CDNetworks aims to outdo Limelight in Web delivery

SAN FRANCISCO, July 10 (Reuters) - CDNetworks Co. Ltd. 073710.KQ has expanded into the United States from its core markets in North Asia and aims to overtake rival Limelight as the world's No. 2 supplier of so-called content delivery networks used to speed up Web services.

“The U.S. is a big focus for us,” Steve Chung, vice president of business development at South Korea’s CDNetworks, told a news conference in San Francisco on Tuesday. “With growth in China and Japan, all in total, we think we are well positioned to take the No. 2 spot.”

Chung said it may take 12 to 18 months to reach the goal.

Limelight Networks Inc. LLNW.O, which raised $205 million in a mid-June initial public offering on Nasdaq, last week said it entered the Japanese market, taking on CDNetworks in one of the major markets that the latter company considers home turf.

CDNetworks went public on South Korea’s KOSDAQ in 2005.

Market research group Frost & Sullivan ranks Limelight as the world’s No. 2 player, with a 9 percent share of the content delivery market. CDNetworks, which is active in South Korea, Japan and China, has 8 percent of the worldwide market.

The leader is Akamai Technologies Inc. AKAM.O with a roughly 60 percent share, But it faces competition from a wide variety of rivals seeking to upset the market with new technology approaches.

Akamai also helps speed up software delivery between corporate branch offices, an area where CDNetworks is not active.

But its focus on the world’s most advanced broadband mobile phone and Internet markets has given CDNetworks expertise in handling data-intensive traffic such as online video games and video-streaming services. By contrast, U.S. Web market pioneer Akamai is strong in accelerating delivery of traditional Web page content -- text and graphics -- rather than richer media.

“Korea and Japan -- that is our playground. These are laboratories for the future of digital media,” Chung said in an interview following the news conference. “We have an early look at how the world of content delivery may evolve.”

Chung said CDNetworks was targeting U.S. customers among Internet service providers, backbone carriers and more-focused Internet service resellers. The U.S. unit was set up in October and has eight employees and expects to increase to 25 over the next year or so. Globally, CDNetworks now employs 150.

CDNetworks already has 30 existing customers in the United States, he said. Among its U.S. customers are Codemasters, a game distributor, and Marshall Media, which delivers streaming video programs including live sports shows.

The company operates nine centralized content storage and acceleration points in the U.S. market and plans to expand to 30 sites over the next 12 to 18 months, Chung said.