Cisco Seeking to Sell Linksys Networking Unit: Report
Cisco reportedly has hired Barclay's to help sell its Linksys home networking business, one of the remaining units from Cisco's consumer efforts.Cisco Systems, the networking giant that shuttered much of its consumer business last year as part of a larger companywide restructuring, reportedly is now looking to sell its Linksys home networking business. Based on interviews with anonymous "people with knowledge of the situation," Bloomberg on Dec. 16 said that Cisco has retained the financial firm Barclay's to help it find a buyer for the Linksys unit, which Cisco bought in 2003 for $500 million as the first step in building up its consumer business. Bloomberg's sources said that Linksys, as a mature business with low margins, probably would not command that kind of money this time around, though they expect interest from TV set makers. After several quarters of disappointing financial numbers, Cisco executives in early 2011 started taking steps to restructure the company, which included paring its consumer business—such as closing down its profitable Flip video camera unit—and redoubling efforts in areas such as core business networking, cloud computing, mobility and video. Cisco also cut more than 7,800 jobs. Linksys was spared the ax last year, with executives saying the plan to bind it more tightly to the company's larger networking business. Still, there was speculation last year that both Linksys and WebEx, Cisco's online collaboration unit, were possible targets for being sold or closed.
Since then, Cisco has continued to make WebEx a key part of its larger collaboration efforts. However, apparently Linksys has not flourished enough after being more tightly integrated with the company's networking business.