The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( Trefis) -- Akamai ( AKAM) announced last week that it has completed the acquisition of Cotendo, a smaller Israeli rival which was making some rapid strides in the value-added service arena of the content delivery world. Founded in 2008 and backed by strategic partners such as Citrix, Juniper ( JNPR), Google ( GOOG) and AT&T ( T), Cotendo has made a name for itself with an impressive list of customers that use its dynamic site and application acceleration services, including some big names such as AT&T, Facebook and Zynga ( ZNGA). The move to buy out this rival not only defends the moat that Akamai has created around its CDN business but also gains it access to Cotendo's impressive clientele and strong product offerings. Our
One of Cotendo's value-added offerings that we believe has tremendous potential is its mobile acceleration suite (MAS) launched recently. As smartphones see mass adoption and increasingly replace the PC as the primary computing and networking vehicle, it is becoming highly essential for content providers to be able to speed up delivery of their mobile websites and applications. As Dan Rayburn noted earlier, Cotendo's value-added services are on an average about 30% cheaper than Akamai. But with a decrease in competition after the acquisition, we believe that Akamai may not want to renew Cotendo's existing contracts at those cheaper rates. The acquisition will also help it gain instant access to Cotendo's very impressive list of customers. The company managed to sign about 400 customers in fewer than 20 months since its launch, which is a testimony to its strong customer-centric service offering that could benefit Akamai in the event of a take-over. Click here to find out how a company's products impact its stock price at Trefis Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.