According to an order from the U.S. Court of Appeals for the
Akamai Technologies Inc.
) patent litigation case against
Limelight Networks Inc.
) related to content delivery is to be reconsidered, reported
Akamai had accused Limelight of having infringed on a certain
content delivery patent way back in 2008. The Jury ruled in favor
of Akamai and awarded it $45 million. However, the ruling was
overturned by a District Court next year saying that Limelight did
not completely infringe on Akamai's patents.
However, with the revival of this case, Akamai would now have
another chance to protect its patents related to content delivery
against its competitors.
Akamai is a leading provider of content delivery network
services, accounting for approximately 30.0% of all Internet
traffic through its web content delivery and acceleration platform.
Akamai recently acquired Cotendo to strengthen its presence in the
content delivery market. Cotendo specializes in software and
services that improve the delivery of content across the Web and on
We believe that any positive result in the case could give
Akamai a competitive edge over its other competitors like
Level 3 Communications Inc.
Verizon Communications Inc.
) over the long term.
Although Akamai has a strong presence in the content delivery
market, intense competition has forced it to lower the price of its
content delivery network services, particularly the digital media
services, which will hurt its margins. Moreover, increasing total
bandwidth costs remain a headwind for Akamai.
However, we believe that strong demand for cloud infrastructure
solutions, security and mobile products, online video along with
aggressive share repurchase and strategic partnerships are
positives for the stock over the long term. Thus, we maintain our
Neutral recommendation on a long-term basis (6-12 months).
Currently, Akamai has a Zacks #3 Rank, which implies a Hold rating
on a short-term basis.
AKAMAI TECH (AKAM): Free Stock Analysis Report
LIMELIGHT NETWK (LLNW): Free Stock Analysis
LEVEL 3 COMM (LVLT): Free Stock Analysis Report
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VERIZON COMM (VZ): Free Stock Analysis Report
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