Content delivery competitors Limelight Networks Inc. (Nasdaq: LLNW) and Akamai Technologies Inc. (Nasdaq: AKAM) fought for Wall Street's attention Friday, driven by Limelight's IPO and an analyst upgrade of Akamai.

Content delivery network (CDN) Limelight Networks began public life today after raising its offer price to $15, above its previously announced (and updated) range of $12 to $14 pre-trade. After opening at $23 and trading in the low-to-mid 20s for the remainder of the day, the stock closed at $22.18, 48 percent higher than its offer price. (See Limelight Raises IPO Price, Limelight Announces Pricing, and Limelight Files for IPO.)

Merriman Curhan Ford & Co. analyst Colby Synesael said Limelight's first day of trading was reflective of investor belief in the long-term prospects for the company and the CDN space in general.

Akamai's stock also traded sharply higher, due in part to an analyst upgrade and in part to the strength of its competitor's IPO. Shares of Akamai rose $3.37 (7.98%) on the day, closing at $45.60.

Akamai benefited early from an upgrade by W.R. Hambrecht & Co. analyst Robert Stimson. Citing more realistic investor expectations and improving trends in the content delivery market, Stimson raised Akamai to "Buy" from "Hold," with a new price target of $50.

In this morning's research note, Stimson wrote, "Given the share price decline of roughly 24 percent since the release of FQ1 results, we believe investors have reset their expectations to a more realistic level, and we believe the stock will trade up if FQ2 results are in line with estimates."

Stimson also expects strength in the content delivery market that will be driven by the Apple Inc. (Nasdaq: AAPL) iPhone and other large-screen smartphone deployments. "We believe the launch of these rich-media capable handheld browser devices will finally give critical mass to the smartphone market and will drive incremental revenues towards established CDN providers."

Synesael believes the Limelight IPO also helped drive Akamai's share price higher. "Akamai benefited from this IPO as well," he said, noting that both companies traded along similar '09 EBITDA multiples.

With the IPO of competitor Limelight Networks on the way, Akamai has been busy over the last several days touting its competitive advantages and making investors and end users more aware of the benefits of its content delivery architecture. The company hosted an analyst conference call with Lehman Brothers on Thursday to talk about its edge routing architecture, and also unveiled a set of tools to view the real-time health of the Internet. (See Akamai Shows Internet Health.)

Limelight's IPO underscores growing interest in the CDN market, where companies like CacheLogic , Level 3 Communications Inc. (NYSE: LVLT), NaviSite (Nasdaq: NAVI), and Panther Express Inc. have joined the incumbents to meet the rapidly growing demand for the delivery of rich media and other content. (See CDN Startups Talk Tough.)

Despite the growing number of CDNs, some analysts believe there could be plenty of business to go around, at least in the short term. "We still don't know how large the market is," Synesael says.

— Ryan Lawler, Reporter, Light Reading