Netflix CDN plans to drive near-term weakness in vendors, says Jefferies

Jefferies notes that Netflix announced it has been actively building its own single-purpose content delivery network, or CDN, with plans to eventually deliver a majority of its traffic through the network. Jefferies believes the move is an attempt to reduce Netflix's reliance on commercial CDNs, which it feels will lead to near-term weakness in shares of vendors including Akamai (AKAM), Limelight Networks (LLNW) and Level 3 (LVLT). The firm expects Limelight to be the focus of the weakness as Netflix accounted for 11% of the company's revenue in 2011.