Cisco Spends $3.2bn on WebEx

Cisco agrees to give WebEx several suitcases of crisp, clean, stackable Benjamins and suddenly yesterday’s news (figuratively speaking) of Microsoft’s purchase of Tellme for $800,000,000 starts to look insignificant. Not that we’d mind wading in a pool of that kind of green. Just, you know, big news was soon followed with much bigger news. An amusing transition over the course of a few hours. Anyway, on with the story.

WebEx, the productivity suite that we’ve all seen advertised in banners and squares all over the Internet at some point in our Net-based lives, is in line to receive $3.2 billion smackeroos. And, yes, even in Silicon Valley currency that’s quite an investment.

What some may not realize is that WebEx is quite a large company. All those advertisements paid off; the company is said to cater to “64 percent of the online meeting market, with more than 3.5 million people using [its] services every month.” Time will tell whether this buy won’t simply put Cisco back a bit (Even with its acquisitions in the past few years, the company sits comfortably in the black.), but with more and more companies looking to connect internationally (The world is flat after all. If you don’t agree, take it up with T. Friedman.) WebEx will predictably expand its client base greatly, both in the small and large business sectors.

Microsoft, SAP, and similar firms that are focused on consumer and enterprise solutions are moving applications into the online space, but with WebEx dominating the field as it is, gaining experience (a.k.a., perfecting the business), and becoming more successful in connecting people with a variety of solutions available now, the company shouldn’t expect to see its grip on the market slip in any significant way anytime soon. If anything, it’ll grow.

If you’re reading this and still wondering what WebEx is, you’re not alone. For a while I had no clue. Saw those ads and thought nothing of ‘em. Now that they’re a publicly traded company (listed on the Nasdaq) with a share value of roughly $46 (the $3.2bn sale price translates to a $57 per share valuation) I figured it might be a good time to look into it.

WebEx simply does online conference. Well. Very well. With the software available users can: arrange meetings; manage sales teams; operate customer support services; send and receive secure instant messages (Consider this a freebie. Lots of products offer this.); host web-based marketing events; train students, etc; share documents, calendars, databases; and more. The “more” is little customizable things, but if a company needs them, they’re there.

If you’re curious to know why Cisco in particular wants to take WebEx under its wing, it’s simple. Cisco is into the telecom business. They provide a lot of the backbone stuff that make communications work both inside corporations, and outside. Because WebEx can already stand on its own two feet in the corporate world, it appears to be more adaptable to Cisco’s business than the WebEx clones and alternatives currently out there.