This Week In Acquisitions: Microsoft And Cisco Systems

By Amit Chowdhry ● Mar 15, 2007

Today, it was announced that Cisco Systems, one of the world’s leading routing device manufacturers has acquired web conferencing company WebEx. The amount that Cisco paid was $3.2 billion, an amount that eclipses some of the more recent acquisitions (i.e. MySpace for $580 million and YouTube for nearly $1.7 billion).

WebEx was founded by Subrah S. Iyer and Min Zhu and is based in Santa Clara, CA. WebEx has several products that include WebEx Meeting Center, WebEx Event Center, and WebEx Training Center. WebEx had acquired in 2005 and had announced to launch a business version of AOL Instant Messenger last year using the conference tools of WebEx.

Currently, WebEx Communications, Inc. has a market cap of $2.82 billion and trades under the NASDAQ: WEBX symbol. GigaOM has some further insight regarding why Cisco would actually buy the company. In summary, Om Malik summarized that this move by Cisco is a way for them to stay competitive with Microsoft’s VOIP efforts.

Yesterday, Microsoft had announced that they had acquired TellMe. TechCrunch had speculated and then later confirmed the rumor and it was made official by a Microsoft press release.

“Speech is universal, simple and holds incredible promise as a key interface for computing,” said CEO of Microsoft, Steve Ballmer. “Tellme brings to Microsoft the talent, technology and proven experience in speech that will enable us to deliver a new wave of products and revolutionize human-computer interaction.” The price is unknown, but Om Malik mentioned that he heard a rumor that it was greater than $800 million and less than $1 billion.

TellMe was founded in 1999 by Mike McCue. McCue is also currently the CEO. According to some Wikipedia researchers, “Early venture-funded competitors included BeVocal, Hey Anita and, which was acquired by America Online to power its competing service AOL By Phone.” Tellme has processed almost 2 billion unique calls. The company is based in Mountain View, CA.