Akamai Acquisition Of Cotendo Sends Shares Up 18.6%

Akamai will acquire competitor Cotendo for $268 million according to an announcement on Thursday from both companies. Akamai provides an infrastructure for enterprise grade content delivery over the internet to any web-enabled device. Cotendo specializes in the acceleration of content delivery in the internet and mobile spaces to customers such as Facebook, Zynga, Digg and Answers.com. Because Akamai and Cotendo both work in the field of application and content delivery acceleration, Akamai’s acquisition of Cotendo removes a competitor, gives it access to an expanded customer base and enables a synergistic combination of the technological platforms of both companies. That said, part of the challenge for Akamai will consist of working with former Cotendo customers that had selected Cotendo precisely out of a desire not to work with Akamai. Cotendo competed in the web acceleration space with aggressive pricing and highly competitive technology in the dynamic site acceleration and mobile acceleration verticals. Akamai’s purchase of Cotendo makes it the clear leader in market share in the application acceleration industry alongside competitors such as Level 3 Communications and Limelight Networks. Shares of Akamai Technologies rose 18.6% to $31.63 upon news of the acquisition as investors recognized the power of a consolidated Akamai-Cotendo entity.

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