Updated: Quietly, CD Networks and Panther Express, two also-ran content delivery networks, have merged their businesses. The terms of the deal were not announced, which can also be also be interpreted as a fire sale by one of the parties. Update: A source familiar with one of the parties told me that it was indeed a fire sale and Panther was sold for less than the money put into the company, essentially wiping out the common shareholders.
Panther Express, on the other hand, has been known for its aggressive pricing in the U.S. It has been growing fast but it is still far behind leader Akamai. Panther’s founders included alumni of DoubleClick, and the company raised over $23 million in funding from Greylock, Index Ventures and others. CD Networks is a Korean CDN provider well known for providing content delivery services to the gaming industry.
The merger once again brings into focus that the CDN business has become highly commoditized, thanks to the presence of too many players with very little value added services. The guys at Akamai realize that and have been building new value-added features such as software controls that allow dynamic site acceleration to stand out from the me-too CDNs. The current credit crisis has stopped the flow into CDN startups that were trying to cash in on the growth of online video, and one should expect more consolidation.