After a weekend of rumors, Verizon announced Monday morning that it plans to acquire Edgecast, one of the few outwardly profitable content delivery networks. While no price was given, TechCrunch estimates that the acquisition could cost Verizon more than $350 million.
The acquisition is expected to be final early next year.
Edgecast is slated to join previously acquired Uplynk in boosting Verizon’s ability to offer “quality high-performance digital experiences” to customers. The company, founded in 2006, has developed a specialty in delivering high-quality video content, so it’s no surprise that Verizon snapped it up. In fact, the company alludes to its own future proprietary CDN in the press release:
“The combination of EdgeCast and Verizon Digital Media Services will allow us to fully exploit and accelerate growth in Internet media consumption and online business performance,” said Bob Toohey, president of Verizon Digital Media Services. “EdgeCast’s industry-leading technology and strategically placed assets, combined with Verizon Digital Media Services’ video solutions, improves our ability to deliver the rich, reliable and quality digital media services that our customers have come to expect.”
For what it’s worth, Edgecast has made most its money off of lucrative telecom partnerships. Despite providing CDN services for clients like Pinterest and Hulu, Edgecast emerged in the space thanks to its well-timed partnerships with Deutsche Telekom and AT&T to bring video to mobile subscribers. Verizon and Edgecast have also worked together in the past, most notably with Verizon’s Enterprise Solutions line, but the telco has largely looked to Akamai, the leader in CDN, to execute content delivery. It’s unclear at this point how this acquisition will ultimately affect Verizon’s continued business with Akamai.
The telco is clearly interested in directly marshaling the media that flows throughout its network, and it’s much more possible with this acquisition. This desire for control is the source of the ongoing clash between Verizon and the FCC over net neutrality, and it’s the edge of a slippery slope that could give Verizon the ability to express favorability towards certain sources while tamping down others. Whether Verizon will legally be able to do these things is still in the air, but it will certainly have the practical capabilities very soon.