Cisco Systems Acquires Online Conferencing Giant, WebEx

Dennis Faas's picture

Cisco Systems has purchased the online meeting and web conferencing company, WebEx, for approximately US $3.2 billion. The acquisition exemplifies Cisco's desire to move beyond their familiar networking technology and into the world of business communications.

Cisco is perhaps best known for manufacturing routers and switches that direct data over computer networks. The company agreed to purchase WebEx for $57/share; approximately 23 percent over WebEx's closing price of $46.20/share on the purchase date. (Source:

WebEx produces applications that enable online conferences and instant messaging. According to several spokespeople for the company, WebEx currently commands 64 percent of the online meeting market. It's estimated that over 3.5 million people use their services every month.

Cisco recently made a number of acquisitions, extending their influences in the fields of communications, social networking and many other areas that assist in moving traffic on the Internet. Cisco hopes to become an impact player in many of their extended ventures while increasing the demand for their usual equipment.

In February 2006, Cisco acquired Scientific-Atlanta for approximately US $7.1 billion. Scientific-Atlanta is the number two seller of cable television boxes, right after the popular Motorola brand. The takeover of Scientific-Atlanta was strategically planned to give Cisco the ability to deliver content directly into the homes of their consumers. (Source:

Cisco also expressed interest in the field of technological security. In late January, the company revealed that they had been holding private talks with IronPort Systems, makers of antivirus and antispam security products.

It's believed that Cisco would be spending approximately US $830 million in cash and stock to acquire IronPort. (Source:

Cisco acknowledges that the acquisition of WebEx will allow their company to infiltrate the lucrative market of Internet business communications.

With US $3.2 billion (23 percent extra revenue per share), WebEx is believed to be equally ecstatic about the takeover.

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