Several weeks after Verizon acquired digital media firm UpLynk for $75 million, the major wireless network is now setting its eyes on content delivery network (CDN) provider EdgeCast Networks. According to well-placed sources, the company will spend over $350 million to fund the purchase.
Verizon could be aiming to provide additional ways to stream different types of content through its network. With the technology owned by EdgeCast, combined with its own global network backbone, Verizon could logically extend its reach and obtain access to the acquisition’s major CDN clients.
Sources claim that the deal would be announced in a few days. But for now, both companies prefer to remain mum about the reported deal. EdgeCast is also expected to be included in the Digital Media Services of Verizon. Just like UpLynk.
Through the years, Verizon has been trying to offer content delivery services to online companies. Unfortunately, the company has failed to develop its own product and ends up reselling third party providers’ CDN services.
The wireless business of Verizon remains strong and highly profitable. However, it is just logical for the company to aim to activate its enterprise business. Over the coming year, the enterprise division is expected to remain flat, but Verizon could take a new lucrative mix with the addition of EdgeCast.
More about EdgeCast
EdgeCast was born in the middle of the last decade (particularly in 2006). As one of several CDNs of its time, the business was established to compete directly with Limelight and Akamai. It has been among the few network infrastructure firms from that decade to survive and thrive amid a very competitive landscape.
The company has over 6,000 clients. It has raised up to $54 million over the summer from Performance Equity Management. Impressively, EdgeCast has remained profitable for many years now. That could have been one of the factors that made it a very attractive target for Verizon.
Its main profit source is the provision of dashboard management and routing services to global carriers who need to deploy the services of CDNs. Among its popular partners and clients are Telus, Deutsche Telekom, PCCW, and Pacnet. In the previous years, EdgeCast was also linked to AT&T, which sought its services to power its huge CDN push. At this point, it remains unclear how the transaction with Verizon would affect the reseller business of EdgeCast.
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