Limelight Networks to Buy EyeWonder, Rich Media Pioneer

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Content delivery firm Limelight Networks will acquire rich media ad pioneer EyeWonder, the companies said this morning. The sale price is $110 million, with the deal expected to close in the first half of next year.

For Tempe, AZ-based Limelight, whose platform is aimed at publishers, the acquisition marks the first time the company will serve the advertiser ecosystem on a large scale. Atlanta-based EyeWonder has existing relationships with dozens of marketers and agencies.

As important as EyeWonder's client relationships is the company's robust platform, which processes and tracks billions of ads a month.

"This is a business where relationships matter and technology scale matters," said Paul Alfieri, VP of marketing and communications at Limelight.

EyeWonder was among the first providers of video advertising solutions on the Internet, enabling rich media and video banners as early as 1999. In the mid-'00s it struggled as agencies and consumers embraced Flash-based video; EyeWonder -- dependent on Sun's Java language -- lost share to rivals like DoubleClick and PointRoll. In 2005 EyeWonder ditched Java and switched to Flash, considerably later than its main competitors.

The acquisition will be Limelight's second purchase of a digital ad company in the last year. In May it bought Kiptronic, a mobile ad provider serving media companies.

Indeed, mobile is a second major focus for Limelight. Earlier this year the company supported mobile content delivery for CBS's coverage of the NCAA men's college basketball tournament. The majority of its business today involves content delivery to Web browsers.

"If you look at the growth areas in the online ecosystem, rich media advertising is right up there, and mobile is the other one," said Alfieri. "We're now well positioned in both of those things as those markets grow."

Limelight intends to keep the EyeWonder brand, Alfieri said. He added Limelight has no plans to sell online or mobile ads, as might be expected of a company positioned between ad sellers and buyers. "We're both platform companies," he said. "We build scalable open architectures to allow our customers to reap the benefits."

Madison Alley Global Ventures advised EyeWonder in the transaction.