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Content delivery network (CDN)

Verizon Scoops Up CDN Provider

Racing to boost its competitive position in the emerging TV Everywhere market, Verizon Communications has struck again, making a deal to acquire another cloud-based video specialist.

Verizon Communications Inc. (NYSE: VZ) announced Monday that it will buy EdgeCast Networks Inc. , a privately owned content delivery network (CDN) provider. One of the fastest growing Internet firms, seven-year-old EdgeCast boasts more than 6,000 customers, including such large North American and European telcos as BT Group plc (NYSE: BT; London: BTA), Deutsche Telekom AG (NYSE: DT), and Telus Corp. (NYSE: TU; Toronto: T).

No terms of the deals were disclosed. But TechCrunch reported Sunday that Verizon will shell out more than $350 million for EdgeCast. Verizon said it expects to close the deal early next year.

The EdgeCast deal comes less than a month after Verizon scooped up uplink for an undisclosed sum. That three-year-old startup, which powers video streaming for the Watch ABC and Watch Disney TV Everywhere apps, focuses on streamlining the uploading and encoding of video streams for TV Everywhere services. (See Verizon Beefs Up TVE Unit.)

As with uplink, Verizon plans to integrate EdgeCast into its cloud-based video services unit, Verizon Digital Media Services . Specifically, the telco said Verizon DMS "will integrate EdgeCast's complementary capabilities to further improve and increase its ability to meet the exponential growth in online digital media content," as well as "broaden its portfolio of site acceleration services for digital enterprises."

EdgeCast, which has raised about $74 million in private funding since its 2006 launch, has made a name for itself in the fiercely contested CDN space despite competing against much bigger, more established companies. Its rivals include Akamai Technologies Inc. (Nasdaq: AKAM), Limelight Networks Inc. (Nasdaq: LLNW), Level 3 Communications Inc. (NYSE: LVLT), and Alcatel-Lucent (NYSE: ALU).

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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