Verizon Communications (NYSE: VZ) today announced its plans to acquire EdgeCast Networks, the Santa Monica-based content delivery network (CDN). Once completed, the deal will be the largest transaction in the CDN industry in over a decade.
Today a $3 billion industry, the market for CDN services has evolved tremendously since 1999, the year Akamai (NASDAQ: AKAM) went public. Social media, mobile data, and web video were virtually non-existent back then. Today, combined they make up over 80% of Internet traffic, representing a massive shift in the type of content Internet users are consuming today. Whether we realize it or not, we rely on the services of content delivery networks in every aspect of our digital lives. Everything from the tweet that broke the news of Osama Bin Laden’s capture, to the e-commerce sites we use for holiday Christmas shopping, to funny Jimmy Fallon video clip, are brought to us by content delivery networks working invisibly in the background.
Recognizing that new forms of content were reshaping the Internet, the founders of EdgeCast, Alex Kazerani, James Segil, and Phil Goldsmith, set out to build a next-generation content delivery network in 2006. Built on a fully modernized cloud architecture, EdgeCast Networks became the most capital efficient CDN in history – reaching profitability within 3 years and under $15 million in invested capital. Menlo Ventures has been an investor since 2010 and is currently the company’s largest shareholder. Today, leading Internet companies like LinkedIn, Twitter, Hulu and Pinterest rely on EdgeCast Networks to deliver their content to consumers everywhere.
EdgeCast’s acquisition by Verizon Communications underscores the critical role of content delivery in today’s Internet. We wish the EdgeCast Networks team all the best in the next phase of their journey.