Cisco plus WebEx: smart or desperate?

Coming so soon after the company bought a social networking platform (, Cisco’s $3.2-billion acquisition of WebEx makes it clear that the network equipment company’s interest in matters of the Web is more than just a passing fancy (although I suppose that it’s possible deals of that size qualify as a fancy at a giant like Cisco, which has a market cap of about $155-billion).

In any case, WebEx is an interesting purchase to make. I think Om is right that the service makes a natural pawn (or maybe a rook) in the chess game with Microsoft for supremacy in the in-between world of Web and desktop for corporate users. And from that point of view the deal makes a certain amount of sense as a positioning effort.

However, I also think Rafe Needleman makes an excellent point in his post at Webware, which has the wonderful title: “Cisco buys WebEx for the land — the product is a teardown.” Having used the service more than once, I can attest to the fact that in most cases it is difficult to configure and a pain in the ass to use, in contrast to more flexible (and cheaper) Web services such as and Adobe’s Connect.

In that sense, the deal doesn’t look quite so great — and the valuation looks rich at best. Paul Kedrosky asks whether Cisco even knows what it wants to be when it grows up.

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About mathewi

I'm the chief digital writer at the Columbia Journalism Review in New York, and a former writer for Fortune magazine and the Globe and Mail newspaper.

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