Limelight Networks Inc. (Nasdaq: LLNW) is poised to lock horns with the likes of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s thePlatform Inc. and Brightcove Inc. after the content distribution network (CDN) specialist notched a deal to buy video management and syndication startup Delve Networks.

Limelight isn't disclosing the financial terms of the cash and stock deal, but Limelight reportedly valued Delve at about $10 million -- about the amount the four-year-old firm has raised from investors, which include DFJ Network and Intel Capital . (See Limelight Buys Delve Networks.)

Delve says its cloud-based platform for video management, publishing, and syndication has scored more than 100 customers, including ESPN, Hallmark, and Standard & Poor's, so it does have some revenues coming in the door. However, Limelight will be looking to extract value by beefing up the capabilities of its CDN with the addition of Delve's cloud-based video publishing and analytics services and offer more direct competition in the budding "TV Everywhere" arena.

Although Delve will give Limelight the capabilities to help companies build their own online video storefronts, the deal's coming into place as some major cable operators, including Comcast and Time Warner Cable Inc. (NYSE: TWC), strive to create their own video-optimized CDNs. Among those examples, Comcast plans to use its CDN to expand its own video-on-demand capabilities, but could end up creating business lines that compete with Limelight's traditional CDN offerings and its newly acquired video management capabilities. (See Comcast's 'Project Infinity' Takes Flight and Cable Thinking Big With Video-Focused CDNs .)

Limelight isn't forcing Delve's customers to use Limelight's CDN, though it wouldn't mind it if they all decide to migrate over.

"We're going to continue to offer customers their choice of CDN," Limelight spokesman Paul Alfieri said via email. "Limelight will become a CDN option, and over time as the CDN and Delve teams innovate, we hope to offer some compelling reasons for our customers to use both services together. However, customers will not be required to change anything about their service."

Alfieri confirmed that all of Delve's employees (about 20) will stay with the company and continue to be based in Seattle. Delve founder and CEO Alexander Castro is joining Limelight as VP and GM of video platform solutions at Limelight.

Delve marks Limelight's second acquisition within a year. In December, it paid $110 million to buy ad-serving firm EyeWonder Inc. Earlier in 2009, it snapped up mobile advertising firm Kiptronic Inc. (See Limelight to Buy EyeWonder and Limelight Buys Kiptronic, Vows to Remain 'Open'.)

UPDATE: Castro says the timing of deal was right because Delve was pondering growth strategies that would have required a greater investment in marketing and sales -- two components that Limelight already has.

He also views Brightcove as a closer competitor to Delve's historic business focus than thePlatform, noting that Comcast-owned unit is geared to serve larger, Tier 1 broadcasters that require more highly customized online video publishing systems.

Although pursuing Tier 1s and taking on thePlatform's market more directly isn't on his near-term priority list, he didn't rule it out. "Being part of Limelight may give us some opportunities that weren't available to us prior to the acquisition," he says.

Marty Roberts, VP of sales and marketing for thePlatform, believes the deal may signal a wave of consolidation in an online video publishing market that's teeming with more than 40 competitors. And that's fine by him. "We'd welcome in less noise and a little more signal," Roberts says.

— Jeff Baumgartner, Site Editor, Light Reading Cable