Video services

Cisco & ActiveVideo Go Steady

5:45 PM -- Cisco Systems Inc. (Nasdaq: CSCO) and ActiveVideo have been friends (mostly partnering on tech demos) for a while now, but the two appear to have moved to the dating phase of their relationship after confirming that Cisco is licensing some of ActiveVideo's technology to help power Videoscape, Cisco's all-singing, all-dancing multi-screen platform for service providers.

As reported last week by Multichannel News, Cisco has a deal to use ActiveVideo's CloudTV platform to power Voyager Virtual, a new Videoscape component that converts Internet-sourced video, apps and other Web-based services into streams that can be used by old, barnacle-infested legacy set-top boxes that don't do IP. (See Cisco's Videoscape Stresses Cloud Control.)

ActiveVideo is moving on to much more advanced capabilities, but giving legs to QAM-based boxes is the sort of thing it's been focused on since interactive television was stoking cable's campfire of hype in the late 1990s.

The most obvious thing this does is give ActiveVideo a way to latch itself to the Cisco train and get a nice pathway into the Videoscape deployment cycle ... whenever that really gets going. (Cisco said it doesn't have any customers using ActiveVideo's system to announce.)

But it also marks a bit of a different approach for Cisco as it continues to fill Videoscape's technology gaps. Cisco's been plugging those holes through straight M&A -- ExtendMedia Inc., BNI Video Inc. and Inlet Technologies, among some recent examples. (See Cisco Paints Inlet Into Its Videoscape , Cisco Buys Into TV Everywhere (Again) and Cisco to Buy BNI Video for $99M .)

So why not just buy ActiveVideo, too? Pretty please? If anything, it would make me look good since I did put ActiveVideo on my list of companies that would be ripe for the picking in 2012. (See 2011 Top Ten: Cable M&A Targets for 2012 .)

But in all seriousness, there's no tangible evidence that ActiveVideo -- a company that spurned the lusty advances of Microsoft Corp. (Nasdaq: MSFT) more than a decade ago when it had, like, no revenues coming in the door and was known as ICTV Inc. -- even wants to be bought, or has any sort of an exit in mind. After all, it seems to thrive on being the world's first 21-year-old startup. (The folks at ActiveVideo are used to me chiding them about something to the point that I think they'd be disappointed if I didn't do it now.) (See ActiveVideo's Year of Reckoning , ActiveVideo Meets Its Match , It... Lives! and New and Improved?)

ActiveVideo's not commenting about M&A or exit speculation, but did offer a statement confirming it's licensing to Cisco and is (yawn) "delighted" about working with the "world's largest networking infrastructure provider" and "expanding ActiveVideo's value proposition."

But an ActiveVideo/Cisco M&A connection has been suggested before. ActiveVideo does have a powerful patent portfolio and some deployments and Cisco apparently likes the company enough to use its stuff. Cisco's made some missteps in its buying decisions, but the notion of acquiring ActiveVideo seems to make as much sense as the deals that have panned out.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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