CDN Price Wars Dim Limelight

I have often alluded to the brutal price wars that are raging in the content delivery network business, driven largely by the entry of newer players including Level 3 (LVLT) and a gaggle of startups that are hell-bent on taking market share from incumbents such as Akamai (AKAM).

Limelight Networks (LLNW), another big player in the market, is beginning to feel the brunt of the price wars. The company posted better-than-expected third-quarter results today, but it went on to give a revenue forecast that caused chills to run down the spine of Wall Street. I don’t think this is the end of the gloomy forecasts; we are going to see the ultra-competitive nature of the CDN business take its toll.