Yesterday Akamai picked up CDN Competitor Cotendo, a company with a suite of services which accelerate every bit of the CDN food chain starting from the DNS to small and large objects. The acquisition was valued at 9 times 2011 revenue of $30M or $268M. The company has three areas of focus from ad networks to enterprise and ecommerce. Check out the most recent video interview I conducted with Misha Kuperman the VP of Operations at Cotendo on July 15, 2010 where Misha explained to me how strong business was not only in the US but internationally.
On August 2nd, 2011 TMC’s Erik Linask interviewed Cotendo’s Shlomi Gian and the focus of the interview was mobile performance. Shlomi explained how the mobile experience needs to improve and even with faster networks the problem won’t go away. He equates the situation to the way the PC market has evolved meaning as computers got more horsepower the demand always exceeded supply and subsequently on mobile networks he says latency will always be an issue.
Taken together you get some good insight into why Akamai was looking to expand by dong this acquisition. Cotendo is a new company with a tremendous amount of buzz and momentum and it makes sense to take them out early before it becomes too big of a threat and the price tag gets too high.