News is just breaking that Cisco has agreed to acquire WebEx for $3.2 billion in cash. In 2006, WebEx generated nearly $50 million in profit on $380 million in revenue. They have $300 million or so in cash on hand, so the net deal value is $2.9 billion.
WebEx is driving the next wave of business communications with rich media meetings that liberate users from time and geographical constraints. WebEx's superior Web communications services and carrier-class MediaTone™ network, accelerate and support the entire business cycle.
WebEx helps companies to set up Video Conferencing, Web Conferencing and net meetings with their clients and employees any where in the world. Michael Arrington says WebEx is popular among the businesses but it is expensive and bulky. And also one has to be technical savvy with latest operating systems and models to run WebEx applications. Because of the complexity in WebEx applications, there are plenty of competitors who are trying to make it cheaper and run easier.
Arrington points out a number of companies have launched new startups that go head to head with WebEx's applications, some of them are Teamslide, DimDim (open source), 1videoconference (open source), Vyew, Live Meeting and SlideShare . He said all these programs are competitive with WebEx and also work well at cross platform collaboration (operating systems).
It looks like Cisco is paying too much for WebEx. There are many companies that are innovative and making it simpler and cheaper, only time will tell whether Cisco purchase will be profitable or not. More news regarding their partnership will follow soon.