Internap: Closing the Door on Vitalstream Comes as No Surprise

Oct.31.08 | About: Internap Network (INAP)

It should come as no surprise to anyone that Wednesday, in a 8-K filing with the SEC, Internap (NASDAQ:INAP) announced it would take a write down of "approximately $99.7 million" for the value of the CDN business Internap purchased from VitalStream for $217 million in 2007.

While some have been speculating that the write off should have been closer to $200 million, Internap's CDN business does have some value and has to be assigned some sort of fair evaluation. With Internap reporting earnings next week, I expect we'll hear more on how it decided on the $99.7 million number and how it values its CDN business moving forward.

For Internap, it's been a really rough year for its content delivery business. With the write down now behind them and the uncertainty out of the way, hopefully this now closes the door on the VitalStream acquisition mess and allows Internap to move forward with its CDN offering.

Next year is a clean slate for Internap's CDN business and if I were them, I would treat their CDN business as if it was a new startup in the market and completely re-align and re-brand their content delivery offerings.

Disclosure: None