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How much is the name Microsoft (MSFT) really worth to LimeLight Networks (LLNW)? Thursday, it was worth an extra 50 cents, or 6.25%, as LimeLight shares jumped to $9.01 as the company announced Thursday morning that Microsoft will use the company’s content distribution network to distribute multimedia “including video, music, games, software, and social media,” to Microsoft’s 460 million unique users in a multi-year agreement.

The thing is, this doesn’t affect Limelight’s finances in any immediate sense, because the deal was already announced a couple weeks ago in LimeLight’s conference call with analysts to discuss its second-quarter results and the outlook for the year.

At the time the company said it was in the first year of a five-year deal with a large customer that represented 14% of the company’s revenue last quarter; Microsoft, it turns out, was that customer.

In fact, LimeLight gave quite explicit forecasts for analysts as to how the money will be accounted for on the books in coming quarters: LimeLight said at the time that because it is cross-licensing technology with Microsoft, the company will be deferring a chunk of revenue in coming years, with one figure for revenue reported on a GAAP basis, and one reported on a non-GAAP basis.

For example, last quarter, the company reported $24.7 million of “non-GAAP” revenue, including the Microsoft payment, and $21.2 million of GAAP revenue. “Of this $3.5 million, $2.6 million will be recognized in the third quarter of 2007,” the company said.”

But none of that really matters; what matters is — this is Microsoft! And you can fairly hear the crackle of acquisition prospects that may be dancing in some people’s heads. Or huge boosts in traffic revenue for LimeLight from, say, Microsoft’s Xbox network. Coming amidst pricing pressure in the content distribution business, and worries that LimeLight would be pushed aside by larger competitor Akamai (AKAM), winning Microsoft’s stamp of approval must feel very good to LimeLight’s fans.

Source: Investors Bid Up LimeLight Shares On The (Old) News Of Microsoft Deal