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Cisco at It Again: Acquires WebEx

Just a week and a half after announcing its Tribe.net acquisition, Cisco Systems announced that it will acquire WebEx. WebEx is a B2B online meeting software. Cisco envisions this move to enhance their Unified Communications, “particularly within the Small to Medium Business (SMB) segment.” Cisco will pay $3.2 billion for the company/shares.

Unlike the Tribe.net acquition, which it derided as a “wrong bet,” GigaOM’s Om Malik calls this move “a smart one, . . . part of a bigger chess game the company is playing against Microsoft.”

Om notes that the price tag is twice that of YouTube, but WebEx is a profitable company. Last year WebEx had a net income of $47 million, after $380 million in sales.

Michael Arrington takes a dimmer view, noting WebEx’s software shortcomings.

I’m inclined to agree more with GigaOM, but I haven’t had the same problems with WebEx that TechCrunch describes. (I sign up for WebEx events and forget to “go.”)

Were FiveAcross and Tribe.net an aberration or is there some larger plan that we’re just not seeing yet? I can only loosely related the recent acquisitions: Cisco wants to help SMBs build social networks/online communities/video capabilities/user-generated content into their sites and also provide web meetings? Should I stop trying?

What do you think: will this pay off for Cisco?

  • http://www.u-g-h.com Owen

    Sounds like a good mood. I’ve used WebEx before and was quite impressed with the functionality. And buying a profitable company can’t be all that bad right?

  • http://www.wpromote.com/blog/ Mike Mothner

    I must say that when compared to Ebay’s hefty purchase of Skype and the pricetag on Google’s YouTube purchase (especially in light of this week’s billion dollar Viacom lawsuit), Cisco’s purchase of the profitable WebEx strikes me as a considerably better price and more synergistic purchase than the others.

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