Akamai Acquires Verivue in Content Delivery Consolidation

11/13/12Follow @gthuang

One down, many to go. Verivue, one of the Boston area’s biggest venture-backed technology bets, is being bought by Akamai (NASDAQ: AKAM), a locally based Internet icon. Terms of the cash deal were not given, but it is expected to close by the end of the year.

Verivue, based in Westford, MA, has been around since 2006 and has raised about $85 million from Accel Partners, North Bridge Venture Partners, Matrix Partners, Spark Capital, Sigma Partners, and Comcast Ventures.

The company makes technology that helps telecoms, cable companies, and other network operators deliver digital content to customers—in particular, video content. Its partners include Nokia Siemens Networks, Ericsson, and Arris. Verivue is known for its content delivery network (CDN) hardware, which handles large amounts of Internet multimedia data on its way to consumers’ end devices.

Internet hardware can be a tough business, but it looks like Verivue has shifted more of its offerings to the software side in recent years. The acquisition makes sense for Cambridge, MA-based Akamai, which is trying to become a one-stop shop for helping big companies deliver content and applications to all manner of devices, via the Internet cloud. Akamai has made some notable acquisitions this year, including FastSoft (in network optimization) and Blaze Software (in Web performance optimization).

Verivue has about 60 employees, led by CEO James Dolce. It’s not immediately clear how many of Verivue’s staff will stay on with Akamai, or whether the deal is much of a win for Verivue’s many venture investors. But if Verivue’s technology and talent help Akamai compete better in multimedia content delivery, the deal should be considered a positive one for the Boston tech scene.

Mick Scully, Akamai’s vice president and general manager of carrier products, said in a statement, “We believe joining forces with Verivue will allow us to help operators maximize content revenues and network efficiencies as the flood of media and video traffic increases.”

For his part, Verivue’s Dolce added, “This is an exciting step for our two companies. Operators are looking for services to drive revenue, such as advanced cloud capabilities or by providing licensed content to users on a variety of IP-connected devices. By combining our teams, we believe we can help meet this immediate market opportunity.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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