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Could Cisco Flip for Skype?

Craig Matsumoto

3:25 PM -- There's a rumor today, via TechCrunch, that Cisco Systems Inc. (Nasdaq: CSCO) wants to acquire Skype. It's a situation like Cerent's, in that it would cost Cisco billions to convince its target not to go public.

(For the kids: Cerent was an optical equipment company back when "optical" meant "instant IPO.")

So, do you believe in Cisco/Skype? Skype would certainly fit Cisco's growing consumer presence. It bought Flip and it's building the Cius business tablet. WebEx and telepresence will be added to both. And Skype could now turn the devices into phones.

Skype is even making a move on replacing corporate phone systems, with today's official launch of Skype Connect. That might catch Cisco's eye, too.

I don't know if buying Skype would be smart, but it would certainly be in character. As long as Cisco is going into these (ugh) adjacencies, a VoIP component seems like something good to pack along.

As for whether service providers would like the idea of Cisco competing with voice service... Hey! Look over there! (Sound of footsteps receding.)

— Craig Matsumoto, West Coast Editor, Light Reading

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12/5/2012 | 4:25:12 PM
re: Could Cisco Flip for Skype?

The WebEx - Skype combo would be a nice bundle of services to offer via IP phones and home networking equipment. And with its WebEx experience and its own gear, I bet Cisco can lower the cost of running Skype's network over time.

More points: Skype uses and promotes IP. It doesn't own or create content. It's a hosted service that doesn't require truck rolls to install. It's international in scope. It works on any broadband network.

Makes sense all the way around.



Gabriel Brown
Gabriel Brown
12/5/2012 | 4:25:10 PM
re: Could Cisco Flip for Skype?

Not a deal I saw coming. But I suppose Skype does generate boat loads of video. Hooked up to high-def cameras and fast connections both ends, it's impressive.

12/5/2012 | 4:25:09 PM
re: Could Cisco Flip for Skype?

I've used Skype quite a bit. Worth every penny (free). It constantly locks up and drops out. On the mac, it has one of the worst UIs that I've ever seen. Very useful for free, but I'd never depend on it in a business context.

I just got a 2-week WebEx free trial. Over the *same* links, the same network conditions, WebEx performs 1000x better. Cisco would be much better served developing a consumer version of WebEx. And the UI doesn't suck.

Cisco already has such a technology edge here - they could take Skype's 'business' away with the right offering. No need to buy the company.


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