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Cisco Buys Linksys - Moves Into The Home
from the picked-quite-a-day dept
In a bit of a surprise, Cisco today announced that they're buying Linksys for $500 million. Linksys is the leader in wireless routers for homes by a long shot, so this lets Cisco move down the chain to a more consumer level offering. Cisco has recently been trying to make their product configurations more "user friendly" and Linksys has the reputation for having one of the more user friendly configuration systems around, so that makes sense. Cisco has also decided that they're going to keep the Linksys brand name - which makes sense since it's so strong in the retail market right now. It seems that the old gameplan for any networking company remains in place: grow big enough and get enough attention until Cisco wants to buy you.
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What is Cisco thinking???????? What is Cisco thinking???????? What is Cisco thinking????????Do you really think that a high-end, 50% gross margin, John Chambers operation focussing on service providers and big enterprise customers can peacefully co-exist with a cheap, 25% gross margin, Taiwanese operation like Linksys. These types of deals are recipes for disaster. High-level visionaries and detail-oriented tight-wads don't mix and history shows this over and over. Even if they don't integrate the two businesses, this acquisition isn't even close to the kinds of deal Cisco has done in the past. God bless John Chambers if he can pull this one off sucessfully.
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