Limelight Networks, a company that manages and delivers different kinds of content on the web, diversified its offerings today with the $110 million acquisition of EyeWonder, an advertising agency that specializes in interactive ads.
In addition to giving Limelight access to its rich media applications, the deal will lump together the two companies' 2,500 business partners and 800 interactive agencies, according to paidContent. It's also indicative of a trend toward content management companies fusing with rich media channels. Alcatel-Lucent joined forces with digital content network Velocix this year, and French content management company Ipercast absorbed mobile video service 3G Factory.
It's surprising that EyeWonder sold for so little, considering that it's close in size and influence to DoubleClick, for which Google shelled out $3.1 billion. It seems like a good deal for Limelight, which could up its revenue from $150 million to more than $200 million with the buy. EyeWonder brings in about $35 to $40 million every year.
Also good news for Limelight is how low maintenance EyeWonder will be. With low overhead and no elaborate business model in place, the content delivery network should be able to apply the company's technology where it will best add value to its service portfolio.
Some analysts are saying the buy was motivated by Limelight's need to better compete with web application manager Akamai. This could be true, generally speaking, because Akamai lacks the tools it needs to run rich media ads within games. But EyeWonder won't give Limelight an edge over Akamai's behavioral targeting ad product.
Limelight says it will pay $62 million in cash upfront for EyeWonder, as well as 12.74 million common shares. The acquisition is expected to close in the first half of next year. This isn't the first such deal this year for Limelight, which bought ad insertion firm Kiptronic for $12 million in May.