Rich Miller submits: It's been a while since we've seen conspicuous first-day pops in the share prices of IPOs. Limelight Networks (LLNW) had all the marks of a hot IPO: the pricing was raised from $12 to $14 the day prior to trading, and again to $15 when the shares hit the market. Once LLNW began trading, it shot as high as $24.33 before closing at $22.18, up 48 percent on the session.

Limelight's strong debut came a day after shares of optical networking firm Infinera Corp. (INFN) jumped 52 percent in its NASDAQ trading debut, which prevented LLNW from being the strongest first-day gain of a tech IPO this year. Limelight raised $240 million in its IPO, selling 16 million shares (12.5 million offered by the company, and 3.5 million by shareholders) for $15 each. Limelight, which operates a content delivery network [CDN] for bandwidth-intensive files and applications, will net $170 million of the proceeds. It will use the money to fund capital spending and pay off $23.8 million in debt.

It shouldn't come as any surprise that Limelight's IPO went well, even though the company has yet to turn a profit. The CDN market leader, Akamai Networks (AKAM), has been one of the hot stocks in recent years, gaining 166 percent in 2006. Limelight has Web 2.0 sexiness from a customer list that includes Google's (GOOG) YouTube, Facebook, Metacafe and Brightcove, but also tech stalwarts like Microsoft (MSFT) and Adobe (ADBE). With the growth trends for online video and virtual gaming worlds, it's clear that there's likely to be substantial business going forward in the content delivery market.

There are now five public companies that are players in the content distribution network, including clear leader Akamai Networks and challengers Limelight, Internap (INAP), Level 3 (LVLT) and VeriSign (VRSN). Three of the five have made CDN-related acquisitions this year. Internap bought streaming media specialist VitalStream for $217 million, while Level 3 purchased the former SAVVIS CDN network for $135 million. VeriSign's Kontiki network is a commercial a peer-to-peer (P2P) content delivery system. Akamai has been an active consolidator itself, buying streaming media CDN Nine Systems last November for $160 million, application accelerator Netli for $177 million, and P2P content delivery service RedSwoosh for $15 million.

With investors focusing on Limelight's IPO, Akamai took several steps last week to ensure that it wasn't forgotten. On Thursday the company held a webcast for stock analysts to restate the strength of its platform and field questions about potential challenges to its model. The move seems to have paid dividends. On Friday WR Hambrecht analyst Robert Stimson raised his rating on AKAM from hold to buy, saying Akamai stands to gain from the upcoming Apple (AAPL) iPhone and similar large-screen smartphone deployments. Akamai shares gained $3.37 Friday, or about 8 percent, to $45.60. It's likely that some of that gain was from a "rising tide" effect amid LLNW-driven enthusiasm about the CDN sector.

AKAM 1-yr chart