Verizon Is Acquiring Content Delivery Network EdgeCast For More Than $350 Million
Verizon is looking to get deeper into the content delivery business with the acquisition of Los Angeles-based CDN provider EdgeCast Networks, TechCrunch has heard. Owning EdgeCast, and combining …
Context & Ripple Effects
The EdgeCast report lands mid-spend for Verizon: two days earlier the carrier completed its $130B buyout of Vodafone's stake in Verizon Wireless to take full control, and in 2011 it bought CloudShift-style software capability when it bought CloudSwitch. TechCrunch's sourcing puts EdgeCast at more than $350 million — a rumored deal, not yet confirmed by either company.
What makes a CDN purchase coherent for Verizon right now is what the carrier has already built and confirmed on the record this year: tripled 4G capacity in major cities like New York under rapid nationwide LTE upgrades, and the expansion of FiOS Mobile TV to Android and iPhone users watching live television away from home. Owning delivery infrastructure would let that growing video traffic run over assets it controls end-to-end.
First-order effects
- EdgeCast stops being an independent CDN: its Los Angeles operation, customer roster, and distributed edge footprint fold into Verizon, which buys an installed content-delivery business instead of building one.
- If the reported price holds, Verizon pays a premium over infrastructure cost for relationships — the value sits in EdgeCast's existing delivery contracts rather than hardware.
Second-order effects
- Rival carriers and standalone CDN providers now face a vertically integrated competitor able to bundle delivery with LTE and FiOS access, putting pressure on pure-play CDN pricing.
- Verizon's own confirmed video push — FiOS content streaming outside the home over cellular — gives it an internal buyer for EdgeCast capacity, letting it internalize traffic it would otherwise peer or pay to carry.
Third-order effects
- If the pattern holds — CloudSwitch in 2011, EdgeCast in 2013 — carriers consolidate the internet's application and delivery layers through acquisition rather than organic development, making network owners gatekeepers of both transport and distribution.
- Content delivery shifts from a merchant market toward a feature of carrier bundles, raising the structural question regulators will eventually face about whether delivery neutrality survives vertical ownership.
The trend: Telecom carriers are using acquisitions to climb the stack from pipes into content delivery and cloud software, turning network ownership into a platform position.