Akamai in talks to buy Cotendo for $300 million - report

JERUSALEM (Reuters) - Akamai Technologies, which helps companies improve website performance, is in talks to buy its smaller Israeli rival Cotendo for more than $300 million (194 million pounds), the Calcalist financial daily reported on Sunday.

Cotendo, whose products accelerate website and mobile sites, has raised $39 million in three funding rounds from venture capital funds Sequoia Capital, Benchmark Capital and Tenaya Capital, Calcalist said.

The company is set to post sales of $20-$30 million in 2011, while a distribution agreement with AT&T is expected to provide Cotendo with another $30 million in revenue in the next four years, the newspaper said.

Akamai is believed to control 90 percent of the content management and streaming market.

Cotendo was unavailable for comment. Calcalist cited Akamai as saying it did not comment on rumours.

Calcalist said Cotendo's customers for its acceleration technology include Facebook, Microsoft and Google, as well as AT&T.

During the past year Cotendo expanded its acceleration technology to mobile applications and intranets and it has become the first to offer web surfing services for cellular devices, Calcalist said.

A year ago, Akamai sued Cotendo for patent infringement. Akamai bought the last two companies it had sued -- Digital Island and Speedera.

(Reporting by Steven Scheer; Editing by David Holmes)