Troubles Cast Shadow on Limelight's IPO

The tricky thing about the limelight is that it can be a little blinding at first. Once your eyes adjust, you start to see things that appear a little darker.

So, too, with Nasdaq newbie Limelight Networks (LLNW Quote), which made one of the strongest debuts in the public markets so far this year.

What's the big deal? Limelight is in one of those rare but coveted markets in which demand is so hot that you can barely keep up with it. In Limelight's case, the market is network delivery of broadband content, which is, of course, exploding because people are sharing music files, watching baseball games and downloading videos of Paris Hilton being hauled back to jail on Google's (GOOG Quote) YouTube or News Corp.'s (NWS Quote) MySpace.

It's not just more applications -- it's bigger ones. Internet traffic is growing at 75% a year, about three times as fast as online advertising. Until now, the industry has been dominated by Akamai Tech (AKAM Quote), which even now has about six times as much revenue as Limelight and includes other big players such as Level 3 (LVLT Quote) and Internap (INAP Quote).

But Limelight is growing even faster than Akamai, with revenue more than tripling last year and growing 111% in the first quarter of this year. To catch up further, the company held out its hat to the public market this month, and Wall Street responded by pouring in the cash.