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Limelight Networks (LLNW) shares, which plunged Thursday on disappointing guidance, in particular projecting far lower EBITDA for this year than the Street had expected, extended its slide Friday, as Goldman Sachs analyst Sarah Friar downgraded the stock to Neutral from Buy.

Friar writes that her upgrade of the stock two weeks ago was “a mistake” (and not a small one; the stock has since lost about half of its value). She says that “management credibility is shaken,” and adds that pricing and seasonality dynamics in the content delivery network market suggest “a maturity level in the CDN market that was not evident a quarter ago.”

“Limelight’s stumble highlights that management is still getting their arms around being a public company, and has yet to put in place a lot of the infrastructure to support execution on targets,” she writes. “Secondly, there also appears to be a shifting dynamic in the CDN industry,” with “tougher pricing.”

She says that to turn bullish she would want to see “more evidence that management has put in place the right internal infrastructure, and more time to evaluate the path that pricing is taking in the industry.”

Friar cut her 2007 EPS estimate to a loss of 6 cents from a loss of 4 cents; for next year she goes to a loss of 6 cents from a profit of 16 cents; for ‘09 she now sees EPS of 8 cents, down from 36 cents. Her price target drops to $12 from $22.

The stock is now down 47% since coming public June 7 at $15 a share.

Source: Goldman Pulls Limelight’s Buy Rating