Big news, CenturyLink has acquired Level 3. The move caught many off guard, and overall, it’s a good one. Now that Jeff Storey is out of the picture, Glen Post should siphon off Level’s 3 CDN business and merge it with Limelight Networks. There is zero upside potential for the Level 3 CDN business unit in the future, post acquisition.
As it stands today, competitors are beating up Level 3, with customers like Vimeo fleeing to Next-Gen Pure-plays who offer more features. However, CenturyLink doesn’t have to give up complete ownership of the new combined entity, they’ll just let the pros at LLNW run the business (who are much better at it anyways). Thereafter, CenturyLink and Level 3 can repackage the 3rd party CDN service and sell it to their customer base.
It’s interesting to see Qwest and Level 3 finally become one company after all these years. There are going to be winners and losers post acquisition. It’s bad news for employees because there will be layoffs. And it’s bad news for customers and telecom agents, since there will be fewer choices in the marketplace. Wall Street is the big winner, since M&A is the lifeblood of Wall Street.
Two very important things CenturyLink must avoid: 1) Do not get rid of the Level 3 name because CenturyLink has zero brand recognition internationally, while Level 3 has a ton 2) Do not move Level 3 executives from Broomfield, CO to Monroe, LA or else there will be a mass exodus. Moving to Monroe is a really hard pill to swallow.