3.15.07 Cisco buys WebEx

By Richard Koman - March 15, 2007

The purchase price is about $3.2 billion, according to the press release.

WebEx is a market leader in on-demand collaboration applications, and its network-based solution for delivering business-to-business collaboration extends Cisco's vision for Unified Communications, particularly within the Small to Medium Business (SMB) segment.

"As collaboration in the workplace becomes increasingly important, companies are looking for rich communications tools to help them work more effectively and efficiently," said Charles H. Giancarlo, Chief Development Officer at Cisco. "The combination of Cisco and WebEx will deliver compelling solutions accelerating this next wave of business communications.

Cisco believes the network is a platform for all forms of communications and collaboration, and WebEx's technology and services portfolio complement Cisco's leadership in the Unified Communications and collaboration market, while providing Cisco with a new and unique business model to expand its presence in the fast-growing SMB market," Giancarlo continued.

Om Malik says the buy is part of a strategy to compete head to head with Microsoft in SMB services.

For the price of two YouTubes, Cisco just bought a company that had sales of $380 million, and a net income of around $47 million. The move, a smart one, is actually part of a bigger chess game the company is playing against Microsoft.

Microsoft with its communications efforts is increasingly competing with Cisco in the VoIP business. The two companies will continue to butt heads as the worlds of computing and communication collide and become COMMputing.



Share this article

 Subscribe in a reader

By Richard Koman - March 15, 2007 | Permalink | Comment | Category: News Watch
| SVW Toolbar | SVW Newsletter | SVW Mobile

Comments (2)

John Earnhardt:

More flavor on acquisition on Cisco blog by Charlie Giancarlo (Chief Development Officer and President, Linksys) at: http://blogs.cisco.com/news/2007/03/cisco_chief_development_office.html

Posted: March 15, 2007 1:24 PM

Dean Collins:

Lol - yep while Cisco may be buying a trusted 'brand' in Webex it still doesn't make any sense the way it's been explained by a lot of people.

Sounds like the old dot com buybble strategy of "Synergies"

I have a joke theory - The acquisition strategy is being driven by the Treasury Department in Cisco who have so much cash in the bank just sitting there they decided the ROI on the acquisition was higher than the T bills they are currently invested in (and less work to manage as you said it's already a stable and trusted brand).

BTW I have another theory as well but for that you'll need to go to my blog and search on 'Orative' for those of you too lazy to do so wait until Cisco's next announcement about them buying an IM platform and you'll get why they bought Webex.


Cheers,
Dean Collins
www.collins.net.pr/blog

Posted: March 16, 2007 11:46 AM

Post a comment