Internap Network Services Corporation (INAP)

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Akamai Targeting Corporate Market to Counter Competition...

Friday October 13, 4:54 am ET

Bambi Francisco (MarketWatch) submits: Video is booming, so shouldn't that mean happy days for content delivery networks -- especially Akamai (NASDAQ: AKAM), the leader in this space, and Limelight, Akamai's fast-growing rival? Well, sort of.

Since Google (NASDAQ: GOOG) bought up YouTube, Limelight appears to have lost its biggest customer. Limelight delivers the videos for YouTube. Google delivers its own videos, so the search giant certainly doesn't need to pay Limelight to do it.

Even though YouTube must be giving Limelight headaches today, it certainly helped Limelight make a name for itself against Akamai, the leader in delivering video content. (Neither YouTube nor Limelight was available to comment on this.)

Since Limelight's entry into the video-delivery market, Akamai has had to deal with this aggressive competitor. That's why Akamai -- known for delivering videos for the biggest media sites, as well News Corp.'s (NYSE: NWS) MySpace videos -- is looking to move aggressively into the delivery of corporate Web applications. It's been doing this for about a year, according to Akamai's CTO. But it's only recently that the company is making a concerted effort to tap the corporate market.

As it happens, I just spoke with the CEO of Netli, another fast-growing, small company that's focusing on delivering content for the corporate market. It seems Akamai has a number of competitors in both video delivery and corporate content delivery nipping at its heels.

On another note:
One reader asked: "A lot of companies are talking about the revenue opportunities associated with video streaming but have we reached the point where the revenue offsets the cost of streaming? Interesting that google just bought a company for a boatload of cash that has the characteristics of both geocities and broadcast.com."

My answer: I heard that YouTube was receiving a price of $9 per megabit from Level3. But I can't confirm that. Here's the response from Netli CEO Gary Messiana. Apparently, companies that are pushing 5 gigabits a day can get bandwidth prices as low as $20 per megabit. Other companies pushing less video content may pay as much as $1,600 per megabit. One company that is doing 1.5 gigabits a day received a price of $30 per megabit. Two years ago, the same company paid $78 per megabit.