconnect with third-party CDNs.

The acquisition, though immaterial financially to Akamai, will also help the CDN specialist sharpen its competitive edge compared with other players in the CDN ecosystem, including Alcatel-Lucent, PeerApp Ltd. and Limelight Networks Inc. (Nasdaq: LLNW).

For more

— Jeff Baumgartner, Site Editor, Light Reading Cable

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