This acquisition has market and business implications well-beyond web conferencing - WebEx Connect, WebEx WebOffice and the integration with AOL/AIM provides Cisco with a very strong SaaS offering in the collaboration space - especially in the SBM market.
At the same time, the deal makes other things more cloudy - the status of its relationship with Adobe and use of its Flash-based conferencing technology - the future of its existing Latitude MeetingPlace technology and the strategic importance of its emerging relationship with IBM.
Time to pause and reflect... but this is quite a bold move by Cisco. Right now my thinking is:
- The deal puts Cisco aggressively "in-the-face" of Microsoft (taking on Microsoft Office Live Meeting and its emerging Office Live effort)
- The move throws a wrench into the IBM partnership. No wonder the VoiceCon announcement of the IBM alliance during the Cisco keynote was somewhat passive
- With WebEx Connect, some of the other acquisitions (e.g., Five Across) make more sense
Cisco Buying WebEx
By Scott Moritz
3/15/2007 9:53 AM EDT
Cisco (CSCO - Cramer's Take - Stockpickr - Rating) agreed to acquire WebEx (WEBX - Cramer's Take - Stockpickr - Rating) for $3.2 billion in cash.
WebEx shareholders will get $57 a share, a 23% premium to Wednesday's closing price. WebEx shares rose 3% in early trading Thursday before they were halted for the announcement of the deal, which was first reported earlier by TheStreet.com.
The deal gives Cisco video conferencing expertise and will help power the networking giant's effort in so-called telepresence. CEO John Chambers has predicted this virtual conferencing business will be a $1 billion sales opportunity in the next couple years.
Source: Cisco Buying WebEx