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Cisco Keeps Buying Stuff

When Cisco chief executive John Chambers visited The Post earlier this year, he said a couple of things that stuck with me: First, he thought the economy would go into positive growth territory in the third or fourth quarter of this year. He may be proven right. Secondly, he viewed the recession as a growth opportunity for his company.

Cisco is a massive tech company that does stuff most people don't understand but can't live without. A way to think about them is as the company that makes the Internet's "plumbing," which is to say, switches and routers and all the equipment and software that has allowed me to send this to you right now wherever you are.

When Chambers (disclosure: a West Virginian, like myself) visited, his company was sitting on $50 billion in cash, a hoard he'd built up in fat times to use to buy stuff on the cheap when the eventual downturn came.

The first notable acquisition this year came with Cisco's $590 million purchase in March of Pure Digital Technologies, makers of the popular little Flip video cameras. Cisco had been waiting to jump into consumer tech and Flip gave them a good opportunity to do so on the cheap.

Today comes the $2.9 billion Cisco acquisition of Starent Networks, which makes wireless networking equipment. What this means: Starent works with mobile network providers -- such as Verizon, Cox and Vodafone -- to help them deliver mobile broadband services to their subscribers. In short: The company makes your smartphone work better.

This is another big consumer play for Cisco, which is expanding beyond its business-to-business beginnings and into a Best Buy near you.

The Wall Street Journal's Digits blog is listening to the Cisco-Starent conference call right now talking about the merger. Click here to check it out.

-- Frank Ahrens
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By Frank Ahrens  |  October 13, 2009; 12:17 PM ET
Categories:  The Ticker  | Tags: Cisco, John Chambers, Starent  
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