Level 3 was unable to comment on the deal as it is currently observing an SEC-mandated quiet period. However, reports put the deal's value at $135 million.

Dan Golding, VP of research and analysis firm Tier 1 (tier1research.com) says the top CDN in the market, Akamai, is trading very high now and one of the affects of that is that other CDNs, none of whom are currently publicly traded, have become much more valuable.

"A lot of these smaller CDNs want to monetize now," says Golding, "as seen with VitalStream wanting to sell or SAVVIS wanting to unload what was previously not a profitable product for them and is now somewhat valuable. A lot of companies are seeing that the CDN market is really picking up and getting off. It's very hot right now. There are maybe 20 small CDNs out there that are into various stages of development and a lot of Web hosts and carriers want to pick one of these up and have it as their house brand."

Though analysts believe this is an exciting period for CDNs, with a lot of action waiting to happen, competitors like Mirror Image (mirror-image.com) question what the real impact of all these acquisitions will be and whether newly merged CDNs can really marry their existing and acquired technologies to improve their services and ensure that customers gained through the deals won't slip through the cracks.

"If you look at the CDN space, only two of us are pre-2000, Mirror Image and Akamai. Back in the day there were many competitors in the CDN space and today they've all had to either be acquired or have gone out of business and changed their focus altogether," says Jim Hart, VP of sales and marketing at Mirror Image. "Some of those companies have holes and customers need to pay attention to that. Maybe some of these holes are being filled up with a merge or an acquisition - that's yet to be seen."

Golding says reliability can be seen as an issue, but in terms of longevity and success, the real dividing line between CDNs isn't how long they've been around, but how big they are.

"Mirror Image has been around for a long time, but they've never managed to make hay. They should be acquired soon," he says. "If you're a small CDN that's been around for a while, like VitalStream, and you're not leveraging your assets the utmost, if you're not growing like crazy, you need to be acquired so that someone else can use those assets.

"If I was someone who had been in the CDN market for a while and saw all these new people coming in, I would get a little discombobulated because there's all this competition - big guys at the top, price competitions, especially in the low end. But really, the line in the sand now is between the big and the little and the big right now are Akamai and Limelight. The little is everyone else. New or old, it doesn't matter. However, it's true that some folks are more reliable than others and I think that as time goes by, companies that have been growing really rapidly and who don't have the reliability are going to have to come around quickly and produce quality services."

Golding says he sees the market is likely to see the acquisitions and consolidation continue, even in the immediate future.

"The way to make money as a CDN," he says, "is scale. It's the same with shared Web hosting. You make money by being big and leveraging your assets. That's why we're seeing Limelight become valuable. So what we're going to see is some of these small CDNs break away and become mid-sized CDNs in scale and those guys will become nice targets and there will be consolidations in that space."

Because the content delivery market is quickly expanding, says Golding, there's plenty of room for these smaller CDNs to experience that growth.

"At the end of the day, just as in any other industry, there's not going to be more than five of these guys," he says. "I mean there isn't an industry in the world where there are really more than four or five major competitors. I don't think that Akamai and Limelight can necessarily rest on their laurels because there are always smaller folks who want to come up there and eat their lunch. I don't think we're going to necessarily see any commoditization or standardization in this space for the next two to three years either. It's going to be a real pitched battle."

Having divested itself of the CDN assets, SAVVIS is set to get away from the mini-carrier conglomeration model it had built, says Golding. Now, he says, SAVVIS can stop offering stand-alone services like Internet transit, VPN and CDN, and focus on becoming a managed hosting company that supplements its services with a network that can be used to deliver applications.