The news is already everywhere that Cisco (CSCO) is buying web videoconferencing company Webex (WEBX) for $3.2 billion. Webex shares are up 22% to $56.50 on the news.
But, how good is the Webex technology? Webex is not really growing very fast for a successful company. Revenue in 2006 was $380 million compared to $308 million in 2005. Net income was down slightly to $48.6 million from $53 million in 2005.
TechCrunch makes the observation that Webex software is "expensive and bulky". The tech news site also points out that Webex has a number of competitors, many with better products.
Cisco is paying a big multiple for a company that may not have the best products in its field.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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