Yahoo! News reports that content delivery network provider Limelight Networks, Inc., has sold its rich media advertising unit EyeWonder to DG Fastchannel Inc., the network operator that links advertisers with radio and television stations, for about $66 million in cash. As a result, its shares went up 8 percent in pre-market trading.
As per the report, the company now expects third-quarter revenue of $46.1-$47.3 million, which includes revenue from EyeWonder through August 31. Earlier the company predicted revenues of $51.7-$53.2 million. According to Thomson Reuters, on average, analysts were expecting revenue of $52.4 million, wrote Yahoo! News.
According to Yahoo! News, Limelight’s second quarter results were lower than expected because the company’s digital media revenues declined as its EyeWonder advertisement platform saw less campaign traffic. It was hurt due to delay in the launching of a new platform to secure more rich media campaign revenue from advertisers, wrote Yahoo! News.
The Yahoo! News report indicates that Limelight bought EyeWonder in 2009 to help its customers create interactive digital ad campaigns. Shares of the Tempe, Arizona-based company rose 20 cents in trading before the bell. It closed at $2.68 on Nasdaq on Monday.
In June, based on sources close to DG, Bloomberg reported that DG FastChannel was weighing a sale and working with Goldman Sachs Group Inc. (GS) to find buyers. The Irving, Texas-based company, which has a market value of about $755 million, may seek $1 billion, or about 10 times earnings before interest, taxes, depreciation and amortization. The company has started soliciting bids and most of the potential buyers are private-equity firms, reported Bloomberg.
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Edited by Rich Steeves