The deal is designed to improve the performance, scalability, and reliability of delivery of media content and online services, including video, music, games, software, and social media.
Debra Chrapaty, Microsoft’s VP of global foundation services, said current digital media initiatives only hint at the full potential of the internet as a channel for distribution of traditionally produced content and as a platform for the creation of new forms of media and entertainment content. Our agreement with Limelight Networks anticipates internet audiences and content offerings that are orders of magnitude larger than today, she said.
Tempe, Arizona-based Limelight has been struggling since its IPO earlier this year. Its first-quarter figures announced earlier this month showed a net loss of $10.5m, down from income of $1.7m, on revenue up 43% at $21.2m.
Its stock climbed 8.49% to $9.20 on news of the Microsoft deal, which for all its prestige could involve the software giant cutting a hard bargain with a small company. Akamai used to claim Microsoft as its main customer, and in 2004 said it accounted for more than 10% of its then revenue of $210m. But Limelight won Microsoft’s Xbox business, which gave it a foot in the door.
The two companies said that under what they described as a technology and services agreement, they will cross-license certain technologies, consider joint development projects in the future, and cooperate on extending and improving their respective technology infrastructures.
Microsoft said its internet services serve over 460 million unique users per month worldwide. By working together, Microsoft and Limelight aim to deliver content to any device in any format.
