Cisco to Acquire WebEx for $3.2 Billion

Technology giant Cisco wants to carve out a place for itself in the business-to-business communication and collaboration market, announcing an agreement to acquire market leader WebEx for some $3.2 billion in cash.

“As collaboration in the workplace becomes increasingly important, companies are looking for rich communications tools to help them work more effectively and efficiently,” said Charles H. Giancarlo, Cisco’s Chief Development Officer, in a statement. “The combination of Cisco and WebEx will deliver compelling solutions accelerating this next wave of business communications.

WebEx’s services enable businesses to conduct asynchronous and real-time “data conferences” over the Internet, as well as share Web-based documents, workspaces, and files in order to improve productivity of workers within geographically disparate elements of a business, as well as between organizations. Cisco wants to extend WebEx’s technology into services which more directly apply to the small-to-medium business (SMB) market. The acquisition is just the latest in a series of buys from the San Jose-based networking giant, which has being acquiring businesses focused on social networking and communications…off of which generate heaps of traffic which flow over Cisco’s core networking technologies.

Cisco says the WebEx acquisition has been approved by its board of directors and should close during the fourth quarter of 2007; the company does not expect the $3.2 billion transaction, which would be massive for most companies, to have any material impact on its fiscal 2008 earnings after one-time charges.