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Akamai Will Acquire Cotendo for $268M

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Content delivery network Akamai announced this morning that it will acquire Cotendo, which is known for its site acceleration and mobile acceleration services.

Akamai will acquire all outstanding Cotendo equity for a $268 million cash payment. The deal should close in the first half of 2012.

Cotendo is based in Sunnyvale, California, with a research and development center in Netanya, Israel. It counts 100 employees between the two locations.

In a statement, Akamai said that combining its own secure platform with Cotendo's suite of web and mobile acceleration services will "increase the pace of innovation" in cloud and mobile optimization.

"As we look to accelerate growth across the dynamic landscapes of cloud and mobile optimization, we are excited to be joining forces with Cotendo," says Paul Sagan, president and CEO of Akamai. "Cotendo's technology, partnerships, and people are a strong complement to Akamai. Together, we believe there is tremendous opportunity for our combined technologies as enterprises embrace the move to the cloud and seek solutions for an increasingly mobile world."

StreamingMedia.com executive vice president and columnist Dan Rayburn argues in a blog post that the deal is good for Akamai, yet bad for the industry:

"While this acquisition is great for Akamai and their business, it's bad for the industry and for customers as a whole. Competition is a good thing because it makes companies innovate faster, helps foster quicker adoption of technology, drives pricing down in the market and with more companies selling the same service, it creates awareness in the market. With Akamai taking out Cotendo, they have locked up the market for app acceleration and mobile acceleration and are the clear leader, in terms of revenue, for DSA [dynamic site acceleration] offerings," writes Rayburn

"With one vendor now controlling the vast majority share of the market, Akamai has no pressure to reduce pricing," he concludes, hoping that Contendo's corporate culture rubs off on Akamai, rather than the reverse. 

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