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.
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.
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.