FT : Cisco Buys WebEx, Microsoft Buys Tellme

Friday, March 16, 2007

THE DEAL

  • Cisco Systems accelerated its push into new applications and services on Thursday as it announced an agreed $3.2bn all-cash deal to buy video conferencing company WebEx Communications.
  • While the strategic logic of the WebEx deal was generally welcomed on Wall Street, some analysts questioned the high price that Cisco had agreed to pay.  Founded in 1995, WebEx had net income of $49m on revenues of $380m last year. 
  • As one of the biggest companies in web-based conferencing and secure instant messaging, Cisco said, WebEx would help it develop communications and collaboration services for small and medium-sized businesses and, eventually, large corporations.

THE COMPETITIVE LANDSCAPE

  • The deal is the latest sign of a strategic diversification from the company’s core networking infrastructure business and will put it on a collision course with Microsoft and other big technology companies.  Cisco has been investing heavily in non-core businesses as it attempts to capture more of the value of the information that flows through its switches and routers and into businesses and the home.  In October, it launched a new high-end video conferencing system called Telepresence, which is designed to allow companies to hold life-like meetings over a high-speed voice and video network.
  • Microsoft followed with an acquisition earlier this week of voice technology company Tellme for a reported $800m, one of its biggest purchases of recent years, and plans to start testing internet voice calling for users of its Office software this month.

Reference : http://www.ft.com/cms/s/661192cc-d314-11db-829f-000b5df10621.html

One Response to “FT : Cisco Buys WebEx, Microsoft Buys Tellme”


  1. Yeah, Cisco WebEx is decent and is definitely easy to use but pricey. Alternatively, I have discovered RHUB’s solution for web conferencing, remote access and support. It gives everything you need in one setup. Plus, it’s only a one-time cost.


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