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Technology Stocks : (LVLT) - Level 3 Communications

LVLT 53.63

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Nov 1 5:00 PM EST

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From: FJB	10/1/2009 8:30:55 AM
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Akamai CDN Pricing Too High, Analyst Says.By Eric Savitz Akamai (AKAM) is losing deals in an attempt to hold the line on content deliver network pricing, according to Merriman Curhan Ford analyst Richard Fetyko, who late yesterday cut his rating on the stock to Sell from Hold. Fetyko asserts that Akamai’s CDN pricing “remains way out of line” - 30%-100% higher - compared to its largest competitors, Limelight (LLNW) and Level 3 (LVLT) . He contends the high prices are resulting in lost deals, including two large e-commerce customers recently. Fetyko writes in a research note that Limelight is picking up market share, “and is expected to make a couple of meaningful announcements” on new customers shortly. “Overall CDN market volume in 2009 is expected to increase by roughly 30% and industry pricing is expected to decline 20%; however, Akamai’s pricing will decline faster due to the large gap that exists relative to Limelight and Level 3,” he writes. “Growth from HD content deployments is unlikely to hit an inflection point in 2010, unless pricing declines further.” On Wednesday, AKAM fell 57 cents, or 2.8%, to $19.68.

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