Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Cisco Still Totally Hearts Linksys and WebEx

When companies start making big changes, as networking giant Cisco Systems is doing right now, it gets surprisingly easy to look at the assembled parts and start making guesses about which bits should stay and which bits should go. That’s a little of what happened today when word started circulating around that the next parts of Cisco that might be sold, spun-off or otherwise, well, you know, dealt with a la Flip, might be Linksys, the home networking business that it bought in 2003, and/or WebEx, the virtual meeting concern it bought in 2007.

Given how CEO John Chambers and other senior execs have talked about how its consumer business just isn’t cutting it, the notion the Linksys bit might be on the block seemed logical. Selling consumer stuff is a cutthroat business after all, and Cisco’s focusing more and more, Chambers says, on its core business, which is selling the gear used in industrial-strength networks. You could make a similar argument–and I did today–about WebEx, especially now that Skype’s new owner Microsoft is likely to become a big competitor.

Well, a handful of people, some of them inside Cisco, wrote me to point out a few things wrong with all this speculation. Chambers still totally loves the home networking unit formerly known as Linksys. And it loves WebEx too. Who says? John Chambers, for one.

Take WebEx. That’s part of the collaboration business. And as Chambers said on the most recent earnings conference call, collaboration is on pace to be a $4 billion business, growing at a healthy rate of 25 percent or more during the last five quarters. That doesn’t mean WebEx is that big–it was only a $308 million business when Cisco bought it in 2006. But it is part of the business that Cisco considers important, and is also growing. From that perspective, probably not the first thing you’d expect Cisco to be shopping around right now. Would it have helped if he said “We love WebEx”? He did, just in a roundabout way.

And Linksys? When Cisco announced the shake-up of its consumer business in April–and while everyone was focusing on the death of the Flip unit–the company said it would “refocus” its home networking business, which includes the old Linksys unit. Selling home networking gear is a key piece of its strategy to push its video platform into the home. “These industry-leading products will continue to be available through retail channels.” Though it doesn’t mention the Linksys brand by name–which would have helped clarify things a little–Cisco said that its home networking business is not going anywhere anytime soon. What does “refocus” mean? Can’t help you there, though I suspect we’ll find out soon, along with all the other changes–including layoffs–that are coming to Cisco.


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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus