Cisco, which recently has acquired video conferencing manufacturer Tandberg, and Flip videocam manufacturer Pure Digital, continued its buying binge yesterday, picking up Starent Networks for $2.9 billion. The price is some 50 times Starent's expected 2009 earnings--about a 20 percent premium--for the mobile networking company.
Starent's technology allows mobile smartphone users to switch from cell tower to cell tower seamlessly, making it easier for operators to stream broadband and provide integrated voice and multimedia to customers. Starent is especially adept at quickly and precisely routing big streams of data--like video--across mobile networks.
Cisco's acquisition of Starent underscores the company's longer-term outlook that high-demand traffic--like video--will continue to grow, and that it wants to be positioned to take advantage of that growth.
"We have had a huge explosion in data traffic," Ned Hooper, Cisco's chief strategy officer, told the New York Times. "We expect the market for mobile data to double every year through 2013."
- see this New York Times article
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