Cisco buys Tandberg for $3 billion

Cisco on Wednesday night announced a $3 billion acquisition of Tandberg, a Norwegian company that makes equipment for video communications.  As of Q2 this year, Tandberg commands 40 percent of the global videoconferencing market while competitor Polycom has 34 percent of the market.

Cisco makes videoconferencing equipment as well, though it focuses on the high end portion of the market. Tandberg makes similar products, but is far more diversified. For example, it sells smaller, cheaper conferencing hardware and is also known for its specialized software for managing videoconferencing systems. Certainly, the acquisition will significantly strengthen Cisco's position as the leading video conferencing equipment provider.

Ned Hooper, a senior vice president at Cisco, summarizes the reason for the acquisition: "It really enables us to build out our portfolio." Videoconferencing belonged to a segment that is relatively unscathed by the current downturn; companies looking to cut down on travel perks and air travel are turning to such products.

With $35 billion in cash on its books, more acquisitions are set to follow. In fact, Cisco's chief executive, John T. Chambers was quoted as saying, "You will see us move with a lot of acquisitions over the next year."

For more on this story:
- check out this article at Los Angeles Times

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