Cisco Believed To Be Seeking Linksys Buyer

Cisco Systems, Inc. (CSCO), the world’s largest computer networking equipment maker, has hired Barclays Plc to find a buyer for its Linksys division, according to a Bloomberg.com article.  Linksys makes routers and networking equipment for home wireless access, whereas Cisco’s primary business is enterprise and business-related networking equipment.

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Cisco would like to sell Linksys as part of a strategy to exit the consumer-level business and focus on corporate software and technology services.  Cisco paid $500 million for Linksys back in 2003, but was never able to make this foray into the consumer-level networking business profitable. Linksys is likely to bring far less than the $500 million Cisco paid for it because Linksys is a mature consumer business with low margins.  Linksys might be an attractive target for TV set makers who are interested in an already recognized brand and technology.

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Cisco Chief Executive Officer John Chambers eliminated just under 8,000 jobs this past year and closed down businesses such as the Flip video-camera unit.  Cisco continues to experience a slowdown in sales growth after failed ventures into consumer technologies.  Spokesmen for both Cisco and Barclays declined to comment.

 

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