Microsoft Signs Deal With Limelight to Improve Xbox Live

Microsoft has entered into a new deal with Limelight Networks in an attempt to improve the reliability of the Xbox Live service.

Limelight will help improve the performance and reliability of Live, offering less congested media streaming and content delivery to Microsoft's online service. The two companies will also cross-license technologies and consider future joint development projects. In reference to his company's earlier arrangement with Microsoft, Limelight Chief Strategy Officer Michael Gordon said, "We've had a three year or so relationship with Microsoft and it really has been a fairly traditional supplier-customer relationship. This builds on that and extends it deeper."

Terms of the deal were not disclosed, but the company's share value jumped as much as 20 percent following the announcement. Gordon said the deal would begin generating revenue for the company in the third quarter. Prior to the announcement, Limelight's share price had fallen about 60 percent since its debut in June, primarily due to increased competition from companies such as Akamai Technologies, which provides similar services to Sony and Nintendo's online communities.