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Cisco's Media Plunge

9:30 AM -- At last, Cisco Systems Inc. (Nasdaq: CSCO) is telling more about its Media Solutions Group.

A Wall Street Journal article this morning describes the vendor's plan to offer its Entertainment Operating System (EOS) -- really an entire platform for running social networks -- on servers that Cisco itself would run. The customer, be it a television network or the National Hockey League, would pay monthly fees.

Going beyond the nuts and bolts of a social network, EOS is apparently tailored to make content recommendations based on subscriber behavior. That's why Dan Scheinman, the senior vice president running the Media Solutions Group, has talked so vigorously about the difficulty in matching content to users. (See Cisco Takes On New Media.)

By hosting EOS servers, Cisco gets to be the hand-holder for enterprises trying to tap Web 2.0 concepts, a plan CEO John Chambers hasn't been shy about sharing. (See Cisco's Kool-Aid.) Cisco also gets to keep control of the software, which is good, considering how malleable the Web 2.0 world is. Cisco can apply changes to all customers at once, without legacy versions floating around.

My first thought was that this might put Cisco in competition with the telcos -- wouldn't AT&T Inc. (NYSE: T) or Verizon Enterprise Solutions want to offer this kind of hosted service? But given that Web 2.0 is still in flux, it still seems the territory of software builders. So, maybe it's more appropriate to talk about Cisco's eventual clash with Microsoft Corp. (Nasdaq: MSFT). (See Cisco (Heart) Microsoft.)

If it all works, though, telcos might see the emergence of the next World of Warcraft: a popular telecom application that's lining somebody else's pockets. Moreover, if EOS starts finding TV programs for its users, then Cisco's customers could steal some thunder from IPTV. (See The IPTV Trap.)

The WSJ story is here, available only to subscribers. (Just read over someone's shoulder; that's old-school social networking.)

— Craig Matsumoto, West Coast Editor, Light Reading

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