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May 19, 2011

Cisco News - Cisco Looking To Sell Linksys and WebEx

By Tracey E. Schelmetic, TMCnet Contributor

Cisco (News - Alert) would appear to be unloading its unwanted baggage at a rapid rate. Last month, the company shut down its Flip camera business after revealing that the company wanted to “simplify the way we work and how we focus our attention and resources.”

More simplifying appears to be on the way with Cisco reportedly looking to sell its home networking arm Linksys (News - Alert) and its business video chat and collaboration tool WebEx, according to the British newspaper The Register (News - Alert).

Though the rumors are rife and Cisco hasn't exactly denied, them, a Cisco spokesman told The Register today that the company was not willing to “comment on rumor and speculation.”

Just last week, when discussing the firm's third quarter results, Cisco boss John Chambers (News - Alert) said that the company would be scaling back on products and people. Analysts have lately wondered out loud whether Cisco would offload Linksys among other consumer brands.

Selling Linksys would make some sense, writes SAI Business Insider. As essentially a consumer brand, it falls outside Cisco's five new focus areas, which are mostly focused on the b-to-b market: core routing and switching, collaboration, data center virtualization and cloud, architectures, and video. The WebEx business, though it does fall into Cisco's “core,” may be competing internally with other collaboration products Cisco wishes to focus on, says Business Insider.

Cisco bought Linksys in March 2003 in a $500 million all-stock deal. In 2007, it purchased WebEx for $2.9 billion. Both purchases represented a direct attempt – at that time – to broaden its consumer portfolio, a policy the company appears to be putting into reverse.

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Tracey Schelmetic is a contributing editor for TMCnet. To read more of Tracey's articles, please visit her columnist page.

Edited by Jennifer Russell

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